Fast payments and financial inclusion in Latin America and the Caribbean

Most countries in Latin America and the Caribbean are implementing fast payment systems (FPS), often with the goal of enhancing access to and use of affordable financial services. FPS offer immediate transfer of funds on a 24x7 basis between end users. This paper assesses how FPS can promote financial inclusion. We find that FPS go hand-in-hand with greater access to loans and savings in the financial system. The paper also discusses the current experience of countries across the region in FPS and related payment innovations, including central bank digital currencies (CBDCs). Finally, we discuss the key challenges in practice associated to cybersecurity risks and fraud, interoperability, end user and participant fees and universal access.

JEL classification: G23, L51, O16

Keywords: fast payments, fast payment systems, financial inclusion, interoperability, central bank digital currencies