Person-to-business instant payments: Could they work in Colombia?

Carlos Alberto Arango, Ana Carolina Ramirez-Pineda and Manuela Restrepo-Bernal
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Ana Carolina Ramirez-Pineda: Payments Systems and Banking Operations Adviser, Central Bank of Colombia, Colombia
Manuela Restrepo-Bernal: Specialised Professional, Central Bank of Colombia, Colombia
Authors registered in the RePEc Author Service: Manuela Restrepo Bernal

Journal of Payments Strategy & Systems, 2021, vol. 15, issue 4, 376-397

Abstract: More than 60 countries have already implemented instant payment systems. However, in many cases they have been limited to person-to-person transactions. This study looks at the challenges that instant payment systems may face in developing economies like Colombia as they advance further into the person-to-business (P2B) transaction space. Using a survey of Colombian merchants, the study explores the factors associated with merchants’ propensity to adopt instant payments and identifies those associated with the adoption of electronic payment alternatives. The study finds that instant payment systems will require a broad strategy if they are to penetrate the P2B space, as they will have to compete with the low marginal costs and immediacy offered by cash and the high levels of informality in the commerce sector, especially for micro businesses. Furthermore, instant payment systems will have to meet merchants’ high expectations with respect to enabling access to other financial services, enhancing competitiveness and increasing their bottom line.

Keywords: instant payments; faster payments; mobile payments; cash and electronic payments; merchants; retail payments; cards; bank transfers (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Person-to-business Instant payments: could they work in Colombia? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2021:v:15:i:4:p:376-397

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