Name
Global FinTech Guide
Country _ Name
Colombia
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

As of July 2023, 28.8% of FinTechs in Colombia were part of the digital payments’ services segment . This shows the growing importance of digital payment methods in Colombia. According to the latest Latin American financial inclusion index report (2023), 61% of Colombians use digital payment wallets to make transactions and/or payments. This value represents an increase of 15 points over the 2022 figure. This makes Colombia the country with the highest percentage and growth rate in the region .

In addition, the importance of modern payment services in Colombia is further demonstrated by the inclusion of a special section on e-commerce in the Colombian Consumer Statute. Yet, electronic payment services have created a challenge for lawmakers and regulators in Colombia since although this model offers alternative payment services it also triggers a potential fraud risk.

Due to the increasing significance of modern payment services in the country, the Colombian Central Bank is currently developing an Immediate Payment System (Sistema de Pagos Inmediatos) that will enable users to make immediate wire transfers regardless of where the money is deposited (e.g. accounts from any bank, digital wallets, etc.). Besides this, the system seeks to reinforce security in the transactions, as well as the efficiency of financial institutions and their liquidity . The Colombian Central Bank has stated that this system would begin operations in 2025.

Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

Law 1735 of 2014 regulates online payments services in Colombia. This law created a special kind of companies, the Specialied Companies in Deposits and Electronic Payments (known for its initials in Spanish as Sedpes). 

Sedpes companies act as a channel to collect money from the public to facilitate electronic transfers and payments. 

Colombian law states that financial institutions and Sedpes companies may offer electronic deposits with simplified opening procedures.

Sedpes companies may be established by an individual or legal entity provided the requirements established for this purpose in Colombian law are fully complied.

In addition, commercial establishments must comply with the following conditions as set out by ACH Colombia (institution created for online payment) to offer online payment services:

  1. A current or savings bank account must be in place with any Colombian financial institution linked to ACH Colombia, where the commercial establishment will receive the amounts collected.
  2. The commercial establishment must be presented by its trusted financial institution.
  3. A website and carrying out the technical process of implementation is required, testing and certification before ACH Colombia, which includes creation of secure communications channel (VPN), implementation of digital certificate, development of web services required for functionality.

Additional comments regarding the legal situation for payment services or

what FinTech’s must be aware of in this business area N/A.

Economic conditions

Market size for payment services and biggest payment service providers

Colombia has been no stranger to this new global trend, which has led to an exponential growth in e-commerce in recent years. In fact, information available for the last five (5) years shows a growth of 24%, which makes it possible to forecast that by 2021 the country will reach sales of over US$ 26,077 million. 

The e-commerce boom in Colombia has triggered the commercialisation of a significant number of national and international technological solutions that include payment gateways (payment methods), logistics services, personalised web development and even pre-designed ready-made virtual stores.

There are at least six (6) payment gateways that have become known and used in the sector. Among those authorised are the following:

  • Epayco;
  • Mercado Pago;
  • PayPal;
  • PayU;
  • Wompi; and
  • Zona Pagos.

Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area

N/A.

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