The Monetary Board has approved the streamlined licensing requirements for BSP-Supervised Financial Institutions (BSFIs) that intend to offer Electronic Payment and Financial Services (EPFS).
This is in line with the reform agenda of the Bangko Sentral ng Pilipinas (BSP) that promotes digital innovations and increasing availability of safer and more efficient channels.
These channels will efficiently deliver banking, payment, remittance, investment, and other financial services.
According to a recent press release, under the enhanced EFPS licensing policy, the BSFIs shall simply notify the central bank within 30 days prior to the launch of their services.
These services include those that enable clients to access information on their deposit, loan, and other accounts such as outstanding balance, or receive funds in electronic means.
However, those that offer advanced services would require prior approval from the central bank.
Advanced services are those that allow clients to transfer funds from one account to another and initiate other financial transactions.
The prescribed approval process typically requires only the following three steps:
- The BSFIs shall self-assess compliance with the prudential criteria set out in the licensing framework of the Bangko Sentral ng Pilipinas.
- If determined to be compliant, the BSFIs shall submit a certification of compliance and request a confirmation of eligibility to offer EPFS from the Bangko Sentral ng Pilipinas.
- They shall submit certain documentary requirements to eventually obtain an EPFS license.
To guarantee a smooth transition towards the implementation of the amended Electronic Payment and Financial Services licensing policy, the BSFIs with existing EPFS licenses shall re-register the following services with the BSP by 31 March 2019:
- All their previously-licensed and operational EPFS have until 31 March 2019
- Those that have been licensed but have yet to be launched until 30 September 2019.
Moreover, the institutions still need to submit periodic prudential reports, which are aimed at strengthening the central bank’s surveillance and supervisory mechanisms.
It will also guarantee the availability of information for policy development and other regulatory purposes.
In addition, the newly-approved policy requires BSFIs to make their EPFS with funds transfer functionality interoperable by participating in automated clearing houses such as InstaPay and PESONet.
The central bank also directs BSFIs to adopt marketing strategies that effectively promote EPFS in order to optimise the benefits of interoperability.
With its streamlined licensing policy on EPFS, coupled with more vigorous drive for interoperability among the BSFIs, the Bangko Sentral ng Pilipinas looks forward to a highly efficient funds flow in the economy, supporting productive activities that fuel economic growth.