The Bangko Sentral ng Pilipinas (BSP) orders the social media platform LYKA to cease operations as an Operator of Payment System (OPS) due to a pending registration with the central bank on July 23.
Lyka is an application that was launched in the Philippines in 2020 and is owned by a Hong Kong-based company. This application allows users to earn LYKA GEMs or gift cards in electronic form by posting, sharing, and liking content, and these GEMs will be used in purchasing items.
“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,” the BSP stated.
According to the BSP, the application should register based on its features, as specified in Republic Act No. 11127, or the National Payment Systems Act.
Registering an OPS allows the BSP to have monitoring of the payment system it operates to ensure that it operates “safely, efficiently, and reliably on its own”, which is consistent with the Central Bank’s objectives of consumer protection and financial stability, according to Benjamin Diokno.
Companies that fail to comply may be ordered to halt operations until they take immediate action to register with the BSP.
LYKA’s operators “have already expressed willingness” to register with the BSP as an OPS, they added.
LYKA released a statement on Friday, July 23 about the issue regarding the pending registration with BSP.
“We are confident that the operations in the Philippines will continue to stay strong with the submission and continuous coordination of Digital Spring with BSP and other regulatory bodies,” LYKA App wrote in a statement.
LYKA US and Hong Kong said Digital Spring Marketing and Advertising, the operator and marketing arm of Lyka in the Philippines, is “continuously communicating with BSP regarding its OPS application.”
It is said that BSP issued an OPS provisional certificate of registration to Digital Spring.
“Moreover, Digital Spring operates LYKA in the Philippines in conjunction with EPLAYMENT CORPORATION (ePlayment), which is registered with the BSP and already has an OPS license” they added.
“Rest assured that Digital Spring will continue to fulfill its obligations with its partner merchants in parallel to its ongoing compliance with BSP’s requirements,” they said.
“This is but a minor hiccup compared to the dent that we will put on the universe. Relax. We got this,” LYKA said.