Guidelines on the Use of Electronic Money — The Monetary Board or Bangko Sentral ng Pilipinas (BSP) has issued a circular that provides the regulatory framework over the fast-growing electronic money business in the Philippines to provide protection for consumers and to promote innovations in fund transfer mechanisms that benefit Filipino consumers.
E-money is a monetary value electronically stored in convenient payment instruments that consumers can use to buy or pay for good and services, to transfer or remit funds, and/or to withdraw funds. E-money instruments include cash card, e-wallets accessible via mobile phones or other access device, stored value cards, and other similar products.
As the entity that holds that value in exchange for electronic credits received, the following three (3) categories of institutions that may operate as e-money issuers shall be regulated by the Bangko Sentral:
EMI-Bank – Banks (referred to in the Circular as EMI-Bank) wishing to be an EMI shall apply with the BSP in accordance with Section X621 of the Manual of Regulations for Banks (MORB) relating to the guidelines on e-banking services;
EMI-NBFIs or non-bank financial institutions – NBFIs (referred to in the Circular as EMI-NBFIs) wishing to be an EMI shall likewise comply with the requirements of Sections X621 of the MORB which shall be made applicable to them and with Section 4190Q/S/P/N of the MORNBFI, when applicable. NBFIs are currently not covered by the regulations of e-banking, and EMI-Others or non-bank institutions registered with BSP as money transfer agent under Section 4511N of the MORNBFI (referred to in the Circular as EMI-Others). This includes Globe/G-Exchange for its G-Cash.
Non-bank institutions not yet registered with the BSP but intending to be an EMI shall likewise register as money transfer agent under the above regulations. To qualify for registration, they have to comply with the requirements detailed in Section 5 of the circular. In case the non-bank institution is already registered with the BSP as a money transfer agent, it still has to comply with the additional requirements mentioned in the said section to qualify as EMI-Others. The Circular provides that EMI-Others must be a stock corporation with a minimum paid-up capital of P100 million and are engaged only in the business of e-money.
The Circular prescribes the minimum requirements for each EMI category to ensure that the risks inherent in e-money business are mitigated and that EMIs adhere to prescribed levels of safety, security and soundness. Provisions under the circular include the following:
EMIs shall put place a system to maintain accurate and complete record of e-money transactions and other pertinent information;
E-money shall only be redeemed at face value. It is not considered a deposit; hence, it is not insured with the Philippine Deposit Insurance Corporation;
E-money instruments shall be subject to aggregate monthly load limit of P100 thousands; and EMIs shall ensure compliance with applicable requirements of the Anti-Money Laundering law, rules and regulations.