Title
Regulation of Payment Systems Act
Law
Republic Act No. 11127
Decision Date
Oct 30, 2018
The National Payment Systems Act establishes a regulatory framework overseen by the Bangko Sentral ng Pilipinas to ensure the safe, efficient, and reliable operation of payment systems, mitigating systemic risks and promoting economic growth.

Q&A (Republic Act No. 11127)

The short title of Republic Act No. 11127 is 'The National Payment Systems Act.'

The State recognizes that payment systems are crucial parts of the financial infrastructure and must function safely and efficiently to ensure the stability and effectiveness of the monetary and financial system.

The BSP oversees, regulates, and supervises payment systems in the Philippines to ensure safe, secured, efficient, and reliable operation to control systemic risk and support economic growth.

A Payment System is the set of payment instruments, processes, procedures, and participants that ensures the circulation of money or movement of funds.

The Bangko Sentral can designate payment systems that pose systemic risk or to protect the public interest and require participants to comply with this Act's provisions. This designation remains until revoked by BSP.

Operators are entities or persons who provide clearing or settlement services, or who define, prescribe, design, control, or maintain the operational framework of a payment system.

No, no person or entity can act as an operator of a designated payment system without prior authority from the Bangko Sentral; doing so is subject to enforcement by the Monetary Board.

Settlement effected in accordance with the agreed procedures of a payment system is final and irrevocable and cannot be reversed, except where it is proven that the funds paid were not legally due, in which case it becomes a new monetary obligation.

Willful violations can result in fines ranging from PHP 200,000 to PHP 2,000,000, or imprisonment from 2 to 10 years, or both, at the court's discretion.

The Monetary Board may suspend, disqualify, or remove directors or officers of operators for violations such as willful noncompliance with this Act, delay in reports, refusal of examination, false statements, and activities threatening the safety or reliability of a payment system.

Systemic risk is the risk that the failure of one participant in a payment system can cause other participants or financial institutions to fail in meeting their obligations, threatening the stability of the overall financial system.

A Manager designated by BSP manages the operations of an operator of a designated payment system to ensure safety and reliability, especially when the operator is found to be in violation or poses a risk.

Yes, operators (except BSP-operated systems) must incorporate as stock corporations and meet minimum requirements prescribed by the Monetary Board.

A participant must notify the operator in writing immediately upon issuance of a stay order or declaration of insolvency, bankruptcy, rehabilitation, receivership, or liquidation.

BSP coordinates with other regulators and agencies to avoid regulatory gaps or overlaps and consults prior to suspension or revocation of licenses necessary for payment system operators, including coordination with the SEC and foreign regulators.


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