Name
Global FinTech Guide
Country _ Name
Philippines
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

Payment systems are defined by the National Payment Systems Act (NPSA) as 'the set of payment instruments, processes, procedures and participants that ensures the circulation of money or movement of funds'.
Prior to the enactment of the NPSA, payment services were not specifically regulated; in issuing the statute and related implementing rules and guidelines, policymakers are seen as trying to catch up with and protect consumers that were engaging more and more in online transactions or making digital payments. Acceptance and the use of digital payment channels and services is fairly high, Authorities do not appear to harbour significant reservations on the roll-out of such services here, provided of course, that licensing and related requirements are complied with.



Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

Under Philippine laws, an operator of payment systems (OPS) would include providers that operate, maintain or process solutions that integrate payment or fund transfers that can be used by consumers transacting on online stores. Entities operating standalone applications that customers of third parties can use to pay their bills online, pay for goods and services at designated payment centres, or that facilitate peer-to-peer fund transfers would be considered OPS.

An OPS engaged in or intending to engage in merchant payment acceptance activities (MPAA) shall register with the Bangko Sentral ng Pilipinas (BSP) (the Philippine Central Bank). MPAA refers to the set of services provided to a merchant to receive payment for the sale of goods and/or services. In general, services include merchant acquisition; providing the means to accept various payment instruments and collect, secure, transmit and process payment information; and, providing support services related to the payment. Merchant acquisition is defined as the service of accepting and processing payment transactions on behalf of a merchant under an agreement, resulting in a transfer of funds to the merchant.

Entities that intend to operate payment systems need to register with the BSP within one month from their start of operations and obtain a Certificate of Registration (COR
) as an OPS, except in certain instances where registration is required prior to commencement of operation. The registration process is initiated through the submission of an application form, business plan, and a copy of the entity's business permit indicating its line of business. Once the COR is issued, the OPS shall pay a registration fee of PhP20,000 (approx. US$384).

Entities engaged in merchant acquisition must file an application with the BSP. There is a filing fee of PhP10,000 (approx. US$175) for applicants under Category A (those with average monthly value of collected funds transferred to merchants of less than PhP100 million (approx. US$1.75 million), and PhP20,000 (approx. US$350) for applicants under Category B (those with average monthly value of collected funds transferred to merchants of PhP100 million (approx. US$1.75 million) or more). Upon approval of application, there is a license fee of PhP25,000 (approx. US$437) for licensees under Category A, and PhP60,000 (approx. US$1,050) for licensees under Category B. An OPS granted with merchant acquisition licenses is not required to separately register as OPS and is considered compliant with the rules and regulations on the registration of OPS under the Manual of Regulations for Operators of Payment Systems (MORPS).

The OPS and/or merchant acquirer should comply with corporate governance obligations set by the BSP (such as the appointment of independent directors to the board) and other requirements under the MORPS and issuances of the BSP, including Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act (FPSCPA) and its implementing rules and regulations issued by the BSP (BSP FPSCPA IRR). Under the FPSCPA and BSP FPSCPA IRR, financial service providers, including OPS, are required to establish a Consumer Protection Risk Management System (CPRMS) to ensure that financial consumer protection risks are identified, mitigated, and addressed. The board of directors and senior management of the OPS will also be responsible for overseeing the implementation of the risk mitigation. Finally, the OPS will have to comply with the Consumer Protection Standards of Conduct on disclosure and transparency, protection of client information, fair treatment, recourse mechanism, and protection of consumer assets against fraud and misuse. The OPS is required to perform a gap analysis of its CPRMS and compliance with other obligations under the FPSCPA and BSP FPSCPA and submit the gap analysis along with action plans on compliance approved by its directors to the BSP.  Violation of the provisions of the FPSCPA may be criminally punished by imprisonment of up one to five years and/or fines of up to PhP2,000,000 (approx. US$34,940).
An OPS and/or merchant acquirer would also need to register with the Anti-Money Laundering Council.



Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area
The NPSA grants the BSP oversight authority over all payment systems in the Philippines. As such, if the BSP finds an entity to be operating payment services without a license, the BSP will first require the entity to register, and if the entity remains unregistered, the BSP may deploy enforcement and corrective actions and impose sanctions on the entity and its directors, officers and/or employees.

Providers of payment services which seek to implement new business models, service unserved targeted niches, and/or introduce new technologies may apply under the regulatory sandbox framework under BSP Circular No. 1153. The sandbox provides a controlled environment where BSP-supervised financial institutions may test innovative products or services with relaxed regulatory requirements, subject to oversight and risk-mitigation measures.

In this connection, Circular Letter No. CL-2025-021, issued pursuant to Monetary Board Resolution No. 1260, disqualified several entities and any sole proprietorships owned or controlled by their respective owners from future registration with the BSP. The disqualification was based on their operation as money service businesses without prior BSP registration. This underscores the BSP’s strict stance on unauthorized financial service activities and the long-term regulatory consequences of non-compliance.



Economic conditions

Market size for payment services and biggest payment service providers

In 2020, total transaction values for digital commerce were at US$8.671 billion, and US$2.185 billion for mobile Point-of-Sale payments (World Bank, Philippines Digital Economy Report 2020). In 2024, transaction values in the digital payments market were projected to reach US$43.65 billion (Statista, Market Insights). Based on publicly available information from the BSP as of 18 July 2025, there are 305 registered OPS. This number includes both banks and non-bank entities. According to market reviews, the top payment gateway providers in the Philippines in 2024 were PayPal, PesoPay, and DragonPay.



Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area

In November 2021, the BSP issued BSP Memorandum No. M-2021-064 which mandates a two-year moratorium on the issuance of licenses to operate as e-money issuer (EMI) for non-banking financial institutions, which was extended to December 15, 2024.

The Monetary Board, in its Resolution No. 1400 dated 5 December 2024, approved the lifting of the moratorium on the regular application for new EMI - Non-Bank Financial Institutions effective 16 December 2024.
On May 22, 2025, the BSP issued Circular No. 1206, which amended the Manual of Regulations for Non-Bank Financial Institutions – Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) to formally lift the moratorium on new EMI applications. While the moratorium has been lifted, the BSP imposed more stringent requirements for new applicants to safeguard the stability of the e-money ecosystem.
Under the new framework, applicants must have a minimum capital of PhP200 million (approx. US$3,488,818.0938) and demonstrate a sustainable business model with clear sources of funding. They must also submit a comprehensive three-year business plan, detailed risk management and cybersecurity frameworks, and an exit or wind-down strategy. In addition, the BSP requires that the directors and key officers meet enhanced fit and proper standards and possess relevant experience in finance, technology, or risk management. Applicants must also provide evidence of robust consumer protection mechanisms and complaint handling procedures. These requirements reflect the BSP’s intent to admit only institutions with the financial capacity, operational readiness, and governance strength to operate responsibly as EMIs.

Notwithstanding the availability of a licensing framework for EMIs, BSP Circular No. 1153 remains relevant, as it may still be utilized as a regulatory entry point for other types of innovative financial solutions. The sandbox regime is not limited to EMI-related activities and may be applied to test emerging business models in payments, lending, banking technology, or digital assets that fall outside traditional regulatory categories.

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