Overview of Anti-Money Laundering and Combating the Financing of Terrorism
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Box 3.2 (continued)
In the Philippines, regulation for payment of goods and services in the e-sector is featured in e-money issuer circular 649 of 2009, published by Bangko Sentral ng Pilipinas (BSP; the central bank), governing the issuance of e-money and the operation of e-money issuers (EMIs) in the Philippines. According to this circular, different types of institutions are allowed to issue e-money after getting a BSP approval. According to section 3 of the circular, Prior BSP Approval: Banks planning to be an EMI-Bank shall apply in accordance with Section X621 of the Manual of Regulations for Banks (MORB) relating to the guidelines on electronic banking services and with Section X169 of the MORB on outsourcing of banking functions, when applicable. Non-Bank Financial Institutionb (NBFI) planning to be an EMI-NBFI shall likewise comply with the requirements of Section X621 of the MORB which shall be made applicable to them and with Section 4190Q/S/P/N of the MORNBFI [Manual of Regulations for Non-Bank Financial Institutions] when applicable. Non-bank institutions planning to be an EMI-Others shall register with the BSP as a money transfer agent in accordance with the provisions of Section 4511 of the MORNBFI. To qualify for registration, they have to comply with the requirements detailed in Section 5 of this circular. In case the non-bank institution is already registered with the BSP as a money transfer agent, it is required to meet the additional requirements mentioned under said section to qualify as EMI-Others. a. EU Directive 2007/64/EC describes the rationale behind introducing a new category of payment service providers as follows: “However, in order to remove legal barriers to market entry, it is necessary to establish a single license for all providers of payment services which are not connected to taking deposits. It is appropriate, therefore, to introduce a new category of payment service providers, ‘payment institutions,’ by providing for the authorization, subject to a set of strict and comprehensive conditions, of legal persons outside the existing categories to provide payment services throughout the community. Thus, the same conditions would apply community-wide to such services. . . . The conditions for granting and maintaining authorization as payment institutions should include prudential requirements proportionate to the operational and financial risks.” b. According to section 2 of circular 649, these are nonbank financial institutions that are supervised by the BSP.
These licenses are usually referred to as payment system licenses or e-money issuer licenses,2 and granted to institutions wishing to become payment service providers and to engage in financial activities. For payment systems licenses, existing laws and regulations that govern payment systems providers (often known as national payment systems laws) will then be applicable. This appears to be the case, for example, in the European Union (EU), Malaysia, and Zambia.