Neobanks revolutionize the Costa Rican financial system

Friday, August 6, 2021

Neobanks revolutionize the Costa Rican financial system

With a disruptive proposal, 100% digital banks changed the concept of banking in our country, without physical branches and with quick procedures from a mobile device.

With a disruptive proposal, 100% digital banks changed the concept of banking in our country, without physical branches and with quick procedures from a mobile device.

In 2018, Costa Rica saw the emergence of what would be the first neobank that revolutionized the traditional financial system, allowing users to open a savings account without lines or paperwork through a mobile phone and just needing an identification .

"Nothing is permanent except for change," wrote Heraclitus, a premise that is gaining strength with consumers who demand simple, fast and transparent solutions.

The neobank gained strength in the context of a pandemic, by becoming an alternative for those who are not satisfied with traditional services and needed to have more control of their money, outside of tedious and lengthy procedures.                  

In the case of banks, their confidence lies in the physical strength of their walls; however, technology changed that landscape for ease of use and experience.

The latest data from the Central Bank of Costa Rica show that 78% of the population has at least one bank account.

Neobanks impact the Costa Rican market

Wink was the first startup to offer a 100% digital banking product when it made a debit card available for free, sent to your home, and without annuities or memberships. In addition, from its app, people can pay, save and budget in colones and dollars with the support of a financial institution such as Coopenae .

Wink is available to Costa Rican citizens over 18 years of age or foreigners with Dimex, in both cases with a work or residential address in Costa Rica.

At the beginning of 2020, the Omni company joins as a neobank transforming its initial application into a financial option , which allows paying in physical or online stores, as well as having a digital wallet and a MasterCard debit card.

Another valuable example is the company Pei, a financial services mobile application that allows you to transfer dollars or colones from all your accounts in a single app, no matter which bank the person uses.

Pei stands out for its level of security by making use of the latest technology, user information is encrypted to protect it by validating their identity through biometric technologies, facial recognition and artificial intelligence.

Provides an attractive user experience allows them to schedule reminders to pay their services on time, transfer and request money from one place.

This platform was created from its initial architecture by the Antit company that specializes in App development.

Also, experts in the implementation of financial development solutions such as payment gateways, digital wallets, bank portals, KYC, AML and more.

Improve financial inclusion

The neobank make available a series of attractions for any user such as: receiving intelligent reports of the movement of your accounts, savings envelopes, transfers between users, SINPE in real time, public service payments and even withdrawals at ATMs.

In addition, it offers clarity in the cost of commissions, control of financial movements in real time, as well as ease in opening and requesting products.

On the other hand, by not having physical infrastructure, operational costs are lower, so they can offer lower prices than other intermediaries, with simple, secure and 100% digital solutions .

Costa Rican market overview

It was until 2018 that SUGEF opened the possibility for Fintech companies to register under article 15 of Law 7798.

Once registered, they can choose to join SINPE (National Electronic Payment System), with access to this system administered by the Central Bank. With this, the revolution in the payment means market started in the country with startups that provide comfort, versatility, mobility and security.

However, the Organization for Economic Cooperation and Development (OECD) in its study on the 2020 economy, recommends that Costa Rica facilitate direct and full access to the electronic payment system.

This is the main current regulatory barriers facing the Fintech in accordance with the conclusions reached by the entity.

He considered that the country should improve the dialogue between regulatory institutions and FinTech as a tool to activate the economy despite the pandemic.

Melissa López
August 6, 2021