Ideas & Updates

Colombia’s Ingreso Solidario: Public-private Collaboration In Covid-19 Emergency Payments Response

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The Government of Colombia’s experience in fostering public-private collaboration is an inspiring example of how digital payments can be rapidly dispersed across multiple channels, taking a user-centric approach.

In response to COVID-19, the Government of Colombia introduced a comprehensive social protection strategy to protect vulnerable populations from economic shocks caused by the pandemic. The strategy built upon several existing social protection programs, including Familias en Acción, Jóvenes en Acción, Colombia Mayor, the fast-tracking of a VAT refund for low-income families, and the introduction of Ingreso Solidario (IS). Ingreso Solidario is a new, unconditional emergency transfer program benefitting nearly 3 million households, of which 63 percent are headed by women, and a third are first-time users of mobile money accounts.

Public-private collaboration enabled the Colombian government to reach beneficiaries through a multiplicity of channels and in record time. Colombia confirmed its first case of COVID-19 on 6 March 2020. The first Ingreso Solidario transfer payment occurred on 6 April – only four weeks after the first case. The Government transfers US$43 per household per month for a period of three months, and has extended the scheme until December 2022.

The rapid design and implementation of this cash transfer program was possible due to a long-standing commitment to enabling regulations, a flourishing fintech ecosystem, and widespread adoption of mobile wallets. Alongside a consolidated registry for social beneficiaries and a national ID, the IS program was able to effectively mobilize the Colombian government’s response to COVID-19.


  • Enabling regulations: Since 2007, the Government of Colombia has mandated G2P payments to beneficiaries’ accounts.
  • Infrastructure to boost digital transactions: In 2015, regulatory changes enabled the authorization of e-money issuers. In 2020, Colombia developed low value payments infrastructure and (originating in late 2019) utilized faster payments via an automated clearing house (ACH). In addition, the country has a very strong last-mile agent network, reaching isolated and remote communities. In the past decade, internet access and smart phone penetration has increased to 72 percent and 1.29 mobile lines per inhabitant, respectively.
  • Fintech ecosystem: Colombia has one of the largest fintech ecosystems in the region, after Brazil and Mexico.
  • Mobile wallet adoption: While the development of mobile wallets has been bank-led, the Government has paved the way for adoption among beneficiaries of social transfers, as some conditional cash transfer (CCT) programs have been paid via mobile wallets.

The design and implementation of IS fostered innovation both in social policy design and in the government-to-person (G2P) payments process. The program increased transparency, promoted the digitization of G2P payments, and reduced operational and disbursement costs. The Government of Colombia made payments directly into the accounts of 1.2 million beneficiaries who were already banked, and implemented a strategy to financially include and disburse funds via various digital payments channels to over 1.7 million beneficiaries who were previously unbanked. This boost in uptake of digital financial products made it possible to analyze beneficiaries’ wallet usage, patterns in cash withdrawal, and wider statistics to identify new payment behaviors emerging from the pandemic.

Key Findings

  • Collaboration between the public and private sectors was key to building trust among stakeholders
    In a race against time, and born out of a co-creation exercise between the public and private sectors, the Department of Social Prosperity (DPS) identified three million initial beneficiaries of IS. Significant effort went into creating this registry, which began with the Social Beneficiary National Registry, followed by cross-referencing several national databases and working with credit bureaus and banks to further strengthen the registry. While the DPS consolidated the registry, the Ministry of Finance designed the payments strategy with the support of the Better Than Cash Alliance.

    To build trust among institutions and create a coopetition environment, the Government, financial service providers (FSPs) and telecommunications companies (TELCOs) participated in a virtual situation room to co-create the solutions. Traditional competitors collaborated, sharing good practices to mitigate risks during beneficiaries’ identification and on-boarding process.

    The main challenge was disbursing funds to beneficiaries who did not appear to have an account in the financial system. This was achieved in several stages, requiring the constant adjustment of processes in collaboration with six financial service providers and fintechs. As of April 2021, of the total 3 million beneficiaries, 2.4 million were paid by financial institutions, of which 75 percent were through mobile wallets and 0.6 million through cash over the counter (OTC) by postal payment service provider (PSP).

  • The pandemic turbocharged account opening and gave a major boost to fintech
    COVID-19 generated many changes in the financial sector and boosted the digitization of its operations, given the high demand for digital transactions to help overcome the lockdowns. In one year, the number of mobile wallets in the country almost doubled, from 11.5 million in March 2020 to 22.4 million in March 2021.

Number of beneficiaries paid through mobile wallets
(June 2020 - April 2021)

  • Deepening the understanding of new consumer segments through data analysis allows for more tailored future products
    Financial service providers were able to deepen their knowledge of a new market segment, with IS beneficiaries as new clients. This includes developing better functionalities for their digital wallets and solving challenges arising from grievance redressal and customer support for a previously unknown client profile. Analysis of the transaction data has also enabled financial service providers to learn more about the needs of their clients to further enhance and tailor the value offer. An analysis of the behavior of newly financially included beneficiaries illustrates how new customers make use of digital payment functionalities that are offered - if these functionalities are easy and simple to use. For example, when comparing those beneficiaries who received the transfer via traditional bank account versus those who received it via mobile wallets, the latter cashed out 10 percent less, and 22 percent of the mobile wallet holders practiced saving.

  • Value-added services (VAS) led to increased transactions
    The digital product value proposition has led IS beneficiaries to take advantage of different use cases to suit their needs. For example, while 71 percent of beneficiaries, on average, withdraw funds monthly, 96 percent take more than 90 percent of the available balance. Twenty-eight percent of beneficiaries do not withdraw monthly, and manage their funds digitally in a variety of ways. Beneficiaries who have access to basic wallets, but no other VAS or product offerings, make one withdrawal transaction per month on average. Meanwhile, with wallets that offer other VAS such as peer to peer (P2P), merchant payments (P2B), and utility payments, the frequency increases to two or three transactions per month. This suggests that beneficiaries value digital products as stored value and not just as a closed loop payment instrument. The transaction most used by beneficiaries is P2P transfers, with an average 26 percent of beneficiaries performing three or more transfers per month.

    One of the most interesting behavioral changes observed is the increase in P2P transfers and P2B purchases, notably between April 2020 and April 2021. The most popular transactions are intra-bank transfers, used by 23 percent of beneficiaries. Between February and April 2021, 26 percent of the beneficiaries made three or more transfers in a month.

  • Interoperability is key for digital payments to achieve more affordability and utility than cash
    Silos prevent users from transacting freely or affordably across providers. For underserved populations, binding socio-economic constraints make this a particularly untenable prospect. For such users, the direct costs of surcharges on cross-provider transactions are galling. The Colombian experience clearly illustrates the importance of interoperability, as it improves the value offer for beneficiaries. Complemented by an ecosystem that strengthens the digital payment acceptance network – either through Point-of-Sale capillarity in the case of card-based products, or greater availability of shops with QR codes and facilities, to engagement in e-commerce – the foundations have been laid to reduce the demand for cash. Regarding the varied use of channels, beneficiaries’ use of ATMs decreased over time in favor of agents, despite ATMs being cheaper for IS recipients.

The COVID-19 crisis introduced tens of millions of people worldwide to digital payments. The evidence from Colombia reveals a prime opportunity to build on this momentum to deepen digital financial inclusion that is gender intentional. A priority should be to reach women and to overcome distrust in digital payments by ensuring sufficient safeguards and grievance mechanisms are established and accessible, so that payment transactions are transparent and the financial ecosystem as a whole is responsible, as highlighted by the UN Principles for Responsible Digital Payments.