THE BANGKO SENTRAL ng Pilipinas (BSP) has lifted a three-year moratorium on the grant of new electronic money issuer (EMI) licenses to nonbank financial institutions (NBFI) effective Dec. 16.

“The BSP’s decision to lift the moratorium aims to promote digital payments, enhance financial inclusion, and foster innovation that could serve a wider segment of the market,” the central bank said in a memorandum dated Dec. 15 and signed by BSP Deputy Governor Mamerto E. Tangonan.

The central bank in November 2021 imposed an initial two-year moratorium on the entry of new EMI-NBFIs under its regular license application window  to “ensure that its resources are managed and mobilized judiciously in a manner that promotes financial stability and inclusive growth, and advances the development of innovative e-money solutions that offer strong value propositions.” This was extended by another year in December 2023.

However, exceptions were provided to nonbank EMI applicants with proposals involving new business models, unserved or targeted niches, and/or new technologies. Qualified firms were allowed to operate under the BSP’s “test and learn” or regulatory sandbox framework.

Those seeking new EMI-NBFI licenses should only submit applications that went through “thorough market research and data-driven analysis process, particularly focused on the specific market they intend to serve,” the BSP said.

“The application must present insights on the planned business model and target market, through evidence-based market study to increase its value proposition in the industry.”

Firms must also meet the licensing criteria for EMI-NBFIs, including those on capital adequacy, risk management systems, and qualifications of their senior management and shareholders, among others.

“Only applications that meet the standard licensing criteria, include evidence-based market study, and involve a) new business models; b) unserved market, targeted niches; and c) new technologies, shall be accepted for processing,” the central bank added.

Under the Manual of Regulations for Banks, the BSP classifies e-money issuers under three categories: EMI-Bank for banks with EMI licenses, EMI-NBFI for BSP-supervised non-bank financial firms, and EMI-Others for non-banks registered with the regulator as monetary transfer agents.

As of September 2024, 27 banks have EMI-Bank licenses, while 42 nonbank financial institutions held EMI-NBFI licenses, according to BSP data. — AMCS