Immediate payments: learn what they are, how they operate and their progress in Colombia – Financial Sector – Economy

Have you ever imagined that from your phone you could transfer money to a relative who is miles away or who just activating a button on your mobile would allow you to pay for purchases in the ‘neighbor’ store, lunch ordered at home from that same phone and even give tithes in your church, to go no further?

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Without realizing it, you, like more than 33 million Colombians (66 percent of the country’s adult population), today decide to lower the use of cash to give way to one of the most efficient, fastest, and safest ways to manage that same money: immediate or instantaneous payments.

Colombians fully entered this new wave, that of low-value electronic transactions, in real time and 24/7, in which countries like China, Kenya, India, South Korea, Sweden, Japan and Australia Brazil, among others, have a good lead.

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In Latin America, Brazil leads this commitment through its central bank, which in 2021 launched its PIX immediate payment system, which allows funds transfers between individuals and companies, payments for purchases in physical, electronic, and mobile stores, invoices, and accounts, including the possibility for companies to schedule payments to individuals and accounts to the Government, such as tax collection and from the latter to individuals and companies.

The number of electronic wallets has been growing a lot in Colombia, as well as the number of users, where its users already add up to 33 million.

Photo:

Calculations and analysis Grupo Bolívar

Maybe for this own Bank of the Republic progress in the creation of an interoperable system to which all financial entities can connect directly or through existing payment systems.

In his own words leonardo villarIssuer’s manager, who took part in the last Banking Convention in Cartagena, said system «It will become a mechanism to facilitate the entry of new agents and promote competition and innovation in the provision of payment and transfer services between people and between people and businesses.»

He also said that the selection and contracting process of the technology provider of the system is already underway and that they expect to complete the evaluation of proposals in the third quarter of this year.

Parallel to this, work is being done, together with other actors in the Colombian financial system, on the development of a regulation that allows the consolidation of these key instruments for the economy and people.

projections

Headquarters of the Banco de la República in the center of Bogotá (carrera 7a. with Calle 13), where it has operated since 1950.

Photo:

Time / Courteous

It is not for less. A recent report from the firm ACI Worldwide, a world leader in the development and provision of payment software in real time and GlobalData, indicates that in 2022 immediate payments reached 195,000 million transactions worldwide, a growth of 63.2 percent per year.
The same study indicates that in Latin America there is enormous growth potential and it will have 56 percent adoption by 2027, exceeding the levels expected for Europe and Asia Pacific, as well as for the United States.
Projections suggest that instant payment transactions will grow from 33,000 million to 119,500 million dollars in Latin America by 2027, with Mexico, Colombia, Peru and Argentina leading the way.

Regarding Colombia, the analysis of ACI Worldwide reports that instant payment transactions per capita per month will grow 800 percent between 2022 and 2027, while spending on instant payments, 300 percent.

“We are seeing that the incentives and associations of certain governments and central banks are helping to drive the adoption of instant payments, since they make financial transactions more efficient, convenient and secure”, comments Leonardo Escobar, senior vice president of Latin America of said firm.

Advances in Colombia

Although various immediate or almost-immediate payment mechanisms have been developed in Colombia, electronic wallets would be the instruments most likely to be integrated into the Immediate Payment System (SPI) proposed by the Banco de la República.

Another analysis on the matter carried out by Silvia Juliana Mera, from the economic team of Grupo Davivienda, with the collaboration of Nicolás Mocetón, indicates: «The adoption of digital wallets in Colombia, reflected in the growing number of users, shows the importance of these products to solve different needs of the daily life of Colombians and although it is true that there are still communication barriers, their value cannot be detracted from the process of financial inclusion of many people in the country.»

The figures on the money that Colombians move through their cell phones are very revealing. Only last year they were 406.7 trillion pesos, 4.4 times more than what was registered in 2019.

For their part, operations multiplied by 8 in the same period, totaling 1,748.9 million in 2022, according to the Financial Supervision.

On average, of every 100 pesos that a Colombian family allocates for their daily expenses, only 16 are paid electronically.

Photo:

Diego Santacruz / Archive EL TIEMPO

And of only two electronic wallets that this revolution achieved in Colombia (Daviplata and Nequi), today there is talk of about a dozen operated by different authorized financial agents: Dale!, Movii, Powwi, Ding, Coink, Global66, Lulo Bank, Tuyapay and Tpaga.

The value of the electronic deposits of these entities once closed last year at 2.6 trillion pesos, a figure that compared to the 261,258 million of 2019 reflects a growth of 920 percent. In turn, the number of users is estimated at more than 33 million in 2022, from around 8 million in 2019.

The development agenda for electronic payments of the Banco de la República is not limited to the promotion of an SPI, but also includes the analysis to expand the offer of cross-border payments.

According to Grupo Bolívar experts, the path taken by private immediate payment providers in recent years has been based on constant work to understand the needs of users and to offer simple financial solutions within everyone’s reach.

Hence, this year a new step towards interoperability begins through the unification of QR codes, a service provided by Redeban. “In this way, users will be able to use a single QR to carry out transactions between those entities that have this technology”, explain

They add that this year other important stages will be completed in the process of creating the country’s SPI, such as the treatment of the different layers of information that will be shared, which could delay the process for another year, in the opinion of Asobancaria.

However, they highlight that «the development agenda for electronic payments of the Banco de la República is not limited to the promotion of an SPI, but also includes the analysis to expand the offer of cross-border payments and, later, the review on the convenience of issuing a digital currency».

ECONOMY AND BUSINESS