Raynor de Best
Content expert covering payments and (crypto)currencies
Digital payments landscape in Colombia - statistics & facts
Digital payments and Colombia are not immediately synonymous with each other in 2024, as the country ranks among the most likely users of cash in the world. Within Latin America, the share of cash in Colombia is on par with that of Mexico and Peru. The main difference between these countries, however, is that Colombia's use of cash in POS transaction has not changed much recently. This is due to the country's unbanked consumer base, with over one-third of the country's population not having access to this financial service. Financial inclusion and digital payments are therefore major themes in Colombia, perhaps more so than in other Latin American countries. It may also explain why Colombia ranks in the top 25 countries that receive the most remittances from elsewhere in the world.
Digital payments refer to any form of cashless payment or payments conducted without banknotes or coins in either an online or offline environment. This can include mobile payments (digital payments performed with a mobile device), fintech (such companies tend to be at the forefront of payment digitalization), or relatively young trends like buy now, pay later (BNPL) or cryptocurrency. Out of all these cashless options, which developments are noteworthy to know about for Colombia?
Digital payments refer to any form of cashless payment or payments conducted without banknotes or coins in either an online or offline environment. This can include mobile payments (digital payments performed with a mobile device), fintech (such companies tend to be at the forefront of payment digitalization), or relatively young trends like buy now, pay later (BNPL) or cryptocurrency. Out of all these cashless options, which developments are noteworthy to know about for Colombia?
Colombia's efforts to replicate Brazil's Pix
The success of central bank-led initiatives to promote digital payments in Latin America forced Colombia into action. In October 2023, Colombia's central bank issued an interoperability regulation, mandating that the country's low-value payment systems should now cooperate with each other. The regulation wants to break the status quo: Colombia's banking market is concentrated at three players, with none of them developing card transactions. By imposing their will on banks and the existing systems, Colombia wants to follow a similar model to Pix in Brazil: The Brazilian scheme is controlled and operated by the country's central bank, with bank participation in the scheme being mandatory. Colombia has not yet reached such a stage, though. Mexico's mixed results with its scheme CoDi reveal it may not be a straightforward journey.Colombia's digital payments fintechs aim for Latin America
Although Colombia heavily favors cash in POS, lending and payments dominate the country's fintech industry. Two brands, especially, have ambitions to become relevant in Latin America. Addi is considered one of the region's main BNPL startups. Addi attracted the most BNPL downloads in Colombia, and raising a total of 86 million U.S. dollars in a March 2024 funding round that included Goldman Sachs and Singapore's foreign reserves. Rappi is one of Latin America's so-called "super apps", with its fintech vertical RappiPay being the main introduction for Colombians into credit cards. Time will tell if Colombia's brands can catch up to developments elsewhere in the region.
