Evaluating the use of electronic payments in Colombia
This paper seeks to measure the baseline state of the shift from cash to electronic payments in Colombia. It assesses the trajectory of the shift in a way that can allow stakeholders to inform the country’s decisions and priorities. The paper discusses the macroeconomic context for payments and the state of payments infrastructure and presents key policy initiatives which have propelled the shift from cash to electronic payments. It also analyzes the Colombian payments system’s propensity to shift more payments to electronic through the lens of three use cases: mass electronic credits, remote bill payment, and debit card payments. Key findings include:
Regulatory and market conditions support the shift of bulk payments from both private and public sector to electronic form;
Federal government has already driven a shift to electronic in government-originated bulk payments;
Advantage of making bulk payments to employees and providers is not evident for medium- and small-sized firms;
Low financial inclusion is a key factor limiting the demand for electronic bill payments;
Despite the broad issuance of debit cards, people perceive cards as a means to have access to their cash;
Costs associated with cards seem to easily outweigh the benefits for merchants.