IDB joins partnership to advance digital payments

Membership in the Alliance will contribute to further the IDB’s efforts to promote the financial inclusion of low-income people in Latin America and the Caribbean (LAC), with the aim of improving their economic security and enabling them to increase savings and assets by harnessing innovative payment technologies.

The new partnership will promote knowledge sharing and the development of digital payments ecosystems, by bringing together key public and private sector actors. These efforts will expand the access and use of quality and affordable financial products for previously excluded and underserved populations, and safeguard the stability of the financial system.

The IDB has worked with a number of countries throughout the region to help them transition to digital payments for government transfers to low-income families. In addition, the Bank has encouraged governments to use new technologies, such as tablets and ATM machines, to provide financial education and simplify bill-paying for consumers who previously did not have access to banking services. Such policies not only promote financial inclusion but result in cost savings and greater efficiency for governments.

The Multilateral Investment Fund (MIF), member of the IDB Group, through its Technology for Financial Inclusion Programme, TEC-IN, has partnered with more than 15 institutions in the region to develop business models—including the use of mobile technology and the development of merchant networks—to expand the access to payments, savings, and microcredit services, which for some individuals represent a first-time experience.

MIF’s partnership with a major telecommunication company in Paraguayhas allowed more than a million Paraguayans – over a quarter of the country’s adult population – to use their mobile phones to make person-to-person money transfers and pay for services. Through a country-wide network of merchants, they can also access cash and make deposits in a more efficient and secure manner.