According to REUTERS, the number of operations with credit and debit cards grew 80% and the number of transactions increased an outstanding 111% between 2009 and 2016.
However, Colombia’s online payment market still has plenty of growth potential. Many people still don’t trust online payments and – according to LaRepublica.com – 39% of the population are still not comfortable using their financial information online.
Online banking in Colombia doesn’t address trust issues with using cards online
Online banking remains difficult to use in Colombia, with many steps required to perform electronic transactions or wire transfers. The majority of wire transfers are not immediate, especially between different banks, and it can take a couple of days for the money to be made available to the recipient.
When you also consider that high fees are involved in every transaction, there can be no surprise that many people prefer cash to online payments and wire transfers.
According to portafolio.com, only 21% of payments between people in Colombia are electronic, despite the fact that 57% of business transactions and 100% of the Government operations are done electronically.
With this in mind, it is important for online merchants to offer a variety of alternative payments, especially cash-based methods such as Baloto and Efecty.
Different players are investing money to improve this situation
Different types of companies, such as banks, insurance companies, and pension funds, are designing programs to incentivise the use of technology.
Colombian banks, in particular, are investing large sums of money in improving their online systems and applications. Banco de Bogota, for instance, is using biometrics so that customers can access its app using their fingerprint on a smartphone, as well as SMS to serve customers with less sophisticated devices.
Initiatives such as these are crucial for building greater trust between consumers and the online environment and driving greater adoption of online transactions in Colombia.
About the Author
Manuela Otoya, Country Manager Colombia