Hold Your Gems! BSP Suspends LYKA Operations

Hold Your Gems! BSP Suspends LYKA Operations

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BSP put the transactions of LYKA to a halt because they are not yet registered with the central bank.

You have seen your favorite celebrities and influencers post in this platform and pay for transactions using the gems collected in this Hong Kong–based social media app. LYKA is an app that combines social media with e-commerce, community and content creation. LYKA claims that the app is shaping the future of work with a Social Wallet that pays people for their passion. Meaning, the LYKA app also serves as an OPS or Operator of Payment System. An OPS operates as payment gateways, platform providers, payment facilitators and merchant acquirers that enable sellers of goods and services to accept payments, in cash or digital form.

Photo from MEGA.

However, the Bangko Sentral ng Pilipinas (BSP) just announced this Friday that the Lyka needs ti stop its operations as an OPS because of its non-compliance or pending registration with the central bank. BSP Governor Benjamin Diokno said at a virtual press briefing, “The Monetary Board has ascertained that these activities make Lyka an OPS and is thus required to register with the BSP, which is needed before it is allowed to continue with its OPS activities.”

Under Circular No. 1049, OPS that are required to register but are found to be operating without registration shall be directed to comply with the registration requirements, and those that fail to comply may be ordered to stop operations until they’re registered with the BSP.

Lyka’s suspension is in accordance with the Republic Act No. 11127 or The National Payment Systems Act (NPSA), and BSP Circular No. 1048.

Why does an OPS need to be registered?

It is for our safety. According to the BSP Governor, Diokno, registration of an OPS allows the BSP to have an overview of the payment system it operates to ensure that it functions safely, efficiently, and reliably by itself, consistent with the central bank’s objectives of consumer protection and financial stability. Because of this, BSP also take this time to advise people to transact only with BSP-registered OPS that are listed in the BSP’s website.

Photo from MEGA.

This may sound like bad news to LYKA’s loyal users and supporters, but it’s not as bad as it sounds. The central bank chief said the BSP ordered Lyka to suspend its activities as an OPS and invited the company to apply for registration before it can be allowed to continue with its activities, which the company is willing to comply to.

Diokno said, “The operators of Lyka have already expressed their willingness to register with the BSP as an OPS.” The BSP, reminded the companies who are operating a payment system to comply with the requirement, which is under the NPSA and BSP Circular No. 1049 to register with the central bank.

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