Bank for International Settlements paper links fast payment systems to higher formal borrowing and saving in Latin America and the Caribbean

The Bank for International Settlements has published BIS Papers No 153 assessing how fast payment systems (FPS) can promote financial inclusion in Latin America and the Caribbean, alongside a review of the region’s experience with FPS and related payment innovations including central bank digital currencies. Using World Bank Global Findex data for 148 countries over 2011–21, the paper finds that FPS availability is associated with wider use of formal financial services beyond payments, particularly a 3.9 percentage point increase in adults borrowing from and a 3.0 percentage point increase in adults saving at a financial institution after an FPS is launched, while the relationship with account ownership is not robust once country and time fixed effects are included and the authors do not claim causality. The study notes that at least 123 jurisdictions globally, including 15 in Latin America, have implemented an FPS and highlights rapid uptake in central bank-owned systems such as Brazil’s Pix, Costa Rica’s SINPE Móvil and Mexico’s SPEI (with CoDi and DiMo overlays), as well as private sector-led schemes where central banks have intervened on interoperability (eg Peru’s wallet ecosystem). It flags practical implementation challenges around cybersecurity, fraud and data privacy, interoperability, end user and participant fees, and achieving universal access.