Best online Banks in Colombia
Like other Latin American countries, Colombia used to have a lot of people who didn’t have bank accounts.
The World Bank says that only about 55% of adults in Latin America have an account at a bank or credit union. People in rural areas also have fewer bank accounts than people in cities.
In Colombia, traditional banks offer expensive services that are mostly geared toward people with high incomes. Fees and costs for checking, savings, and loan services average 5–10% of the monthly minimum wage. So, this makes it hard for people with low incomes to use these services.
Traditionally, most people who don’t have bank accounts in Colombia and Latin America save and borrow money in the informal sector. So, this is riskier and more expensive.
But in 2020, a lot more Colombians opened their first bank account. This was because, as in many countries around the world, the government gave out billions of dollars in donations, due to the coronavirus lockdown.
The government’s Banca de Oportunidades program says that more than 31 million Colombians now have a bank account.
Subsequently, less fortunate Colombians could use financial products more, because of welfare payments and VAT rebates.
Best online banks in Colombia
Subsequently, nearly 86% of Colombians now have some kind of bank account, according to the government.
During the Corona Virus time, the government’s regulatory bodies also played a big role in the rise of digital payments and digital bank accounts. Colombia was one of the first Latin American countries to set up a regulatory sandbox for financial innovation. In short, the speed with which they made fintech regulations, is often praised.
With these flexible rules, fintech companies were able to promote new digital products and financial services and encourage even more people to open an account. Therefore, these great conditions have made a once-in-a-lifetime chance for new digital behaviors to take off.
During the pandemic, millions of people bought things online for the first time. So this time was adequate reason why people started using cards, wearables, and mobile devices that let you pay contactless. This includes Apple Pay, Samsung Pay, Google Pay, and other e-wallets that use QR codes or NFC, some of which are local.
In conclusion, let’s look at the most important and the best online banks in Colombia.
Best online Banks in Colombia
Banco Davivienda started DaviPlata more than ten years ago. Since a well-known traditional bank owns it, it is not a fintech company.
But this digital wallet is very important for the Colombian banking market and the economy as a whole because it helped millions of people start using mobile and digital payments.
With more than 12 million users, DaviPlata is the most popular and most used financial app in Colombia. It was and still is a way to include people in Colombia who didn’t have a bank account, especially those who lived in remote or rural areas and couldn’t get to a bank branch.
Even though DaviPlata doesn’t have physical debit or credit cards, it does have a virtual card that can be used online anywhere in the world, in-store at allied businesses, and online at national stores.
With the app, you can buy more minutes, shop, pay for services, get cash from Davivienda ATMs, and even send money to another cell phone. There are also ATMs and offices where you can get cash from Davivienda.
IRIS Dann Regional is a Colombian bank that focuses on corporate and consumer finance. In 2021, it opened IRIS, the country’s first 100% digital bank for small and medium-sized businesses.
The digital bank makes it easy for businesses to keep track of their money and make payments. Any device can be used by business owners and accountants to check on expenses, organize transactions, and cut costs.
The clients can also pay vendors and payroll, move money into and out of their IRIS accounts, get statements, set up automatic transactions, and do other things.
The company’s best product is a digital savings account that changes the interest rate based on how much money the company has in the bank. At the moment, companies with up to $500,000 in their IRIS account get 3% interest, and companies with more than $500,000 get 4% interest.
The other important financial product is the tailored credit line, which can be gotten after analyzing different payment sources like acquisitions, the assignment of contracts, CDTS, and IRIS control accounts.
The requirements to apply for business credit are:
- Minimum one year of operation
- Source of payment and/or a real guarantee
- Annual sales upwards of $5,000 million
In 2019, Lulo Bank was started, and in 2021, the app came out. The well-known Gilinski Group owns Lulo Bank, which is the first digital bank in the country.
The company made a standard online bank account. I don’t mean that in a bad way. The savings account has no monthly fees and is free to use at Servibanca ATMs and for transfers.
The free debit card gives users 0.5% cash back on all purchases, savings rates of up to 2.5%, and you can even get back 4X1000 every month for transactions up to $2,500,000.
The interest rate will be higher the longer you keep money in your account:
The rate is 1.25% from $0 to $525,000. EA
Between $525,001 to $1,000,000 is 1.50% EA
From $1,000,001 to $2,000,000, 2% EA
2.5% of $2,001,001 and up. EA
Digital banks pay a lot of attention to security. Because of this, Lulo Bank takes the following safety measures:
Notifications of every transaction and move Biometrics to keep your account safe
With Fogafin deposit insurance, your money is safe for up to 50 million pesos.
Last but not least, the bank makes it easy to apply for credit, with rates ranging from 1.15% MV to 14.70% EA and terms of up to 48 months.
Bancolombia, a large bank and the first Colombian company to trade on the New York Stock Exchange, started Nequi, a digital bank in Colombia, in 2016.
Nequi has had more than 12 million customers in the six years since it opened. This makes it one of the most popular banks in the country. They also plan to add 3 million more in a very short time.
It makes sense, since the app is easy to understand and use. With Redebán dataphones, Nequi QR codes, and Bancolombia QR codes, you can pay in tens of thousands of stores with just your cell phone.
