Philippines Closes 8,000 Merchant Accounts Linked to Illegal Online Casinos

More than 8,000 merchant accounts in the Philippines have been shut down after authorities found they were allegedly being used to channel payments to unregistered and unlicensed online casino operators.

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According to Bloomberg, the findings came from Bangko Sentral ng Pilipinas, or BSP, the country’s central bank. Authorities found that some businesses, including beauty salons, bakeries, and small stores, were being used to process payments linked to illegal online gambling activity.

The accounts appeared to belong to ordinary businesses. But through surveillance by the government authorities, it turned out that some of them were getting thousands of small transactions late at night and well into the early hours of the morning.

According to Mamerto Tangonan, the deputy governor of the BSP, the central bank intends to safeguard consumers against internet fraud, criminality, and money laundering.

He said digitalization cannot continue to expand if people are losing money through theft or scams. The central bank’s actions are part of a broader effort to strengthen safety and trust in the country’s digital payment system.

Late-Night Transactions Raised Concerns

Bloomberg reported that authorities found some merchant accounts accepting thousands of payments as low as PHP50.00, or US$0.80, after midnight.

The transactions continued into the early morning hours, when businesses such as small stores, bakeries, and beauty salons would normally be closed.

The unusual transaction patterns raised concerns during the authorities’ surveillance. Further examination found that the payments were online casino bets, according to Tangonan.

The findings showed how merchant accounts that appeared to be linked to regular consumer businesses could be used to process payments for illegal online gambling platforms.

Authorities have not provided further details about the specific merchant businesses involved or the total value of the transactions processed through the closed accounts.

However, the shutdown of more than 8,000 merchant accounts reflects the scale of the payment-channel issue identified by the BSP.

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PAGCOR Works With Central Bank

Alejandro Tengco, chairman and chief executive of the Philippine Amusement and Gaming Corp, or PAGCOR, said the regulator was aware that many businesses with harmless-sounding names were actually unregistered online casinos.

Tengco said PAGCOR does not have direct control over such businesses. However, he added that the gaming regulator is working with the BSP on the issue.

The cooperation between PAGCOR and the central bank focuses on addressing payments connected to unregistered and unlicensed online casino operators.

Tengco disclosed last month that PAGCOR was developing an application designed to help customers reach their legal online gambling websites. The application would soon come into existence.

The planned tool is intended to help users identify legal online gaming platforms as authorities continue dealing with payment channels linked to unauthorized operators.

New Rules for Payment Platforms

The comments from BSP and PAGCOR officials came after the central bank released a draft document requiring payment service providers to strengthen their screening of partner merchants.

Under the planned rules, payment platforms will be required to collect more information about merchants before linking them to their systems. The information will include details about business owners and relevant licenses.

The BSP also wants payment platforms to create databases of legitimate merchants. This could help the industry identify approved businesses and reduce the risk of accounts being used for illegal activities.

Tangonan said payment businesses could face revocation of their payment licenses if repeated violations occur. He stated that payment providers are accountable if illegal activity takes place and they are unable to stop it.

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Source: GGR Asia