December 2020
Source: https://www.bis.org/publ/qtrpdf/r_qt2012f.pdf
Retail payment services in Latin America and the Caribbean are characterised by high costs and insufficient access for large swathes of the region’s population. To overcome these limitations, some of the larger central banks in the region have taken the lead to introduce fast retail payments and develop an open banking ecosystem. Several others have launched central bank digital currency pilots. The shift to digital payments, which is supported by these policy initiatives, is likely to receive further impetus from the Covid-19 pandemic.
Key takeaways
• Limited access to retail payment services and their high costs are significant challenges in Latin America and the Caribbean.
• Central banks in the region have undertaken major initiatives aimed at promoting more efficient and inclusive payment systems.
• The Covid-19 pandemic should reinforce the momentum of these policy initiatives, as it has accelerated the shift to digital payments and underscored the need for more inclusive and lower-cost payments.
Current Retail Payment Technology: QR Code and NFC
CoDi in Mexico and Pix in Brazil are fast retail payment systems (FRPS) that allow users to execute and finalise payments
in real time and are available 24 hours a day, every day of the year, through a platform operated by the respective central banks.
CoDi and Pix share many common features but also present some differences (Table 1). From the viewpoint of final users, coverage is identical. Both are available virtually to all transaction account holders for sending payments.
However, some participating institutions cannot receive payments within CoDi. By contrast, in Pix it is compulsory for all participating PSPs to provide their customers with all the functionalities for initiating and receiving instant payments in their mobile applications. As for access channels, both systems allow payments through mobile devices when a quick response (QR) code is scanned or by using near field communication (NFC) technology.