Set up automatic goals for saving that will help you get what you really want. Also, get your money organized and put it under the Nequi Mattress.
Nequi lets both big and small businesses that sell in-store or online or through social networks start getting paid. You can get the money in your Nequi account the same day or in your Bancolombia account the next day.
Nequi can be charged in three ways:
- Nequi Button – Integration via APIs
QR Nequi – To get paid, print and show a QR code.
- Nequi Collections: Charge through a text message to the phone or in person with a QR code.
- You sign up for the one that suits you best, and then you can add the others.
Nubank is the world’s biggest digital bank and one of the biggest fintech companies overall. It was started in Brazil in 2013. Since then, the business has grown to include Mexico and Colombia.
There are more than 52 million users in these three markets as a whole. Most of them are in their home country, Brazil, and about two million are in Mexico and Colombia together.
David Vélez, who is from Colombia, is a co-founder and CEO of this digital bank. He is also the main force behind the success of this bank.
As we said in the review, “Nubank is doing all the right things to attract tens of millions of customers who were either disappointed with the big banks or were completely ignored and neglected.” If they keep going in this direction, there’s nothing that can stop them, and they’ll take over all of Latin America in the coming years.”
You get a free checking account and a Mastercard credit card that can be used anywhere in the world when you sign up for Nu. This is the best thing about Nu.
It’s important to note that the company’s entry into the country is still in the “beta” stage. So far, 5,000 customers have received the card, and another 50,000 will join in the next few months.
RappiPay is an online bank that was created by Rappi and the bank Banco Davivienda.
More than 800,000 people in Colombia already use RappiPay, and more than 200,000 have been given a card. It makes sense when you consider that the account is free and that you get a free debit card to use.
With RappiPay, you can send money for free to other banks in Colombia and get cash for free at Davivienda ATMs. If you add money to your Rappi account and cell phone and pay for your Transmilenio, SITP, and Mio trips without touching anyone, you can skip the line.
The popular RappiCard has a lifetime handling fee of $0, gives you 5% cash back when you buy trips from Rappi Travel, and gives you coupons and discounts at many stores like Samsung, Cyglo, YouTube, Frenchies, and more.
Tpaga is a digital bank and mobile wallet that was started in Bogota in 2015. It has services for both individuals and businesses.
People can use Tpaga to save money, send and receive money, invest, ask for credit, get a loan, and use it at more than 8,000 locations across the country. You can also put your money into FIC and cryptocurrencies.
The app has more than one million users in Colombia, which shows how popular it is there.
The company is growing and making its platform more accessible so that other companies can use it to run their e-wallets. With this open banking and fintech-as-a-service business model, the platform can be used in the ecosystem to its fullest potential.
Pierpaolo Barbieri, an entrepreneur and historian from Argentina, started Ualá in 2017. Since then, the fintech has grown quickly from Argentina to other countries, such as Colombia, where it offers a simple payment account and a prepaid Mastercard.
There are no monthly fees, no fees to open or keep an account, no fees to close an account, no fees to send money between Ualá users, no fees to add money, and no fees to take money out of ATMs anywhere in the world.
To get Ualá, all you have to do is:
- You can get the app from your phone’s Play Store or App Store.
- Use the information from the app to fill out the registration.
- You can get your Ualá debit card for free anywhere in Colombia.
- Use the app to turn on your card and save money when you use it.
With Ualá, you can easily handle your money from your cell phone, and there are no extra fees.
Benefits of online Banking in Colombia
Online banking is better than traditional banking in many ways. There are also some bad things about it. No matter what, we need to distinguish between digital banking, which is usually done by fintech companies, and the online or mobile banking that traditional banks offer to their customers.
Online banks that use fintech have no or low fees, especially for everyday banking. This is different from traditional banks, which charge monthly fees, transfer fees, and fees for every other essential banking service.
Traditional banks have a lot of costs in terms of office space and branch locations. They also have a lot more employees and expensive systems that have been around for a long time.
Digital banks don’t have any of that, so they don’t have to charge for their accounts and can offer much better interest rates on savings, which brings in more customers.
Interchange fees are the main way that digital banks make money. They don’t charge their customers for these fees; instead, they charge retailers and merchants.
So, customers don’t have to pay for transactions, and the bank still makes money from the small transaction fees that add up quickly. Because of this, many stores won’t take anything but cash.
Another good thing for customers is that sending money between people, but often also to other banks, is usually free and quick. Most of the time, foreign currency exchange rates for international transfers are fair and not meant to rip you off.
Summary – best online Banks in Colombia
In Colombia, there is a lot going on in the world of online banking. There are digital banks made by traditional banks that have been around for a long time, and there are also new apps made by fintech companies from inside and outside the country.
The recent pandemic may have been the most important factor in Latin America’s move toward digitization, speeding up the move to a payment system without cards, terminals, or physical branches.
The government agencies also played a big role by putting out quick regulations and a regulatory sandbox for fintech innovation. Because of this, there are now more than 320 fintech companies in Colombia. The number of fintech companies has grown by 37% since 2017.
Because of this, online banks and their apps are now popular and appealing products that have landed in a good place and that people in Colombia are eager to use.
But there is still a long way to go for digital banks in Colombia, as it will be hard to keep customers and get people to use them as their main bank account.
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