Discover Colombia’s preferred local payment methods

Discover Colombia’s local digital payment methods for online and in store

Countries Colombia

Colombia: an e-commerce & payments primer

Colombia is a tough market but one with enormous potential. E-commerce is growing and expected to grow over the next years at an average rate of 18.4% a year, but the sector is still relatively small and ripe for development. The opportunities are there for merchants able to localise and develop a model that will both appeal to Colombian consumers and mitigate risks.

Credit cards are the most common type of online payment method in Colombia, used in 51% of all purchases [1]. Cash is used in 9% of online purchases, bank transfer in 18% and wallets in 13% [1]. Mastercard is the most popular brand of payment card with 44% of the market. Visa has 33%, American Express has 1% [1].

22% of online card payments are made with localized credit cards issued by the global brands Visa, Mastercard and American Express but restricted to domestic use. Those localized versions of international credit card schemes are characteristic for the LatAm countries Argentina, Brazil, Chile, Colombia, Mexico and Peru.  Those local cards are limited in use, as they are restricted to local purchases and cannot be used cross-border. Even if those cards are issued by international brands and may seem like standard credit cards, they can only be used in the country in which they are issued and can only be used to make payments in that country’s currency.

The IMF estimates that the Colombian economy will grow by 5.8% in 2022, down to 3.6% in 2023 and then 3.4% in 2024 [2]. The long-term unemployment rate is just over 11%, down from 16% in 2021 [2]. By the end of the first quarter of 2022 inflation had already hit 8% [2]. By August 2022 it reached a 23-year high of 10% [3].

The e-commerce market

The Colombian e-commerce market is worth $10 billion [1], up from just $1.07 billion in 2014 [4]. The most popular categories are fashion (33%), electronics & media (21%) and furniture & appliances (19%) [1].

Underpinning this growth is the increased availability of usable Internet connections. In 2014, Colombia announced a plan to make the Internet available to 63% of the population by 2018 [5]. And the country has hit its goal: 69% of the population today has Internet access of some kind [1].

Colombians complete 43% of all online purchases using a mobile device [1]. This is unsurprising, with smartphone penetration in the country at close to 75% [1]. According to the International Telecoms Union, just over 71% of the population has a mobile-broadband connection while only 16% of Colombians have a fixed-line Internet connection [6]. So, any e-commerce strategy for Colombia must be mobile first. 

Almost half of Colombians have shopped cross-border [1]. Their purchases account for 14% of all Colombian e-commerce [1].

Enabling and limiting factors

Despite various government drives to increase the availability of affordable Internet, a digital divide remains in Colombia. Overall, as already noted, 69% of the population has Internet access of some kind and 74% has an Internet-enabled smartphone [1]. However, the speed of your connection and its price is likely to vary greatly depending on location. In Bogota, $30 a month will get you a 30Mbit/s line [7]. In a rural area, for the same price you’ll get around 2Mbit/s [7].

Only 49% of the population is banked and 15% has a credit card [1]. In recent years, however, Colombia has been highly effective in promoting financial inclusion. Using its database of benefits recipients, the government notified unbanked citizens to tell them that they would need a bank account to receive state benefits [8]. The state then worked with digital banks to enrol these citizens with new digital bank accounts. More than two million were signed up for new accounts [9]. 

Colombia is 58th out of 160 countries in the World Bank’s Global Logistical Performance Index – an impressive jump from its previous position in 94th place [10]. In rural areas, remoteness, lack of infrastructure and distance can make delivery challenging. 

  1. Original PPRO research
  2. https://www.imf.org/en/Countries/COL
  3. https://www.bloomberg.com/news/articles/2022-08-05/colombian-inflation-jumps-more-than-forecast-to-a-23-year-high
  4. https://www.ppro.com/allpago/ecommerce-growing-rapidly-in-colombia-reaching-us-2-53bn-by-2018
  5. https://colombiareports.com/2018-63-colombians-will-connected-internet
  6. https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx
  7. https://www.dw.com/en/colombia-is-becoming-an-online-country-but-a-digital-divide-still-separates-cities-from-the-countryside/a-47563079
  8. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/covid-catalyzes-financial-inclusion-in-colombia-59068822
  9. https://oxfordbusinessgroup.com/overview/time-right-stable-investment-environment-and-infrastructure-expansion-projects-offer-attractive
  10. https://lpi.worldbank.org/international/global

Page index

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Quick facts

In recent years, thanks largely to the availability of easy-to-use digital banking, the unbanked population of Colombia has shrunk from 30% to 23%.

Between 2022 and 2028, the Colombian social-commerce market is expected to grow by more 35% to reach a value of over US$3 billion

Internet penetration in Colombia is almost 70%. The average fixed-line connection speed is 55.21 Mbps [4]. For mobile connections, the average is 13.34 Mbps.

Between 2019 and 2022, the number of Colombian Internet users with a fast fibre-optic connection to the home grew by 218%.

Between 2022 and 2025, the average amount each Colombian online shopper spends in a year will increase from US$230 to US$325.

General Information

  • Population 51.6 m
  • Population 15 + 40.4 m
  • Online population 35.7 m
  • Area 1,141,748 km2
  • Currency COP
  • GDP 300.8 bn $US
  • GDP per capita 5,829 $US

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"51"},{"label":"Cash-based payments","value":"9"},{"label":"Bank transfer","value":"18"},{"label":"Wallets","value":"13"},{"label":"Other","value":"9"}]

Banked population
  • Colombia 49%
  • South & Central America 58%
  • World 67%
Credit card penetration
  • Colombia 15%
  • South & Central America 20%
  • World 19%
Internet penetration
  • Colombia 69%
  • South & Central America 73%
  • World 62%
Smartphone penetration
  • Colombia 74%
  • South & Central America 64%
  • World 70%

The E-Commerce Market

Top e-commerce segments

  1. Fashion: 33%
  2. Electronics & Media: 21%
  3. Furniture & Appliances: 19%
  4. Toys, Hobby & DIY: 19%
  5. Food & Personal Care: 8%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 14%
  2. Value of cross-border e-commerce – 1.4 bn $US
  3. Online shoppers who have shopped cross-border – 48%
B2C e-commerce growth 20->21
  • Colombia 40.5%
E-commerce % of total retail
  • Colombia 7%
  • South & Central America 11%
  • World 20%
E-commerce completed on a mobile device
  • Colombia 43%
  • South & Central America 44%
  • World 53%

E-Commerce Trends

  • E-commerce market size 9.8 bn $US
  • E-commerce spending per capita 191 $US
  • E-commerce spending as % of GDP 3.5%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
[{"label":"Visa","value":"42"},{"label":"Mastercard","value":"57"},{"label":"American Express","value":"1"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.

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