The APMs in Colombia: Alternative Payment Methods in a Digitally Evolving Economy

Introduction

Colombia’s payments ecosystem is experiencing rapid digital transformation, fueled by high smartphone adoption, fintech innovation, and government-backed instant payment systems. Traditionally, cash and cards dominated transactions, but over the past decade, alternative payment methods (APMs) — including mobile wallets, QR payments, instant transfers, and Buy Now, Pay Later (BNPL) solutions — have gained significant traction.

The Colombian government and the Central Bank of Colombia (Banco de la República) have actively supported digital payments through initiatives such as PSE (Pagos Seguros en Línea) and QR interoperability programs. This has created a hybrid ecosystem, combining bank-led solutions, fintech wallets, and instant payment rails.

This article provides a comprehensive analysis of Colombia’s APM landscape, including market statistics, consumer behaviour, regulatory frameworks, key players, challenges, and its impact on regional fintech.

1. Colombia’s Digital Payments Landscape: Market Foundations

Economic and Digital Infrastructure Context

• Population: ~51 million
• Internet penetration: ~75–77%
• Smartphone penetration: ~80%
• Bank account ownership: ~67% of adults
• Urbanisation: ~80%

Colombia’s urban population, rising middle class, and mobile-first behaviour provide a fertile ground for rapid adoption of APMs, particularly in e-commerce, retail, and SME payments.

Payment Market Size and Growth

• Annual digital payment transaction value exceeds USD 90–100 billion
• Cash still dominates small-ticket transactions, especially in rural areas
• Mobile wallets, QR payments, and instant transfers now account for 30–35% of non-cash transactions
• Key growth drivers include:
  • E-commerce and online marketplaces
  • Government-backed instant payment initiatives (PSE)
  • Fintech wallets and BNPL platforms
  • SME digitisation

Colombia has positioned itself as a rapidly digitizing LATAM market, with both fintech and bank-led solutions driving adoption.

2. Understanding Alternative Payment Methods (APMs) in Colombia

APMs in Colombia include:

• Mobile wallets and super-apps
• QR code payments
• Account-to-account (A2A) transfers
• Prepaid and stored-value cards
• BNPL / installment platforms
• Government-backed instant payments (e.g., PSE, QR initiatives)

Colombia’s APM ecosystem is bank-integrated and fintech-driven, emphasizing interoperability, instant settlements, and convenience.

3. APM Adoption Trends and Consumer Behaviour

E-commerce Payments

• APMs account for 35–40% of online transactions, including wallets, QR payments, and BNPL
• Cards remain dominant for high-value and cross-border purchases
• BNPL adoption is growing, particularly among urban Millennials and Gen Z

Offline & Retail Payments

• QR payments widely accepted in supermarkets, convenience stores, pharmacies, and small retailers
• Mobile wallets increasingly used for urban retail, transit, and micro-payments
• Cash remains prevalent in rural areas, but adoption is growing due to digital incentives and fintech solutions

Demographic Insights

• Urban Millennials & Gen Z: Mobile wallets, QR, BNPL
• Middle-aged urban consumers: Cards + bank-linked wallets
• Rural population: Cash-heavy, gradually adopting wallets and QR
• SMEs: Increasing use of digital payments for efficiency and transaction tracking

4. Key APM Categories and Leading Players in Colombia

1) Mobile Wallets & Super-App Payments

• Nequi – Fintech wallet by Bancolombia, used for P2P, retail, and online payments
• Daviplata – Bank-linked wallet by Davivienda, widely adopted for urban micro-payments
• Movii – Independent fintech wallet offering prepaid, QR, and e-commerce payments
• Mercado Pago Colombia – Integrated with Mercado Libre, e-commerce, and retail

2) QR Code Payment Systems

• Nequi QR & Daviplata QR – Fintech-led and bank-integrated, widely accepted in micro-retail
• Mercado Pago QR – Popular among small and medium-sized merchants
• Bank QR codes – Bancolombia, Davivienda QR for retail and urban merchants

QR payments are particularly effective for small-ticket and daily transactions, bridging offline and online commerce.

