Published and draft legislation - Ecuador

Reforming electronic money management

Resolutions 252, 258, 259 & 260

At the end of July, Ecuador’s Council for Monetary & Financial Policy and Regulation published four resolutions regulating the management of electronic money, applicable to Ecuadorian financial institutions.

Resolution 252 enables all financial institutions servicing money-transfers from abroad to an electronic-money account (EMA) held by a natural person in Ecuadorian territory through the Ecuadorian Banco Central del Ecuador (BCE), to use the Electronic Money system.

The regulation also enables natural and legal persons with active EMAs to manage their payments, either online or pre-programmed by the services or products contracted, to pay taxes, transfer funds between one or several accounts in financial institutions or between different EMAs, etc.

Furthermore, it has set new fees for withdrawing money, making transfers, handling payments and charges, wire transfers, changing security parameters and using the platform for commercial management.

By virtue of Resolution 258, transactions may be initiated from one or several accounts in financial institutions or EMAs to other accounts using mobile devices. Electronic accounts may also be opened on a mobile phone or via Ecuador’s central bank website.

This resolution also contains a new chapter on the prevention of money laundering and financing of terrorism through electronic money transactions, by virtue of which those natural or legal persons that want to take part in the electronic money system need to provide information to the central bank on their financial activity, their address, compliance with tax obligations, evidence that their financial statements have been submitted to the relevant authority, etc. This information must be updated according to the schedule defined by the central bank’s General Management.  

Resolution 259 recognises Electronic Money System accounts as forming part of the Ecuadorian central bank’s interbank payment system.

Finally, Resolution 260 introduces the “Regulation for implementing the Third Transitional Provision of the Organic Law for Solidarity and Civic co-responsibility in the rebuilding and recovery of the areas affected by the earthquake of 16th April 2016”. This gives Ecuador's central bank, the BCE, a maximum period of 12 months to offer institutions operating within in the country’s financial system a subsidy to cover the cost of installing mobile banking systems that can make transactions using the BCE’s Electronic Money Platform.  

The subsidy will be granted provided the following conditions are met:

  • The entity is qualified by the BCE to operate within the Central Payment System;
  • The entity is not, either when making the application or receiving the subsidy, in a situation of corrective or intensive supervision, nor is it involved in settlement processes arranged by the control bodies;
  • Such  financial institutions as are operating in the popular and social support sector must be in segments 1, 2 or 3, according to the list approved by the Popular and Social-support supervisory body, the Superintendencia de Economía Popular y Solidaria;
  • The institution’s total assets must be worth no more than USD1 billion;
  • The mobile banking systems must be fully installed, checks with the BCE must have taken place to ensure they work, and they must be integrated in the Electronic Money Platform.

The subsidy will have the following thresholds:

  • 100% subsidy of installation costs up to USD25,000;
  • Subsidy of 50% of the surplus, on installation costs over and above USD25,000, with a subsidy cap of USD40,000;

In both cases, the subsidy may be used to cover the cost of the service technicians to integrate the technology with the Electronic Money Platform and under no circumstances will it pay for expenses that are not directly related to this implementation.

The four resolutions regulate basic areas and enable Ecuadorian financial institutions to follow the rolling out of the electronic money model. The regulations have been in force since July of this year.