Camilo Tellez-Merchan, Head of Digital Payments Innovation Hub, Better Than Cash Alliance, United Nations Capital Development Fund (UNCDF), and Gisela Davico, the Latin America & Caribbean Lead and Global Gender Lead, Better Than Cash Alliance have shared key insights that have released in a blog post by the World Economic Forum (WEF).
According to the update shared by the WEF, Colombia’s digital inclusion strategy is bolstering financial inclusion.
As noted in a blog post form the WEF, governments around the world are leaning into digital technologies “to upgrade services and connect communities.”
In Colombia, for example, a large-scale digitalization project is underway, and it aims to accelerate financial inclusion — especially “for women and the most remote communities.”
The WEF blog further noted that interoperable digital payments are a “critical part of this project, and Colombia’s success could be a model for other countries to follow.”
Over the last decade, and particularly in response to the COVID-19 pandemic, governments worldwide “have been leveraging technology to improve the provision of public services, foster financial inclusion and drive economic growth.”
WEF’s blog also mentioned that the digital systems that allow institutions to “provide vital public services to citizens — from digital disbursement of social benefits to scheduling appointments at the nearest clinic — are known as Digital Public Infrastructure (DPI).”
In the most recent OECD Digital Government Index, Colombia ranks highly “alongside countries such as Korea, Denmark, the United Kingdom and Norway.”
Colombia has recently undertaken “a collaborative effort of multiple government agencies to advance the development of a robust digital ecosystem that streamlines operations, generates trust in the procedures and services of public and private entities and that will drive the country’s digital economy in the coming years.”
The WEF blog further revealed that this Colombian project is “using nature to tackle drought.”
The Centre for Public Digital Infrastructure has identified the three key components of DPI essential “to build digital economies” to support the 17 Sustainable Development Goals of the United Nations:
1) Interoperable digital payments.
2) Digital identity systems.
3) The ability to share data between institutions.
A case study of Colombia’s efforts in these areas “provides a potential model for other countries in the region and even further afield to emulate.”
Following the best practices of other successful instant payment systems like Pix in Brazil or UPI (Unified Payments Interface) in India, Colombia is developing “a new low-value interoperable fast payment system (FPS) that will launch in May 2025.”
Banco de la República, Colombia’s central bank, is leading this effort in close collaboration “with the private sector, emphasizing co-creation, interoperability, efficiency, inclusion and innovation to reach the last mile.”
The FPS, which will operate under the name “Bre-B”, will allow real-time digital payments 24 hours a day, seven days a week, enhancing financial transactions and “driving digital financial inclusion throughout the country.”
It will significantly “benefit women and the most remote communities, as mobile banking accounts helps women to accumulate savings and increases their ability to cope with shocks.”
To ensure a comprehensive and inclusive approach, Banco de la República established a Payment Systems Forum, “inviting a wide range of stakeholders, including financial regulators, banks, fintech companies and electronic money issuers.”
This platform facilitated valuable debates and knowledge exchanges, fostering “a collaborative environment where stakeholders could contribute their knowledge and experience.”
They co-designed the operating rules and model, “agreed on the technical requirements, and built consensus about clearing and settlements.”
In addition, the Better Than Cash Alliance, “based at the UN, provided technical assistance and facilitated knowledge exchange with instant payment operators in other countries to ensure Colombia’s DPI strategy incorporates best practices and lessons learned from other systems.”
When the interoperable payment system is fully implemented, a significant move toward digital payments “is anticipated over the next 15 years; the typical period for such systems to reach maturity.”
The expansion of cross-border payment offerings will be analyzed as the next step, further integrating Colombia into the global digital economy and facilitating international transactions.