3) Account-to-Account (A2A) Transfers

• PSE (Pagos Seguros en Línea) – Government-backed interbank instant transfers
• Bank apps enable real-time P2P and merchant payments
• Widely used for bills, salaries, and online purchases

4) Prepaid & Stored-Value Solutions

• Prepaid cards are used for students, teens, and underbanked populations
• Linked to wallets for retail, transit, and e-commerce micro-payments

5) Buy Now, Pay Later (BNPL)

• Providers: Kueski Pay Colombia, Mercado Crédito, RappiPay cuotas
• BNPL is popular among urban e-commerce shoppers and Millennials
• Enables installment payments for lifestyle, electronics, and online purchases

5. Regulatory and Policy Framework

• Superintendencia Financiera de Colombia (SFC) regulates fintech wallets, QR systems, and e-money
• Licensing required for wallet and e-money providers
• Strong AML/KYC compliance
• Government promotes interoperability through PSE and QR payment initiatives
• Open banking initiatives encourage bank-fintech collaboration for seamless digital payments

6. Drivers Behind APM Growth in Colombia

1. Government-backed infrastructure – PSE and QR interoperability
2. Fintech innovation – Wallets and super-apps increase convenience
3. E-commerce expansion – Urban online shopping drives wallet adoption
4. SME digitisation – Reduces cash handling, improves transaction tracking
5. Consumer convenience – Mobile-first, instant, and cost-effective payments

Comprehensive List of Alternative Payment Methods (APMs) in Colombia

1️⃣ Bank-Led Wallets

• Nequi
• Daviplata
• Bancolombia Wallet
• Davivienda Wallet

2️⃣ Non-Bank Wallets / Super-App Payments

• Movii
• Mercado Pago Colombia
• RappiPay Wallet

3️⃣ QR Payment Systems

• Nequi QR
• Daviplata QR
• Mercado Pago QR
• Bancolombia QR

4️⃣ Account-to-Account Payments

• PSE instant transfers
• Bank mobile P2P transfers

5️⃣ BNPL & Installments

• Kueski Pay Colombia
• Mercado Crédito
• RappiPay cuotas

APM Comparison Table

7. Challenges and Constraints

• Fragmented wallet ecosystem creates merchant onboarding complexity
• Cash remains dominant in rural and smaller towns
• BNPL adoption still maturing and requires strong credit assessment
• Regulatory compliance requires ongoing monitoring and adaptation
• Competition between fintechs and banks intensifies, requiring constant innovation

8. Colombia’s Impact on Regional Fintech and Payments

• PSE provides a benchmark for instant payments in LATAM
• Wallet adoption demonstrates financial inclusion in urban centers
• BNPL and QR adoption influence regional e-commerce and micro-retail strategies
• Colombia’s fintech ecosystem attracts regional investment and innovation partnerships

9. Future Outlook and Projections

Over the next 3–5 years:

• Mobile wallets, QR payments, and instant transfers expected to exceed 50% of urban non-cash transactions
• BNPL adoption to expand with e-commerce and urban retail
• Government-backed QR and instant payment initiatives will deepen financial inclusion and cross-platform interoperability
• Colombia is poised to become a LATAM fintech and APM leader alongside Brazil and Mexico

Conclusion

Colombia’s APM ecosystem demonstrates how fintech innovation, government-backed infrastructure, and mobile-first adoption can drive digital payments. Mobile wallets, QR codes, instant transfers, and BNPL solutions are transforming retail, e-commerce, and SME payments, positioning Colombia as a rapidly digitizing and highly adoptable LATAM market for alternative payment methods.

The combination of regulatory support, fintech leadership, and urban mobile adoption makes Colombia a blueprint for other emerging LATAM economies seeking sustainable cashless growth.