Person-to-business Instant payments: could they work in Colombia?

Carlos Alberto Arango, Ana Carolina Ramirez-Pineda and Manuela Restrepo-Bernal
Authors registered in the RePEc Author Service: Manuela Restrepo Bernal

Borradores de Economia from Banco de la Republica de Colombia

Abstract: More than 60 countries in the world have already implemented instant payment systems (IPS). However, in many cases they have been operational mainly for person-to-person transactions. This study looks at the challenges IPS may face in developing economies like Colombia as they advance further into the P2B transactions space. Using a survey on Colombian merchants (IV-2020), the study explores the factors associated with merchants´ propensity to adopt instant payments and those associated with the adoption of current electronic payment alternatives. It shows that IPS will need to have a broad strategy to penetrate the P2B space, as they will have to compete with the low marginal costs and immediacy that cash already offers and the high levels of informality in the commerce sector, especially for micro businesses. Furthermore, IPS will have to meet the high expectations merchants have about instant payments enabling access to other financial services, enhancing their competitiveness, and increasing their bottom line. **** RESUMEN: Más de 60 países en el mundo han implementado sistemas de pagos inmediatos. Sin embargo, en muchos casos dichos sistemas tan solo ofrecen transferencias entre personas. Esta investigación analiza los desafíos que deben enfrentar los sistemas de pagos inmediatos en economías en desarrollo como la colombiana para profundizar sus servicios en el comercio al por menor. Con base en la encuesta a comercios realizada por el Banco de la República en el cuarto trimestre de 2020, la investigación explora los factores asociados a la disposición de los comercios a adoptar pagos inmediatos y otras alternativas electrónicas de pago. Los resultados confirman que los sistemas de pagos inmediatos necesitan de una estrategia clara para lograr consolidarse en el comercio al por menor. En particular, estos deben competir con los bajos costos marginales y la inmediatez en la disponibilidad de los fondos que ofrece el efectivo y los elevados niveles de informalidad, especialmente entre los micro comercios. Además, los servicios de pago inmediatos deberán cumplir con las altas expectativas que tienen los comercios de mejorar el acceso a los servicios financieros, incrementar su competitividad y mejorar su rentabilidad.

Keywords: Instant payments; faster payments; mobile payments; cash and electronic payments; merchants; retail payments; cards; bank transfers; Pagos inmediatos; pagos móviles; pagos electrónicos; pagos en efectivo; comercios; pagos de bajo valor; pagos con tarjetas; transferencias electrónicas (search for similar items in EconPapers)
JEL-codes: D23 D40 E41 E58 G20 G21 G28 (search for similar items in EconPapers)
Pages: 26
Date: 2022-02
New Economics Papers: this item is included in nep-ban, nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://doi.org/10.32468/be.1192

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Journal Article: Person-to-business instant payments: Could they work in Colombia? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:1192

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