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BSP orders social media app Lyka to stop payment system operations

BSP orders social media app Lyka to stop payment system operations

MANILA, Philippines — The Bangko Sentral ng Pilipinas has ordered social media app Lyka to stop its operation as a payment system operator, saying the company is not registered to perform such a function.

In a statement on Friday, the BSP said they invited officials of Lyka to register as an operator of payment system (OPS), which the company “already expressed their willingness” to do.

Lyka is a social media platform launched in the Philippines by a Hong Kong-based company. The app allows its users to purchase, exchange and use Gift cards in Electronic Mode, or GEMs, as reward to content creators in the platform. In turn, users can collect Lyka GEMs and use them to purchase items from its partner stores.

“The Monetary Board has ascertained that these activities make Lyka an OPS and is thus required to register with the BSP, which is needed before it is allowed to continue with its OPS activities,” the central bank said.

The central bank earlier reminded the public to transact only with BSP-registered OPS, which may be cash-in service providers, bills payment service providers, and entities such as payment gateways, platform providers, payment facilitators and merchant acquirers that enable sellers of goods and services to accept payments in cash or digital form.

Under the BSP’s Circular 1049, OPS that are required to register, but are found to be operating without registration, shall be directed to comply with registration requirements. Those that fail to comply may be ordered to stop operations until immediate action is taken to register with the BSP.