Philippine payment firms face license risk as BSP targets disguised online casinos

Payment service providers in the Philippines could lose their licenses if they repeatedly fail to stop illegal online casinos from using their platforms. The Bangko Sentral ng Pilipinas (BSP) is now asking PSPs to do a much deeper merchant check, because some gambling operators were hiding behind ordinary-looking businesses such as beauty salons and bakeries.

1. The BSP found the activity while reviewing payment patterns involving thousands of transactions worth as little as PHP50 ($0.80), Bloomberg reported, citing BSP Deputy Governor Mamerto Tangonan. Many of the payments were made after midnight or in the early morning, routed through merchants that looked harmless on paper, but were later identified as bets placed with online casinos.
2. Accounts associated with more than 8,000 merchants have since been closed for alleged illegal activities, according to the report. Small local retailers were also among the businesses whose identities were reportedly used to receive payments, which is exactly the kind of merchant camouflage that makes payment monitoring messy in practice.
3. The BSP has released a draft measure that would place greater responsibility on payment service providers to screen the merchants they onboard. Providers would need to collect more information, including ownership details and business licenses, and maintain databases of legitimate merchants.
4. The review also targets merchant aggregators, which sit between payment providers and large numbers of smaller businesses. On paper, that model helps expand digital payments; in practice, it can make it harder to identify the ultimate recipient of a transaction, which is the whole problem when illegal gambling is trying to hide in plain sight.
5. “If there are illegal activities and you’re not able to stop it, then you are accountable,” Tangonan told Bloomberg. Philippine Amusement and Gaming Corporation (PAGCOR) Chairman Alejandro Tengco said the regulator was aware that some seemingly legitimate businesses were operating as unregistered online casinos and was working with the BSP.

Digital payments accounted for about two-thirds of Philippine retail transactions in 2025, up from 57 percent in 2024 and 10 percent in 2018. For PSPs, that means the merchant onboarding stack is no longer a back-office hygiene issue; it is part of the licensing risk.