QUITO._ Ecuador has introduced a digital currency system that allows its citizens to perform countless monetary transactions from their cell phones, in an initiative likely to become a major tool for social inclusion, according to Ecuadorian authorities.
Users, who are not required to have a bank account, can access the system from any kind of cell phone, ensuring accessibility in a country with some 15 million inhabitants and 17 million active mobile lines.
Mateo Villalba, general manager of the Central Bank, said another advantage is that most transactions are free while those charged have low operating costs in comparison to current tariffs charged by private banks.
With the digital currency, individuals and legal entities can make payments, transfers and purchases and can send local money orders through electronic text messaging from any cell phone.
In the last quarter of 2014, Ecuadorian authorities undertook a pilot experiment which demonstrated that the resource was working efficiently. The main difficulties were related to people learning how to perform functions. Consequently, said Villalba, it was agreed to implement the program in stages, to enable users to become familiar with it.
The first stage, which started last December 24, is intended to encourage citizents to voluntarily open their free of charge e-money accounts.
The second phase will start in February, when users will be able to make their first transactions, with new services coming on-line in the second semester of 2015. According to estimates, about 500,000 citizens are expected to join the system in 2015, the general manager said.
Reducing operating costs and avoiding the risks associated with carrying large amounts of money are among the new system’s advantages for users, while allowing the financial system to reduce the movement of funds, the use of armored vehicles and the issue of credit cards.
The three cell phone providers working in Ecuador have already signed operating agreements with the Central Bank: Claro (which holds 67 percent of the market), Movistar (30 percent) and the public Corporación Nacional de Telecomunicaciones (National Telecommunications Corporation).Share on FB Share on TT