THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to boost its oversight of payment systems under a draft circular which will establish a framework for the sector.
“The proposed framework provides the BSP’s approach to discharging its mandate as overseer of payment systems pursuant to Republic Act (RA) No. 11127 or the National Payment Systems Act (NPSA),” the central bank said in a statement late Monday.
The draft framework now open for industry comments provides that the BSP may issue policies to boost “innovative” payment solutions while mitigating risks associated with the use of these systems.
“These policies shall include principles and requirement on various areas, such as, but not limited to governance, risk management, consumer protection, data confidentiality, information security, AML/CFT (anti-money laundering/ counter-terrorism financing), and pricing mechanism,” the draft circular said.
The draft rules also seek to establish a Payment System Management Body (PSMB) to organize, manage, and governing the participants in the payment system “to ensure that transactions are “safely and efficiently cleared and settled with finality.” These PSMBs will be accredited by the central bank.
According to the draft circular, among the central bank’s main functions as overseer is to monitor existing and incoming payment systems.
With this, operators of payment systems will be required to register with the BSP and to submit key reports, in accordance with the reporting governance framework of the central bank.
“The Bangko Sentral may accredit several PSMBs or revoke the accreditation of a PSMB as it deems necessary,” it said.
For its part, the BSP can conduct on-site inspections to verify arrangements done by payment systems and their compliance with existing policies.
Likewise, the framework, if implemented, will allow BSP to impose internationally accepted standards and practices and to categorize payment systems into large value payment systems or retail payment systems, which will include those involved in purchases of goods and services, domestic remittances, or fund transfers.
“The Bangko Sentral shall designate a payment system which poses or has the potential to pose systemic risk, or if designation is deemed necessary to preserve public interest. Designation shall conform to the criteria and the process provided in this framework,” it said. — LWTN