The Bangko Sentral ng Pilipinas (BSP) has amended the Guidelines on Electronic Money (E-money) and the Operations of Electronic Money Issuers (EMI) in the Philippines amid increasing IT-related risks and to better protect the interests of e-money account holders.
“The amendments are geared towards equipping EMIs in attending to the evolving needs and behaviors of consumers and in responding to the existing and emerging risks in the financial sector, such as cybersecurity and money laundering,” said BSP governor Felipe M. Medalla.
The revised guidelines set out higher liquidity and capital requirements for EMIs with significant outstanding e-money balance and large-scale operations, respectively.
EMIs with monthly outstanding e-money balance of at least P100 million are required to maintain liquid assets in trust accounts equivalent to at least 50 percent (50%) of their outstanding e-money balance and to cover the remaining balance with placements in bank deposits, government securities, or other liquid assets acceptable to the BSP.
EMIs with outstanding e-money balance below P100 million may continue to comply with the liquidity requirements by holding eligible liquid assets.
Meanwhile, the new rules set out higher minimum capital requirements for EMIs with large-scale operations recognizing the higher risk exposures of said entities.
The issuance defines large-scale EMIs as those with 12-month average value of aggregated inflow and outflow transactions equal to or greater than P25 billion.
Under the guidelines, large-scale EMIs are required to maintain minimum capital of P200 million while the minimum capital requirement for small-scale EMIs is P100 million.
Consistent with the application of the risk-based principle, the BSP lifted the P100,000 monthly aggregate load limit and now allows EMIs to set pre-defined limit and threshold per client category based on the results of their institutional risk assessment and customer due diligence process.
The amendments also simplified the classification of EMIs into two categories: (a) EMI-Banks; and (b) EMI Non-Bank Financial Institutions (EMI-NBFI), wherein the latter may include cooperatives. EMIs previously classified as EMI-Others will be grouped under EMI-NBFI.
The guidelines likewise expanded the definition of e-money to include those that may be transferred to other accounts as compared with earlier regulations limiting it to only those withdrawable in cash or cash equivalent.
In addition, the new rules broadened the acceptability of e-money to include merchants and issuers using the same mobile application.
EMIs shall be given one year from the effectivity of the revised regulations to comply.