Operators of Payment System Registration Rules Under BSP Circular No. 1191

Registration as an operator of a payment system (OPS) with the Bangko Sentral ng Pilipinas is a regulatory requirement for entities that operate the infrastructure through which payments are cleared and settled. Under the Payment System Oversight Framework, the Bangko Sentral requires registration of all OPS in accordance with the guidelines provided under Section 502 of the Manual of Regulations for Payment Systems (MORPS). The MORPS was created by BSP Circular No. 1191, Series of 2024, which consolidated the rules on the registration of operators of payment systems — originally issued under Circular No. 1049 — into Section 502 of the Manual. Registration is the first step; an OPS that intends to operate within a designated payment system must then secure prior approval from the Bangko Sentral.

Who must register as an operator of a payment system

The Bangko Sentral's oversight function covers the national payment system, including the activities of operators of payment systems. Under the Payment System Oversight Framework, all OPS shall comply with the relevant regulations and guidelines set out by the Bangko Sentral, including governance, risk management, and reporting requirements. An OPS must also remain financially and technically capable so that the payment system it operates stays robust and responsive to its participants.

The governance policy for OPS covers all registered operators, including the Bangko Sentral itself as operator of the real time gross settlement (RTGS) system. Other OPS include:

• Bangko Sentral-supervised financial institutions (BSFIs) — banks and non-bank financial institutions such as non-bank electronic money issuers (EMI-NBFIs); and
• Non-BSFIs — cooperatives regulated by the Cooperative Development Authority, branches and subsidiaries of foreign incorporated entities, and other domestic corporations and non-corporate entities whose businesses are considered that of an OPS under existing Bangko Sentral regulations.

The registration framework under the MORPS

Circular No. 1191 created the MORPS and organized its provisions into parts. Registration sits in Part Five (Licensing and Registration), specifically Section 502, Rules and Regulations on the Registration of Operators of Payment Systems. The same Part contains Section 501 on Electronic Payment and Financial Services.

The creation of the MORPS consolidated several prior issuances. The rules on registration of OPS, previously issued under Circular No. 1049 dated 09 September 2019, were renumbered and incorporated as Section 502. Other related issuances were likewise folded into the Manual, including the Payment System Oversight Framework (Section 101), the adoption of the Principles for Financial Market Infrastructures (Section 102), the Governance Policy for Operators of Payment System (Section 401), and the Regulatory Reporting Standards for OPS (Section 103).

Registration, then approval for designated payment systems

Registration is distinct from authority to operate a designated payment system. A registered OPS that intends to operate within a designated payment system shall secure prior approval from the Bangko Sentral. The licensing framework under the MORPS includes, at a minimum, requirements for payment service providers (PSPs), operators of a designated payment system (ODPS), and payment services, arrangements, instruments, and activities.

For an ODPS, the Bangko Sentral sets organizational and operational requirements through the Monetary Board. At a minimum, an ODPS shall:

• Secure a certificate of authority issued by the Monetary Board prior to registering its Articles of Incorporation and By-Laws, or any amendments, or obtaining a license to do business in the Philippines for submission to the Securities and Exchange Commission, as applicable;
• Be a stock corporation, and licensed to do business in the Philippines in the case of foreign entities;
• Be a registered OPS pursuant to Section 502 of the MORPS and secure prior authority to be an ODPS; and
• Obtain prior approval of the Monetary Board for any change in ownership or control, directly or indirectly, of more than ten percent (10%) of the voting stock of the ODPS.

Governance and compliance expectations after registration

Registration brings continuing obligations. An OPS that is a BSFI, a cooperative, a local subsidiary or branch of a foreign incorporated entity, or a domestic corporation must adopt an effective and documented governance structure providing clear lines of responsibility and accountability of the board of directors and senior management.

The documented governance structure should include the roles and responsibilities of the board and board-level committees, the structure of senior management, reporting lines between the board and senior management, and the design of risk management, compliance, internal control, and audit functions.

Where an OPS holds concurrent licenses — such as a banking license or a license to be an EMI-NBFI — it must adhere to the more stringent requirements between the governance policy and the applicable provisions of the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI). An OPS whose head office or parent company is under a foreign regulator shall follow the more stringent requirements between the BSP policy and those of its home regulator, and must make proof of compliance available upon request of the oversight department.

Reporting and sanctions

The Bangko Sentral requires participants of payment systems to submit periodic and ad hoc reports on payment and other financial transactions, key risk indicators, incidents, and other statistics. The Regulatory Reporting Standards for OPS are set out in Section 103 of the MORPS.

Violations carry consequences. Under Part 15 (Sanctions and Enforcement Framework) of the MORPS, any violation of the provisions of the Manual subjects OPS and payment system participants, and their directors, officers, or employees, to the monetary and non-monetary sanctions under Sections 36 and 37 of R.A. No. 7653, as amended, and Sections 19 and 20 of R.A. No. 11127, as appropriate. Enforcement actions may include suspension of offering new electronic financial products and services, suspension or revocation of authority to provide such products and services, and suspension or revocation of authority to settle through the Philippine Payments and Settlements System.

Frequently asked questions

Is registration with the BSP required for all operators of payment systems? Yes. The Bangko Sentral requires registration of all OPS in accordance with the guidelines under Section 502 of the MORPS.

What is the difference between registering as an OPS and being an ODPS? A registered OPS that intends to operate within a designated payment system must secure prior approval from the Bangko Sentral. An ODPS must be a registered OPS under Section 502 and must separately secure prior authority to be an ODPS.

What happens if an OPS violates the MORPS? Violations may subject the OPS, payment system participants, and their directors, officers, or employees to monetary and non-monetary sanctions under R.A. No. 7653, as amended, and R.A. No. 11127, as appropriate.

Practical takeaways

• Registration of all OPS is required under Section 502 of the MORPS, created by BSP Circular No. 1191, Series of 2024.
• Registration is separate from authority to operate a designated payment system; a registered OPS needs prior BSP approval for that.
• An ODPS must be a stock corporation, be a registered OPS, and secure a certificate of authority from the Monetary Board before registering with the SEC.
• Concurrently licensed OPS must comply with the more stringent of the MORPS governance policy and the MORB or MORNBFI.
• Non-compliance can trigger suspension or revocation of authority and monetary penalties under the applicable laws.

Primary sources

The rules discussed above are drawn from the following issuances, embedded here in full for your reference.

Governance Policy for Operators of Payment SystemOpen in Law LibraryDownload PDF

Creation of Manual of Regulations for Payment Systems (MORPS) (Re-uploaded with Appendix)Open in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.