(UPDATE) Bangko Sentral Governor Benjamion Diokno said Friday regulators directed social media app Lyka to stop functioning as a payments system without proper registration.
Lyka users can monetize engagement on their accounts by earning GEMs (gift cards in electronic mode) that they can use to pay for most services from food to salon treatments to luxury cars. The more users interact, the more GEMs they earn.
"It has come to our knowledge that Lyka, a social media platform launched in the Philippines by a Hong Kong-based company, allows its users to purchase, exchange, and use GEMs as payment for goods and services. The monetary board has ascertained that these activities make Lyka an OPS," Diokno said.
"Today, the BSP has directed Lyka to suspend activities as an OPS (operator of payment system) and invited the company to apply for registration with the BSP before it is allowed to continue with its OPS activities," he said.
Lyka operators have expressed willingness to register with BSP, said Diokno.
YouTube star Ivana Alawi recently showed just how much celebrities can earn on Lyka after she bought a P3.7-million car using Lyka GEMs.
An entity is considered an OPS if it enables sellers to accept payments, in cash or digital form, through cash-in service providers, bills payment service providers, payment gateways, payment facilitators and more, based on central bank regulations.
BSP reminded the public to carry out transactions only with registered OPS. Being registered means the central bank assures an OPS is safe, efficient and reliable, it said.
The public may report unregistered OPS through the Payment System Oversight Department at psod@bsp.gov.ph or 5306-2744.