Philippine Central Bank Draft Memo Requires Direct Merchant Arrangements for All Casino Payments
The BSP issued a draft memo requiring direct merchant arrangements for casinos, banning layered payments, and mandating enhanced due diligence after detecting micro-payments via over 8,000 disguised merchants. PAGCOR is collaborating with BSP but lacks control over payment channels. Channelization has fallen to 50% from 75% after last year’s e-wallet de-linking.
SCCG Take — This forces operators toward transparent direct payment models while exposing gaps in regulatory coordination between BSP and PAGCOR on channelization.
The Philippine Central Bank, officially known as Bangko Sentral ng Pilipinas (BSP), is cracking down on payment service providers by making it harder to hide who is actually receiving money. A draft memo proposes amendments to the Manual of Regulations of Payment Systems that would require greater visibility over merchants, beneficiaries and their underlying owners, as well as payments channels, transactions and settlement accounts. Any payment arrangements that obscure those relationships would be prohibited.
Direct Merchant Rules and Enhanced Due Diligence for Casinos
The memo specifically identifies casino and wagering operators – both land-based and online – as companies that should in future only be accepted under a direct merchant arrangement. Layered merchant agreements with an intermediary between the payment acquirer and the actual merchant would be barred. Casinos would also be subject to enhanced due diligence and enhanced monitoring.
The changes follow BSP detection of merchants accepting thousands of tiny payments late into the night, which were found to be bets on online casinos. More than 8,000 merchants were using what appeared to be small, legitimate retailers to receive these payments. Those merchant accounts have since been closed.
Stakeholder Responses and Recent Channelization Data
BSP Deputy Governor Mamerto Tangonan stated that payment providers must ensure greater due diligence of companies utilizing their platforms. “We want to protect consumers from online fraud, illegal activities and also from money launderers,” stated Deputy Governor Mamerto Tangonan, according to Bloomberg. “You cannot expand digitalization if people’s money is being stolen.”
PAGCOR Chairman and CEO Alejandro Tengco confirmed the regulator is working with the BSP on the issue, although he added, “Unfortunately, we don’t have control over that.” Leading payment provider Maya expressed support for any measures that “strengthen the integrity, safety and trustworthiness of the digital payments ecosystem.”
The BSP last year ordered the removal of direct links to licensed online gaming operators by e-wallet providers. PAGCOR noted that channelization – the percentage of online play on licensed sites in the Philippines versus black market sites – was currently around 50%. It has been reported that as much as 75% of play had been directed to regulated sites prior to the de-linking.
Reporting: Inside Asian Gaming
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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