Beginning March 31, Ecuador residents will be able to make cash transactions through the country’s new digital wallet, or electronic money system. The system, which will be administered by private banks and financial cooperatives, replaces a similar program established in 2014 by the government that operated through Ecuador’s Central Bank (BCE).
Users of the new system will be able to make commercial transactions, such as purchasing groceries, paying taxi fare or adding cellular minutes through their cell phones. They will also be able to pay utility bills, taxes, government fees or traffic fines.
Although the new system will operate through banks and coops, it does not require users to have have a checking for savings account. Once an account is established, the system operates entirely by phone and works with “first generation” cell phones as well as smart phones.
The system will be available to foreign residents as well as citizens.
According to BCE, the 2014 electronic money system is being phased out. “That program never caught on with the public and today has less than 200,000 accounts,” says BCE president Verónica Artola. It suffered from poor planning, she says, as well as a general distrust of being operated by the government. “When it was announced, the government predicted the system would have two million active users today, which obviously didn’t happen,” she says.
Details of the new system are still being worked out, according Artola, including transactions fees. “These will be very small, based on discussions with the banks,” she says. “One of the original intentions of the program was to provide financial services to the part of the population that does not have traditional banks accounts, and this will continue to be a main objective.”
Artola says that the system being established in Ecuador already exists in much of the world. “Ours will be based on similar programs in Europe, Africa and Asia. It has been proven efficient and very secure.”
She adds: “Those who use the system will be amazed at how simple it is to use. Once you set up an account, all you have to remember is *153#. The entire system operates from that code.”
She added that BCE and private banks will launch an information campaign about the new system beginning in March.