BSP onboards first nonbank electronic money issuer as a direct peso RTGS participant

The Bangko Sentral ng Pilipinas (BSP) has reached another central banking milestone with the onboarding of OmniPay, Inc. to the roster of financial institutions that settle high value transactions safely and instantly through the BSP-owned and operated PhilPaSSplus.

On 20 October 2023, OmniPay, Inc. became the first nonbank electronic money issuer (EMI) participant in the BSP’s Real Time Gross Settlement (RTGS) payment system. OmniPay is the first nonbank EMI licensed and supervised by the BSP.

“Giving nonbank electronic money issuers access to the RTGS system is in accordance with the National Payment Systems Act, authorizing the BSP to determine the institutions that are allowed to participate in payment systems owned and operated by it, and those that can open an account with the BSP for settlement purposes,” says Assistant Governor Mary Anne P. Lim, who heads the BSP’s Peso RTGS Management Committee.

The extension of PhilPaSSplus access signals an era of a more inclusive national payment system, where nonbank financial institutions can make efficient and low-risk funds transfers without an existing RTGS participant sponsoring them into settlement.

Direct access to the PhilPaSSplus allows nonbanks to benefit from the efficiency and safety of sending, receiving, and maintaining funds with no less than the central bank.

Assistant Governor Lim highlights that “As direct participation in the Peso RTGS payment system is expected to become more diverse based on global trends, the BSP has rules in place to safeguard the entire Peso RTGS payment system.”

There are now 236 institutions using the PhilPaSSplus to settle large value transactions and retail payment clearing results arising from ATM, InstaPay, PESONet, and check transactions.

These institutions include universal and commercial banks, thrift banks, rural banks, digital banks, Nonbank Quasi-Banks (NBQBs), Clearing Switch Operators (CSOs), Financial Market Infrastructures (FMIs), and nonbank EMI participants.

The BSP is among the first central banks that have initiated broader direct access of nonbank entities to central bank settlement services.

International standard-setting bodies have started developing access guidelines to ensure that the attendant risks remain manageable while payment systems continuously evolve amidst the emergence of new players and breakthrough financial technologies.