ECUADOR-CURRENCY Digital currency helps tackle bank account divide in Ecuador

Record ID: 150528

  • Title: ECUADOR-CURRENCY Digital currency helps tackle bank account divide in Ecuador
  • Date: 8th June 2015
  • Summary: QUITO, ECUADOR (JUNE 05, 2015) (REUTERS) ****WARNING CONTAINS FLASH PHOTOGRAPHY*** VARIOUS OF ELECTRONIC CURRENCY USER, PEDRO LEMA, MOVING TOWARDS SUPERMARKET CHECKOUT LEMA PAYING FOR GOODS USING HIS MOBILE PHONE MESSAGE ON MOBILE PHONE SCREEN READING (IN SPANISH): "YOUR TRANSACTION IS BEING PROCESSED" LEMA SIGNING RECEIPT LEMA WALKING AWAY (SOUNDBITE) (Spanish) ELECTRONI
  • Embargoed: 23rd June 2015 13:00
  • Keywords:
  • Location: Ecuador
  • Country: Ecuador
  • Topics: General
  • Reuters ID: LVA1NXU22XA7TVW13LW2TM3AVSM0
  • Aspect Ratio: 16:9
  • Story Text: Since Ecuador's electronic payment system entered into national circulation in February, approximately 24,000 accounts have been opened among a population of just over 16 million, official figures from May showed.
    The system, which entered into circulation with government support, allows Ecuadorians to make payments through mobile telephones, and does not require a bank account.
    According to official data, the electronic payment system is generally used for small amounts, and so far just 24,000 U.S. dollars have been transacted during the four months it has been available.
    "I avoid carrying around coins, it is one direct payment which I can do in a pharmacy, in a taxi, even for payments under a dollar, it has been useful for this," said Quito resident, Pedro Lema.
    Though its use has not been widespread, Banco Central Manager General, Mateo Villalba, explains that the system has helped those without bank accounts, previously excluded from using financial institutions.
    "40 percent of the population which is economically active does not have a bank account. Now they will be able to use banks, they will no longer be excluded from banking services, they will be able to use banks to load money onto or download money from their mobile phones to convert it into cash. It is a method which will democratise access to financial systems for poor and excluded people, the 40 percent who do not have a bank account," Villalba told Reuters.
    According to official statistics, whilst just under half the population does not own a bank account, almost all Ecuadorians own a mobile phone.
    During the first three months of circulation, 70 banking institutions incorporated the electronic payment system into their services. The government encourages all institutions to adopt the system in order to widen access to it as a public service.
    Just as adopting the system is optional for institutions, Villalba stresses that citizens cannot be forced to use it.
    "The financial institutions should offer this service to all citizens that request it, however, the use of electronic money is completely optional and voluntary for all citizens. No bank or financial institution will be able to convert a citizen's bank balance or the cash brought into the bank into electronic money without being asked to do so by the owner of said money, whether by transfer or in cash," said Villalba.
    For many Ecuadorians such as supermarket worker, Dany Ochoa, the system has helped them go about their business.
    "It is another way of paying. It is very beneficial for us because it is another way to buy and earn money for our business," said Ochoa.
    Others remain concerned about the security of their money as developments in technology also lead to developments in crime.
    The system uses the U.S. dollar which has been the circulating currency in Ecuador since 2000.
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