In Latin America and the Caribbean (LAC), fast payment systems (FPS) are transforming the banking landscape, driving financial inclusion, enhancing efficiency, and improving consumer convenience.
Among the 15 FPS launched across the region, Costa Rica’s SINPE Móvil stands out as a success story. The system has significantly helped increase the number of individuals with bank accounts, reduce ATM transactions, and accelerate the transition away from cash-based transactions, underscoring the pivotal role of FPS in creating a more inclusive and digital financial ecosystem, according to a recent report by the Bank for International Settlements (BIS) says.
The paper, released in December 2024, explores lessons from a range of FPS deployed across the world, offering an in-depth analysis of successful schemes in the Americas, particularly Costa Rica’s SINPE Móvil.
Costa Rica’s SINPE Móvil
SINPE Móvil is a FPS launched by the Central Bank of Costa Rica in 2015. The system enables peer-to-peer transfers using mobile phone numbers as aliases.
These electronic money transfers can be made through various channels, including SMS, e-banking, mobile apps, and ATMs, are available 24/7, and are free of charge for transactions up to CRC 100,000 (about US$200).
To use SINPE Móvil, users must have a transaction account with a participating financial entity and an active mobile phone line. Currently, SINPE Móvil is restricted to accounts in Costa Rican Colón (CRC).
Adoption of SINPE Móvil
Though adoption of SINPE Móvil started slow, it accelerated during COVID-19, taking off in 2020 as Costa Rica implemented lockdowns to attenuate the pandemic. Transactions with SINPE Móvil then quickly overtook other interbank transfer methods. Soon, they accounted for close to 80% of all interbank transfers.
By mid-2024, there were nearly 3 million SINPE Móvil users and 4 million accounts, with over 76% of Costa Ricans aged 15 and older actively using the system. This makes Costa Rica one of the world’s most active FPS adopters.
Globally, SINPE Móvil ranks fourth in transactions per capita, following Thailand’s PromptPay, Brazil’s Pix, and Sweden’s Swish. Though the system only represents 4% of the value of all interbank transfers in Costa Rica, it excels in facilitating low-value, retail-focused transactions.
To further expand SINPE Móvil, the central bank is now incorporating QR code functionalities, allowing users to send and receive payments without needing payee account numbers or mobile phone numbers.
Other new features, such as request to pay (RTP), are also being explored to facilitate more complex payment use cases such as invoice and bill payments, recurring payments and subscriptions, and embedded payments in business-to-business (B2B) transactions.
The impact of SINPE Móvil
In Costa Rica, SINPE Móvil has significantly impacted the banking system and financial inclusion. From 2018 to June 2024, the share of population older than 15 with a bank account rose from around 77% to 90%, aligning with SINPE Móvil’s growing adoption. Notably, 84% of those with at least one bank account is now an active user in SINPE Móvil.
Second, higher SINPE Móvil use is correlated with lower ATM transactions, signaling a shift away from cash. In 2019, Costa Rican households performed 155 million ATM transactions and only 6 million SINPE Móvil payments. By 2023, these figures stood at 104 million ATM transactions and 506 million SINPE Móvil payments.
Furthermore, this reduction in cash reliance is yielding annual cost savings equivalent to 0.5% of Costa Rica’s gross domestic product (GDP) annually.
LatAm’s digital payment revolution
The retail payment landscape in LAC is undergoing a profound transformation, with the introduction of FPS driving much of this shift.
In total, more than a dozen FPS have been launched across the region. Brazil’s Pix, introduced in 2020, has become a benchmark in the market. In 2023, the platform processed 42 billion transactions worth US$3.3 trillion, and between July 2023 and July 2024, over 90% of the adult population in Brazil had received or initiated a Pix transaction. Today, 75% of the Brazilian population use Pix in their daily lives, translating to 153 million people.
In Mexico, the central bank launched Cobro Digital (CoDi) and Dinero Móvil (DiMo) in 2019 and 2023 respectively, building upon the large-value Sistema de Pagos Electrónicos Interbancarios (SPEI) system. By September 2024, the system had grown to 20.3 million validated CoDi accounts, according to BIS.
In Bolivia, a standardized and interoperable QR code called QR BCB Bolivia was implemented in 2022. The move boosted QR transactions, which reached a total of 290 million transactions in October 2024, marking a staggering growth of 4,733% from just 6 million in 2021, according to the central bank.
Argentina launched Transferencias 3.0 in 2021, comprising different fast payment services provided by the private sector, including payments initiated with QR codes, while Uruguay has enabled end users to send and receive fast payments using Toke since September 2024.
Advancing cross-border payments
In addition to FPS, jurisdictions in the Americas have also taken initiatives to foster cross-border payment system interoperability.
In Central America, Sistema de Interconexión de Pagos (SIPA) connects the real-time gross settlement systems of six jurisdictions in the region, namely Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, enabling faster, cheaper cross-border transactions.
In June 2023, the same Central American jurisdictions launched Transfer365 CA-RD, a system for instant cross-border payments that has rapidly achieved scale in terms of both number and value.
Various other cross-border initiatives are being explored in LAC to address the high costs and long processing times of cross-border payments. For example, Brazil’s Pix has gained traction beyond its borders. Merchants in neighboring countries, including Argentina, Paraguay, and Uruguay, have started accepting Pix, enabling Brazilians to make seamless payments while traveling or conducting business in these nations.
Featured image credit: edited from freepik
