Signal Spotlight · Philippine crypto and iGaming, payment infrastructure (follow-up)
What happened
The Bangko Sentral ng Pilipinas has shut more than 8,000 merchant accounts after discovering that ordinary businesses, beauty salons, bakeries, and small neighborhood stores, were being used as payment fronts for unlicensed online casino operators, as reported by Bloomberg and confirmed across FocusGN, WorldCasinoDirectory, and ASTIG. BSP’s surveillance identified the pattern through unusual transaction behavior: individual payments as low as ₱50, with many processed late at night and into the early morning, timing inconsistent with the businesses listed on the accounts. Further examination confirmed those payments were being routed to online casino betting activity.
BSP Deputy Governor Mamerto Tangonan confirmed the findings directly. “We want to protect consumers from online fraud, illegal activities and also from money launderers,” he said. “You cannot expand digitalization if people’s money is being stolen or they’re being scammed.” PAGCOR chairman and CEO Alejandro Tengco also commented, confirming the regulator is aware that businesses with ordinary-sounding names are being used as fronts for unregistered gaming operations, direct confirmation of cross-agency coordination on this issue, not something left to infer.
Alongside the account closures, BSP released a draft circular formalizing new merchant screening requirements for payment service providers. Providers must collect more information on merchants they onboard, including owner details and licenses, and feed that data into a centralized National QR Code Merchant Database, the same database referenced in BSP’s earlier draft rules targeting the QR Ph workaround. Existing layered merchant arrangements must be reviewed within six months of the circular taking effect, with any deficiencies corrected within a further six months. Repeated violations can result in revocation of a payment provider’s license. “If there are illegal activities and you’re not able to stop it, then you are accountable,” Tangonan said.
Why it matters
This confirms the earlier draft rules weren’t a proposal sitting in consultation indefinitely, they’re moving toward real enforcement with a concrete timeline attached. The six-month review window plus six-month correction window gives payment providers a specific, dated compliance runway, not an open-ended expectation to plan around eventually.
The enforcement mechanism itself is worth understanding precisely. Past crackdowns against unlicensed gambling in the Philippines have typically targeted operators or platforms directly, blocking domains, pursuing individuals, revoking licenses. Going after the payment infrastructure specifically, and the disguised merchant accounts sitting between players and unlicensed casinos, cuts off funding at the point of least regulatory visibility. This isn’t the first time BSP has used this lever, it previously ordered financial institutions to remove e-sabong operators from merchant lists in 2022 following that activity’s suspension. The current action operates at a materially larger scale, and against a harder-to-detect pattern, disguised legitimate-looking businesses rather than openly identified gambling merchants.
For licensed operators, this is a genuine structural advantage forming, not just a compliance requirement to absorb. Unlicensed competitors have been able to accept player deposits through these informal networks at near-zero compliance cost, undercutting licensed operators on both price and friction. Closing that channel raises the operational cost of running illegally and narrows the pricing advantage unlicensed platforms have held. The six-month timeline also means this isn’t a distant future risk, it’s an active compliance calendar payment providers, and any operator relying on their rails, need to be tracking now.
What to watch
The formal circular’s finalization. The draft has been released; watch for the exact effective date, which starts both six-month clocks running.
PSP-level enforcement action. The account closures targeted the merchant side. Whether any payment service provider itself faces sanctions for failing to detect these patterns is the next real enforcement signal, and would confirm this extends beyond merchant-level cleanup to provider accountability.
Whether the National QR Code Merchant Database becomes accessible to licensed operators or remains an internal BSP and PSP tool. Operator-level visibility into verified merchant status would be a meaningful additional layer of protection against inadvertently processing payments through a now-shuttered front.
What this means for operators
Review your own payment provider relationships now to confirm none carry exposure that could create service disruption as PSPs move through the six-month review and correction windows. This is also worth treating as a real competitive tailwind, unlicensed platforms just lost a low-cost, low-friction funding channel, worth factoring into how you think about player acquisition messaging around trust and legitimacy over the coming months.
What this means for compliance
Document your organization’s current PSP relationships and their merchant onboarding standards now, before the formal circular sets the enforceable baseline. If your payment stack touches any layered or intermediary merchant arrangement, that’s the specific structure this framework targets directly, confirm it independently rather than relying on a provider’s own assurance that its onboarding is compliant.
What this means for industry bodies
BSP has now quantified the scale of illegal payment infrastructure at more than 8,000 accounts, a concrete, citable data point worth using directly in regulatory engagement. This is also a strong moment to push for a formal, publicly documented coordination mechanism between BSP and PAGCOR, since payment-layer enforcement and gaming license enforcement moving in visible lockstep, rather than in apparent isolation, strengthens the credibility of both agencies’ efforts and gives licensed operators a clearer picture of what coordinated enforcement actually looks like going forward.