Digital banking and e-wallet users now enjoy stronger protection against fraud and unauthorized access, as Bangko Sentral ng Pilipinas (BSP)-supervised financial institutions begin rolling out advanced authentication systems ahead of a key deadline.
Under BSP Circular No. 1213 issued in May 2025, covered institutions must replace SMS- and email-based one-time passwords (OTPs) with more secure technology by June 25, 2026. Approved alternatives include biometric verification, behavioral analysis, adaptive security tools, and passwordless login solutions. The policy applies to banks and e-wallet providers averaging over ₱75 million in monthly online transactions — covering nearly all universal and commercial banks, all digital banks, and several cooperative, thrift, and rural banks. Many have already started implementing the upgrades.
BSP Deputy Governor Lyn I. Javier emphasized that the policy balances progress and safety. “The BSP is equally dedicated to promoting innovation in financial services as to protecting customers from new forms of fraud, including technology-enabled fraud. We are pleased that banks and e-wallet operators are stepping up on both fronts,” she said.
The new rules apply stricter checks to transactions classified as high-risk, determined by factors such as transaction amount, payee details, customer usage patterns, and product type. For lower-risk activities, institutions may continue using simpler methods like SMS OTP. Financial firms not meeting the ₱75-million threshold are exempt from the immediate shift but are still required to regularly review risks and put in place appropriate safeguards.
Beyond authentication, the circular also mandates stronger fraud monitoring systems. Institutions must be able to flag unusual activity — such as rapid successive transfers, payments to new recipients, or access from unrecognized devices — to stop unauthorized transactions before they are completed.
The policy marks a significant step in strengthening the country’s digital financial infrastructure. By raising security standards, the BSP aims to build greater public trust in digital payments while supporting the sector’s continued expansion, ensuring growth does not come at the cost of user safety.
