BSP Issues Guidelines on Use of Electronic Money

03.06.2009

The Monetary Board has approved the issuance of 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 goods and services, to transfer or remit funds, and/or to withdraw funds. E-money instruments include cash
cards, e-wallets accessible via mobile phones or other access device, stored value cards, and other similar products.

As the entity that holds the 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-Banks - Banks (referred to in the Circular as EMI-Banks) 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 on 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-Xchange 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 in 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 thousand; and

 EMIs shall ensure compliance with applicable requirements of the Anti-Money Laundering laws, rules and
regulations.