‘Bimo’ will replace electronic money

Ecuadornews:

The Association of Private Banks will present a mobile wallet, the digital means of payment with which the Central Bank system will disappear. In February, private banks will bring to the market the financial product with which they will replace (and put an end to) electronic money managed by the Central Bank of Ecuador.

It will be called ‘Bimo’. It is a mobile wallet that can be operated from a cell phone and will provide greater facilities to open bank accounts. The service aims to increase the level of banking penetration, especially reaching users in areas where there are no nearby financial institutions. It was announced yesterday by Julio José Prado, executive director of the Association of Private Banks of Ecuador (Asobanca), in an interview on Ecuador TV, where he said that the product will operate, at the latest, within a month and a half.

With ‘Bimo’ users will have a credit history that will later allow them to access credits. “The account now is going to be much simpler to create. It will not have the same requirements as traditional accounts, even the person will not have to approach the bank. ” He clarified that the tariffs for services and other securities are to be defined with the Superintendency of Banks and the Central Bank. According to the central bank figures, around 40% of people have a bank account. Electronic money appeared in 2014 with the approval of the Monetary and Financial Code, which establishes the exclusive management of the system by the Central Bank.

Since then it has been subject to multiple criticisms. Opposition sectors accused the Central of creating a public monopoly and without endorsement of the resources. They warned about dollarization risks in view of the supposed creation of a parallel currency because, in their eyes, there was a possibility that the institution would make inorganic issues.

The rejection led the Government to include in the Economic Reactivation Law the disappearance of the central bank platform, to be replaced by electronic means of payment provided by the national financial system (public, private banking and cooperatives).

According to the norm, effective from January 1, the transition must be completed in 90 days. The private bank created its own system and now expects the Superintendency to process, within a month, regulatory aspects to allow its operation. The technology that the Central has will be assumed by the cooperatives. Édgar Peñaherrera, manager of the Ecuadorian Integration Network of Savings and Credit Cooperatives (Icored), told newspaper EL TELÉGRAFO that three large institutions were connected to the platform and will launch a pilot program.

At the moment, technical adjustments are being made to make the tool more user-friendly, said Peñaherrera. He did not specify when they would begin to provide the service

Alternatives to close the accounts in the Central bank

That the electronic money is eliminated does not mean that the current users will lose their accounts and the resources they have in them. Until December 31 of last year there were 409,999, according to the report of the Central. When it started in 2014, 4,443 were registered (see infographic). Users have three alternatives to manage their resources, reported this week Verónica Artola, manager of the central bank.

In the course of the transition they will be able to spend the money in the 137 authorized premises in the country or make transfers to the account of a bank or cooperative of their choice. Finally, download the funds at the ATMs of the International and Pacific banks. Currently with electronic money you can make transactions in 11 banks and 57 cooperatives. If the 90 days are still active, the entity will analyze the possibility of extending the term. “In no case and no reason the Central Bank will keep the resources,” said the official

The figures 

Transactions in 2017 

A total of 42,945 natural persons made transactions with electronic money in December 2017. Throughout that year, 7,067 establishments in the country made transactions with the means of payment. 9 million dollars, approximately, is the final balance in the accounts as of December 31.

VAT refund 

The use of digital media generated $ 2.9 million in VAT refunds between January and December last year. (I)

Source: http://www.eltelegrafo.com.ec/noticias/economia/1/bimo-reemplazara-al-dinero-electronico