Philippine Central Bank Targets Casino Micro-Payments

The Bangko Sentral ng Pilipinas, the Philippines’ central bank, wants to change how every e-wallet and payment app in the country signs up merchants after shutting more than 8,000 merchant accounts over alleged illegal activity, many of them online casinos posing as small retailers. A draft circular would now let casinos into the payment system only through a direct merchant arrangement, with no intermediary in the middle.

The draft policy, titled “Regulations to Strengthen Integrity Controls in Payment Transactions,” proposes structural amendments to the BSP’s Manual of Regulations for Payment Systems (MORPS). It carries Governor Eli M. Remolona Jr.‘s signature, though the approval date and Monetary Board resolution number are still blank. The Philippine Star reported the proposal on September 7, and Bloomberg added the details of the crackdown behind it this week.

Bets at Midnight, Dressed Up as Bakeries

The trigger was a pattern in the data. BSP surveillance flagged merchants that looked unremarkable on paper but were accepting thousands of payments of as little as ₱50, past midnight and into the early morning. Deputy Governor Mamerto Tangonan said the payments turned out to be bets on online casinos, many of them running behind storefronts described as beauty salons and bakeries.

Tangonan put the goal plainly. “We want to protect consumers from online fraud, illegal activities and also from money launderers,” he said. He also made clear that payment service providers  bear strict legal responsibility under the Anti-Financial Account Scamming Act (AFASA / Republic Act No. 12010), adding that “if there are illegal activities and you’re not able to stop it, then you are accountable.”

Digital payments made up around two-thirds of retail transactions in the Philippines in 2025, up from 57% in 2024 and 10% in 2018, and payment firms rely on merchant aggregators to link many small businesses to formal payment channels. Those layers are exactly where it gets hard to see who’s really being paid.

What the Draft Would Change

Casinos and gambling businesses, land-based and online, would be grouped as high-risk merchants alongside gaming-related businesses, money service businesses and licensed crypto exchanges. All of them could only be onboarded directly by the acquirer, with enhanced due diligence and monitoring, and firms could put transaction and settlement limits on them.

The draft also bans any setup that hides the ultimate merchant or beneficiary or makes a transaction impossible to reconstruct. A new National QR Code Merchant Database would hold identifiers, licensing status, beneficial owners, settlement accounts and sanctions flags for every merchant accepting QR Ph payments.

Deadlines and a Licensing Freeze

Existing layered arrangements would have to be reviewed within six months of the circular taking effect, with any gaps fixed within another six months. Repeated violations could cost a payment firm its license. The BSP would also stop accepting new applications to register as an operator of a payment system for 12 months. If finalized, the circular takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.

A Fix That Could Push Players Offshore

The BSP has been here before. Last year it ordered e-wallets to remove their direct links to licensed online gaming operators. PAGCOR, the country’s gaming regulator, now puts channelization, the share of online play on licensed sites instead of black market ones, at around 50%, against a reported 75% before the delinking.

PAGCOR chairman Alejandro Tengco said the regulator knows many innocent-sounding businesses are really unregistered online casinos and is working with the central bank, but he was frank about the limits. “Unfortunately, we don’t have control over that,” he said. E-wallet operator Maya backed measures that “strengthen the integrity, safety and trustworthiness of the digital payments ecosystem,” while GCash did not immediately respond to requests for comment.

Law Firm Warns Against Blanket De-Risking

Not everyone thinks the draft is safe as written. Samuel Tarng, Founder and CEO of Philippine gaming law firm Arden Consult, supports the goal but warns that banks and payment providers may treat the high-risk labels as outright bans. He noted that “payment firms already decline transfers when a counterparty’s name contains a word like ‘bet’.”

He pointed to the Netherlands, where tighter deposit rules on licensed sites saw the legal market’s share slide toward half, and to US poker processors that recoded deposits as purchases of golf balls and jewelry after banks were told to stop processing bets. His point is that friction on the licensed side tends to send players to operators the rules never reach.

The central bank’s own count explains why it’s moving anyway. It has already shut more than 8,000 merchant accounts, with online casinos dressed up as bakeries and beauty salons among them.