CHILE

South America

Users in Chile can make real-time transactions via Transferencias en Línea (TEF), an IP system launched by Centro de Compensación Automatizado (CCA) in 2008. The system was built on a previous online payments service from 2002 and allows account-to-account bank transfers up to CLP6.94m ($10,000) per transaction between both individuals and businesses via online and mobile devices.

TEF settles funds in near-real time and operates 24/7/365, with recipient banks required to credit amounts to their customers within 10 seconds of a payment being received. Almost all banks in Chile are participants of the TEF system, and can access the service provided through which they are authorized by the Commission for the Financial Market to send and receive funds.

Timeline

MARKET DEVELOPMENT

ACCEPTANCE
  • Consumers
  • Banks
  • Merchants
  • Billers

TOTAL PARTICIPANTS

Majority of banks

Population banking level

2.64

Number of debit, credit and charge cards per adult

106

Index to global average

F

Fully banked

Key statistics

2002

IP launch year

Immediate payments types

Single instance

Initiation & authorization

Bank account

ISO 8583

Message standard

Transactions

398m

2019

927m

2024f

18.4%

F5 Yr CAGR

35%

% of adults who have a mobile wallet and have used it in the past year

Share of volumes by payments instrument

Transactions

2019
2024

Spend (USD)

2019
2024
  • Paper-based payments
  • Electronic payments
  • Immediate payments

Immediate payments volume and its share in overall non-paper-based transactions, 2014-24f

% of total electronic payments transaction volume

Insight

In many respects, Chile’s market offers strong potential for future growth and adoption. Chile offers mobile wallet integration, and mobile wallet usage is relatively strong, with 35.4% of adults having used one within the past year.

Between 2015 and 2019, Chile experienced the aggressive growth that many other countries are just entering into. This growth is forecasted to continue throughout the foreseeable future as the country’s reliance on paper-based payments diminishes in the next five years, with both electronic payments and IP usage anticipated to replace those transactions.

However, the limited payment types available to Chilean users — combined with a lack of biller acceptance and only one available initiation method — impedes IP’s convenience. As a result, most payments are currently P2P. There is ample opportunity for fintechs to disrupt the landscape and offer innovative user experiences and enhanced convenience, which will likely re-energize the market and boost both adoption and volumes.

ACI’s take

With a long-established IP network, one might expect adoption in Chile to have tailed off by now. But despite this it continues to rise, with an incremental volume of 31% YOY. Upon closer inspection, it’s not difficult to see that there is still room for this fully banked country to grow: low fintech penetration, legacy ISO standards and a continued reliance on paper-based transactions provide fertile ground for improvement.

Upgrading the TEF rails to modern standards like ISO 20022 will provide Chile with better regulatory transparency, market efficiency and data integrity, and will provide cross-border settlement efficiency in line with global standards.

Meanwhile, banks should look to offer overlay services that would simplify the user experience of transacting in a bid to improve uptake and transition users away from a cash-dominant system.

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