The director of Ecuador’s Monetary Regulation Policy Board says the government may turn over its electronic money system to a private company.
“We are in talks with national and international financial companies about assuming management of the system,” says Patricio Rivera. “This has worked well in other countries and we believe it might be in the best interest of Ecuador too.”
Ecuador’s system, unveiled two years ago, has been a disappointment to the government which expected 500,000 users by now. To date, less than 60,000 have an account and most account holders use the system infrequently.
Bankers and financial analysts say there is a basic distrust by Ecuadorians of money they cannot hold in their hand. “It’s not a lack of technological sophistication, as some in the government say,” says Raul Serrano, a Guayaquil banker. “It’s mostly a result of the 1999-2000 financial crash, which the government was partly responsible for. People have distrust of the government and are afraid that their money could vanish again, this time into cyberspace.”
Rivera and others agree that the Central Bank, which currently operates the electronic money system, miscalculated public acceptance for the system. “This is why we are considering other options,” he said.
Serrano says that taking the system private might make sense. “People seem to have more trust in the private sector to take care of their money,” he says. “This is reflected in the trust they have in banks and credit cards. On the other hand, there’s still the question of whether people will think there’s really a need for it.”
Rivera did not say which companies he is talking to about assuming control of the system.