Colombia's Central Bank Establishes Framework for Instant Transfer System

The Central Bank of the Republic of Colombia has established the groundwork for the country’s instant transfer system. This new mechanism, inspired by the Brazilian Pix platform, aims to end reliance on payment methods like PSE and Transfiya, which were deemed insufficient.

The bank’s Board of Directors officially set the regulations on November 1, 2023. These new rules will mandate low-value payment systems, such as Nequi or Daviplata, to interoperate with each other. Before this, these platforms functioned as two separate entities, rendering direct transfers between them impossible. The bank’s new External Resolution No. 6 of 2023 provides a guide for implementing this interoperable model within the country’s financial system.

Aiming for Interoperable Payment System

Leonardo Villar, the General Manager of the Bank of the Republic’s Board, had previously announced in October that a tender for the interoperable payment system would be issued. The recently published regulations are in alignment with this announcement, aiming to centralize payments and immediate transfers to streamline processes, including state subsidy payments.

The Development Plan offers a solution by proposing a transition period to adapt to new regulations. It also allows the Issuer to establish and manage an immediate low-value payment system and provide the necessary technology services for system interoperability.

Key Points of the New Regulation

The new resolution from the Bank of the Republic addresses several key points. It mandates that immediate payment systems must interoperate if the payment orders and immediate fund transfers processed are of the same classification.

Payment service providers like Nequi or Daviplata are required to adopt a customer-identifiable seal, the name and image of which will be decided by the Management Board. Furthermore, participants are allowed to set the rates and commissions for immediate transfer processing freely.

The resolution also prohibits differential treatment leading to discriminatory practices with users. This refers to aspects like access technology, payment processing, rates, prices, or commissions charged for services.

Finally, the Bank of the Republic outlined the obligations for entities offering these immediate payment systems. These include implementing mechanisms for processing transfers, using messaging and connection standards for payment processing, and developing advertising programs to inform and educate the public about the new seal.