Daily Payment Restrictions Suggested for Online Gaming Transactions by Philippine Central Bank
The Bangko Sentral ng Pilipinas (BSP), the Philippines' central bank, has unveiled a draft circular that aims to establish stricter regulations for payment service providers (PSPs) and operators of payment systems (OPSs) engaged in online gambling payment services. The proposed regulations are intended to promote responsible digital financial practices, mitigate risks related to money laundering, fraud, and harmful gambling behaviors, and protect the financial health of consumers.
Under the draft circular, PSPs and OPSs must obtain prior authorization from the BSP before offering online gambling payment services. This regulatory oversight ensures that these entities meet minimum requirements, including a capitalization of at least ₱300 million and the implementation of robust anti-money laundering (AML) and counter-terrorism financing (CTF) risk management systems.
Users engaging in online gambling payments will be required to open a separate Online Gambling Transaction Account (OGTA), which has stricter know-your-customer (KYC) measures, including facial recognition. Each user is limited to one OGTA, and the daily transfers to this account cannot exceed 20% of the user’s average daily account balance.
PSPs are prohibited from providing hyperlinks or any functionality that redirects users directly to online gambling operator platforms. This aims to prevent seamless access and incentivization of gambling through payment platforms.
The draft circular also introduces usage limits and cooling-off periods. Payments to gambling accounts can only be made during a 6-hour window per day. Heavy users who reach a specified threshold must observe a mandatory 24-hour cooling-off period before making further payments. During this period, users will receive reminders promoting responsible gambling.
Once an OGTA is opened, loans or credit functionalities within the same digital payment app must be disabled to prevent gambling on borrowed funds. PSPs are encouraged to implement personal limits for users and send frequent pop-up warnings or reminders regarding gambling activities. Online gambling advertisements are disallowed unless the user explicitly opts in.
Violations of these provisions could result in steep penalties, including fines up to P100,000 per day for ongoing violations and a maximum of P1 million per transaction violation. Non-monetary penalties include suspension or revocation of BSP authority to offer online gambling payment services or participate in the Philippine Payment and Settlements System.
The BSP's regulatory action is in response to growing concerns from Church leaders and lawmakers about the rising accessibility and promotion of e-gambling. The draft circular is a proposal and is subject to further review and approval by the Bangko Sentral Pilipinas. Once approved, PSPs and OPSs will have six months from the circular's effective date to comply and obtain the necessary permits.
Earlier this month, a proposition was submitted to the Philippine Senate that could see the banning of e-wallets for betting, along with other strict regulations on online gambling. The BSP's draft circular is a significant step towards implementing these stricter regulations, aiming to protect the financial health and well-being of Filipino consumers.
- The central bank in the Philippines, Bangko Sentral ng Pilipinas (BSP), has proposed stricter regulations for payment service providers (PSPs) and operators of payment systems (OPSs) engaged in online gambling payment services, aiming to promote responsible digital financial practices and protect the financial health of consumers.
- Under the draft circular, PSPs and OPSs must obtain prior authorization from the BSP, have a capitalization of at least ₱300 million, and implement robust anti-money laundering (AML) and counter-terrorism financing (CTF) risk management systems.
- Users engaging in online gambling payments will be required to open a separate Online Gambling Transaction Account (OGTA), which has stricter know-your-customer (KYC) measures and limits daily transfers.
- Violations of the provisions in the BSP's draft circular could result in significant penalties, including fines, suspension, or revocation of BSP authority, reflecting growing concerns from Church leaders, lawmakers, and the general news about rising accessibility and promotion of e-gambling.
