Payment Registration Pause
Philippines Proposes Twelve-Month Pause on New Payment System Registrations to Strengthen Oversight
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Key Points
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The proposal would target “aggregator of aggregators” arrangements, requiring payment intermediaries to stop outsourcing their merchant-acquisition functions—a change that could constrain a significant part of the Philippine fintech ecosystem.
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Under the proposed structure, principal acquiring institutions would be held directly accountable for the end merchants they support, increasing responsibility for the conduct and oversight of merchants within payment networks.
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Existing layered merchant relationships would not be subject only to the new direct-relationship requirement immediately; they would undergo phased compliance reviews as the framework is implemented.
The Philippines' central bank has proposed a 12-month freeze on new payment system operator registrations, a move that could reshape the nation's fintech landscape. Finance Magnates reports the Bangko Sentral ng Pilipinas (BSP) is conducting a comprehensive review of its payment taxonomy, licensing framework, and risk-management rules. Applications submitted before the pause could continue evaluation, but approval or rejection would be delayed until the suspension ends.
The freeze specifically targets middleman arrangements where payment companies outsource merchant recruitment to third parties. KuCoin notes the BSP would also impose stricter oversight of banks serving cryptocurrency service providers, including enhanced due diligence and transaction limits. Existing layered relationships would face phased compliance reviews rather than immediate cutoffs.
Why the Central Bank is Pumping the Brakes
The BSP wants to tighten control over who operates payment systems and how they work. CryptoRank explains the review aims to strengthen licensing standards, audit requirements, cybersecurity protocols, and compliance measures across the sector. The regulator believes the current framework allows too much outsourcing, creating gaps in accountability and risk oversight.
Under the new proposed rules, principal acquiring institutions—the main payment intermediaries—would be directly responsible for every merchant they support. Crypto Economy reports this eliminates the "aggregator of aggregators" model, where companies hire other companies to find merchants. Direct accountability means institutions cannot hide behind layers of contractors.
Who Gets Hit Hardest by the Registration Pause
New payment operators cannot register during the 12-month freeze without special BSP approval. TradingView notes this blocks an entire category of fintech startups from entering the market. However, applications already in the pipeline continue to be reviewed—they simply won't receive final approval or rejection until the pause lifts.
Cryptocurrency service providers face additional burdens. Banks and other BSP-supervised institutions serving these firms must now maintain direct merchant relationships, implement enhanced due diligence checks, and monitor transactions closely. Settlement limits and other controls will add operational costs to existing financial institutions.
What Happens to Businesses Already Operating
Existing payment operators don't face immediate disruption. Finance Magnates explains that layered merchant relationships will undergo phased compliance reviews as the new framework rolls out. Companies have time to restructure operations and align with the direct-relationship requirement, rather than facing sudden compliance deadlines.
The proposal remains a draft and only becomes official after the BSP finalizes and publishes it. Crypto Economy reports the pause prevents unapproved entities from starting activities without separate authorization. This gives regulators breathing room to build a stronger oversight system before the sector expands further.
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