Philippines shuts 8k merchant accounts amid illegal online casino payment probe: report

More than 8,000 merchant accounts in the Philippines have been shut down for allegedly illegal activities, after authorities found businesses – including beauty salons, bakeries and small stores – were being used to channel payments to unregistered and unlicensed online casino operators. That is according to Bloomberg, citing findings by Bangko Sentral ng Pilipinas (BSP), the country’s central bank. On Thursday, the outlet carried comments from Mamerto Tangonan, the bank’s deputy governor, about online fraud risk in the country. “We want to protect consumers from online fraud, illegal activities and also from money launderers,” Mr Tangonan was quoted as saying. “You cannot expand digitalisation if people’s money is being stolen” or they are “being scammed,” he added. Bloomberg’s report said surveillance by the authorities indicated some merchant accounts had been accepting thousands of payments involving amounts as small as PHP50.00 (US$0.80) past midnight local time, and into the early hours of the morning, when typically many small businesses would be closed for the night. Authorities discovered the payments were bets on online casinos, said Mr Tangonan. The report also quoted Alejandro Tengco, chairman and chief executive of the Philippine Amusement and Gaming Corp (Pagcor), saying the regulator was aware many innocuous-sounding businesses were actually unregistered online casinos. “Unfortunately, we don’t have control over that,” Mr Tengco said, though he added Pagcor was working with the central bank regarding the issue. Last month Mr Tengco said a Pagcor app to guide players to legitimate online gaming sites was due to launch before year-end. The two officials’ latest comments came after the central bank released a draft document that emphasises payment service providers must improve screening of their partner merchants. The central bank will now require payment platforms to collect more information on merchants being linked up, including owner details and licences. It also wants payment platforms to set up databases of legitimate merchants. Repeated violations could lead to revocation of payment licences, Mr Tangonan was cited as saying. “If there are illegal activities and you’re not able to stop it, then you are accountable,” he stated, referring to the payment businesses. The EMoney Association of the Philippines, a trade body, was cited by Bloomberg as saying it 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, per the news outlet.