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Philippines: BSP finalizing safer, efficient payment system framework
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is finalizing a framework for a safe and efficient payment system, ensuring settlement of time-critical financial transactions.
In a draft circular, the regulator said the payment system is indispensable to the smooth functioning of financial markets as well as to maintaining monetary and price stability.
The BSP said soliciting comments from the stakeholders is a key step in the BSP’s policy-making process, ensuring the development of comprehensive and responsive regulations.
The proposed framework provides the BSP’s approach to discharging its mandate as overseer of payment systems pursuant to Republic Act 11127 or the National Payment Systems Act (NPSA).
“The BSP’s oversight function covers the payment system that it owns and operates. Relative to this, it shall adopt internal safeguards to ensure independence between its overseer and operator function,” it said.
The regulator said the framework would cover the BSP’s oversight function on payment service providers, operators of payment systems and other relevant payment system participants.
It would also cover the scope and dynamics of payment system oversight, including the extent of cooperative oversight as well as the designation criteria and expectations on participants of designated payment systems.
“Safety builds and preserves confidence in the financial system. This objective requires reliability and integrity of the system as well as effective management of payment-related risks, including cyber security breaches, operational and settlement failures, and fraudulent transactions,” the central bank said.
The NPSA empowered the BSP to designate a payment system that poses or has the potential to pose a systemic risk as well as payment system for the purpose of preserving public interest.
To ensure adherence to international standards, the draft framework is aligned with the concepts and principles set by the committee on payment and settlement systems (CPSS) of the Bank for International Settlements (BIS).
“The issuance of a payment system oversight framework forms part of the phased-in implementation of the NPSA. The initial implementing regulation that has been issued by the BSP requires the operators of payment systems to register with the BSP to ensure that these operators are captured under the BSP’s sphere of authority,” the central bank said in a statement.
Source: https://www.philstar.com/business/2020/03/18/2001648/bsp-finalizing-safer-efficient-payment-system-framework