The Bangko Sentral ng Pilipinas (BSP) has found online casinos posing as beauty salons, bakeries and other ordinary businesses to process bets through payment platforms, according to Bloomberg.

BSP has since closed more than 8,000 merchant accounts over alleged illegal activities, and payment providers now face license revocation if they repeatedly fail to screen out such businesses.

BSP’s surveillance flagged merchants that appeared unremarkable on paper but were accepting thousands of payments as small as PHP50, often past midnight and into the early morning.

Authorities determined the transactions were bets placed with online casinos.

Illegal operators used the identities of small, seemingly legitimate retailers, including mom-and-pop stores, to receive the payments, according to BSP Deputy Governor Mamerto Tangonan.

“We want to protect consumers from online fraud, illegal activities and also from money launderers,” Tangonan said. “You cannot expand digitalisation if people’s money is being stolen or they’re being scammed.”

BSP’s Proposed Fix

The findings prompted BSP to release a draft circular putting the onus on payment service providers to screen the merchants they work with more closely.

Under the proposal, payment providers must authorise every intermediary in a merchant arrangement, keep payment flows fully traceable to the merchant, and restrict high-risk businesses such as casinos and gambling operators to direct arrangements.

Existing arrangements would need review within six months of the circular taking effect, with deficiencies corrected within another six.

The proposal follows earlier BSP action requiring e-wallet providers to remove direct links to licensed online gaming operators in 2025; PAGCOR has since said licensed operators account for about 50% of Philippine online gambling activity, up from an estimated 25% before the link removal.

Maya said it supports measures that “strengthen the integrity, safety and trustworthiness of the digital payments ecosystem,” while the EMoney Association of the Philippines said it fully supports BSP’s goals and is reviewing the proposed circular.

Featured image: Edited by Fintech News Philippines based on an image by vicnt via Magnific.