Philippines to Freeze New Payment Operator Licenses

Highlights

The Bangko Sentral ng Pilipinas (BSP) has drafted a circular to suspend new payment system operator (OPS) registrations for 12 months.
The pause is meant to let the central bank conduct a full review of its OPS licensing framework and risk classifications.
Applications filed before the freeze will still be evaluated, but none can be approved or denied until the suspension lifts.
Supervised institutions get 90 days to build an interim national QR-code merchant database and 12 months to make it fully operational.
High-risk merchants, including casinos, virtual asset service providers, and money-transfer businesses, will face stricter direct-relationship requirements.

The Bangko Sentral ng Pilipinas (BSP) has circulated a draft rule that would suspend the registration, licensing, and authorization of new payment system operators (OPS) for a full year, part of a broader push to tighten oversight of the country's merchant payment ecosystem. Under the draft, the central bank would stop accepting and processing new OPS applications for 12 months from the circular's effectivity, giving regulators time to conduct what the BSP describes as a holistic review of the OPS taxonomy and licensing framework. Applications already filed before the freeze takes effect will continue to be evaluated but cannot be formally approved or denied while the suspension is in place.

A Database to Match the Freeze

The freeze is paired with a much larger infrastructure project: a centralized national database tied to the Philippines' QR Code Standard, designed to make every merchant accepting QR payments traceable by identity, business registration, licensing status, payment service provider, settlement account, and risk classification. Supervised institutions would have 90 days from the circular's effectivity to stand up an interim version of that repository, with a fully operational system required within 12 months and a complete migration and validation of existing merchant records due within 15 months. The draft also singles out a category of higher-risk merchants, including casinos and other gambling operators, virtual asset service providers, and money-service businesses such as remittance companies and money changers, that would need direct, verified relationships with supervised institutions rather than operating through intermediary arrangements. On the incident-response side, the BSP's draft would require supervised institutions to detect and report fraud, scams, sanctions breaches, cybersecurity incidents, and unlicensed activity within 24 hours, a materially tighter window than typical reporting timelines in the region and a signal of how seriously regulators are treating merchant-side fraud risk.

Part of a Wider Southeast Asian Crackdown

The move places the Philippines alongside a broader wave of Southeast Asian regulators tightening the rules around digital payments and virtual assets even as adoption keeps climbing, a pattern also visible in Singapore's own proposal to ban stablecoin yield and require 100% reserves, and in Vietnam's new crypto trading penalties, which took effect this year with no exchange yet licensed. A licensing freeze paired with a centralized traceability database signals that Philippine regulators see fragmented oversight of merchant payment operators, rather than the operators themselves, as the core vulnerability enabling fraud and illicit finance to move through the system undetected.

For payment operators and fintechs with pending or planned Philippine market entries, the practical effect is a year-long pause on new licenses precisely as regional competitors elsewhere in Southeast Asia continue issuing new authorizations, potentially pushing some growth plans toward markets with clearer near-term paths to market. Virtual asset service providers named explicitly in the draft's high-risk category will likely face additional compliance costs and closer scrutiny of their banking relationships even though the freeze technically targets new OPS registrations rather than existing VASP licenses. The Philippines has built a large domestic base of crypto and remittance users over the past several years, making merchant payment infrastructure an unusually important channel for both legitimate commerce and, per the BSP's own stated rationale, fraud.

What Comes Next

The draft circular is not yet final, and the BSP has not published a specific date for when the suspension would take effect or how long the public comment period will run before it does. Firms with OPS applications already in the pipeline should watch for the circular's formal publication, since that date determines whether their filings beat the freeze or fall into the frozen queue. The more consequential deadlines, however, sit further out: the 90-day window to stand up an interim merchant database and the 12-month mark for the licensing review itself, a process that echoes Japan's own four-year freeze on new crypto licenses, which only recently ended when a Nomura-backed firm secured approval, both of which will determine whether new payment operators can re-enter the Philippine market on the original timeline or face further delay.

FAQ

What is the BSP proposing?
A 12-month suspension on new registrations, licenses, and authorizations for operators of payment systems (OPS) in the Philippines, to allow a full review of the licensing framework.

Will pending applications still be processed?
Applications filed before the suspension takes effect will continue to be evaluated, but the BSP cannot approve or deny them until the freeze is lifted.

What is the national QR-code merchant database?
A centralized repository tracking merchant identity, licensing, payment provider, settlement accounts, and risk status, with an interim version due within 90 days and full operation within 12 months.

Does this freeze affect virtual asset service providers directly?
Not their existing licenses, but VASPs are named as a high-risk category requiring direct, verified relationships with supervised institutions rather than intermediary arrangements.