Casinos posing as beauty salons spur Philippine digital payment review

MANILA – Electronic payment providers need to be more diligent in vetting companies that use their platforms in order to protect people from fraud, the Philippine central bank said.The requirement came after Bangko Sentral ng Pilipinas found thousands of illegal businesses on the payment platforms, including many online casinos masquerading as more ordinary companies like beauty salons and bakeries.“We want to protect consumers from online fraud, illegal activities and also from money launderers,” Deputy Governor Mamerto Tangonan said in an interview. “You cannot expand digitalisation if people’s money is being stolen” or they’re being scammed.His comments came after Bangko Sentral ng Pilipinas released a draft document that puts the onus on payment service providers to improve screening of the merchants they partner with.Alarm bells starting ringing for the central bank after surveillance discovered many merchants, which on paper were unremarkable, were accepting thousands of payments of as little as 50 pesos (S$1) past midnight and into the early hours of the morning, according to Tangonan.Authorities discovered the payments were bets on online casinos, he said. Mom and pop stores were also among the enterprises used by over 8,000 merchants whose accounts have now been shuttered for allegedly illegal activities.Philippine Amusement and Gaming Corp. Chairman Alejandro Tengco said the state regulator is aware that many innocuous sounding businesses are in reality unregistered online casinos and is working with the central bank. “Unfortunately, we don’t have control over that,” Tengco said.The discovery also highlights the problems that arise when e-payments companies use intermediaries, called merchant aggregators, to help them aggressively expand their business.Financial inclusion is a big push in the archipelago of over 7,000 islands, and merchant aggregators are incentivised to link many small – mostly legitimate – businesses in far-flung areas to formal payment channels.The Philippines central bank will now require payment platforms to collect more information on merchants being linked up, including owner details and licenses. It also wants them to set up databases of legitimate merchants.Repeated violations could lead to revocation of payment licenses, the central bank official said. “If there are illegal activities and you’re not able to stop it, then you are accountable,” Tangonan said.Use of online payments in the Philippines has exploded in recent years amid the popularity of mobile wallets like GCash, whose parent Mynt is set to hold a record initial public offering in October. Maya, a large e-wallet and digital bank operator backed by KKR and PLDT, is also considering going public. Maya said the company supports measures that “strengthen the integrity, safety and trustworthiness of the digital payments ecosystem,” adding that Maya has merchant on-boarding, due diligence and monitoring processes in place.The EMoney Association of the Philippines said the group fully supports the central bank’s goals of safeguarding and improving the country’s payment system.“It is important that there is accountability from the industry to ensure that we have a safe digital ecosystem for the market,” a representative said in a text message. The association is currently reviewing and evaluating the BSP’s proposed circular.GCash didn’t immediately respond to a request for comment.Digital payments accounted for around two-thirds of total retail transactions in the Philippines in 2025, up from 57 per cent in 2024 and a share of just 10 per cent in 2018, when the central bank started reporting data.While more stringent due diligence may temporarily slow the expansion of digital payment activities, Tangonan said it should set the sector up for more sustainable growth. “You shouldn’t sacrifice safety for growth,” he said. “There’s no trade-off there.” Bloomberg