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Regulatory Requirements for Payment Processors in Colombia: Understanding the Landscape

Introduction

The low-value payment system in Colombia is governed by Decree 1692 of 2020, which amended Decree 2555 of 2010. The primary objective of this decree is to promote financial inclusion and facilitate access to the low-value payment system and its associated services.

Key Players: Payment System Administrator, Acquirers, and Aggregators

The regulatory framework identifies three key players that facilitate access to the low-value payment system:

Payment System Administrator

The payment system administrator is responsible for overseeing the operation of the low-value payment system. Despite a reduction in its activities under Decree 1692 of 2020, this entity remains critical in:

• Admitting participants to the payment system
• Allowing system operations through functions such as netting and settlement
• Processing and supplying technology for access
• Acting as payment service providers for acquirers and issuers

The payment system administrator is subject to surveillance and control by the Colombian Finance Superintendence, requiring authorization and licensing to operate in Colombia.

Acquirers

Decree 1692 of 2020 established that credit institutions, companies specialized in electronic deposits and payments (SEDPES), and certain non-supervised entities can develop acquiring activities. Acquirers must meet specific requirements and register with the Colombian Finance Superintendence.

The acquiring process is limited to:

• Engaging merchants in the low-value payment system
• Providing access technologies to merchants for payment instruments
• Processing payment orders and fund transfers
• Paying merchants or aggregators the resources from sales made through access technologies

Payment Aggregators

Decree 1692 defines a payment aggregator as an acquirer’s payment service provider that connects merchants to the low-value payment system, provides access technologies, and collects funds on behalf of merchants.

Unlike other players in the payment ecosystem, payment aggregators are not required to obtain a license from the Colombian Finance Superintendence. However, they must meet specific requirements to be admitted into the low-value payment system.

Conclusion

Understanding the regulatory framework governing the low-value payment system in Colombia is crucial for institutional or corporate actors involved in this sector. Knowledge of these regulations and requirements can help ensure compliance with relevant laws and facilitate access to the payment system for merchants, consumers, and other stakeholders.