The Bangko Sentral ng Pilipinas (BSP) on Friday, July 23, ordered social media platform Lyka to suspend its operations and invited the company to register as an operator of payment system (OPS).
Lyka is a popular app in the Philippines owned by a Hong Kong-based company that allowed people to earn Lyka GEMs or gift cards in electronic mode for posting, sharing, and liking content. These GEMs could be used to purchase goods.
Celebrities and social media personalities have posted photos showing that they were able to purchase cars and other items through GEMs.
The Computer Professionals' Union (CPU) earlier warned the public about the potential dangers of using Lyka, citing security and privacy risks.
CPU cited one section which details what information the app collects from users. These include names, addresses, and contact details, as well as IDs and bank details.
"All these data, when collated together, form a very clear picture of someone's identity and allows unscrupulous users to use these data for nefarious means," CPU said.
The BSP said that based on its features, Lyka should register, as specified in Republic Act No. 11127 or the National Payment Systems Act.
"The operators of Lyka have already expressed their willingness to register with the BSP as an OPS," the central bank said.
Registration is needed to ensure that the app "functions safely, efficiently, and reliably by itself, consistent with the central bank's objectives of consumer protection and financial stability."
The BSP also advised the public to transact only with BSP-registered OPS that are listed on the central bank's website.
In a statement on Friday, Lyka US and Hong Kong said Digital Spring Marketing and Advertising, the operator and marketing arm of Lyka in the Philippines, is "continuously communicating with BSP regarding its OPS application."
It noted that the BSP issued an OPS provisional certificate of registration to Digital Spring.
Moreover, Lyka said Digital Spring works with ePlayment Corporation, a company with an OPS license.
"Rest assured that Digital Spring will continue to fulfill its obligations with its partner merchants in parallel to its ongoing compliance with BSP's requirements," it said. – Rappler.com