Alrighty, so here’s the deal—hardly any spots in Colombia will take foreign cash, like US dollars. You can probably count the places on one hand, and even then, mostly in touristy areas where the exchange rates are pretty rough. So, you’re better off sticking to Colombian pesos for your everyday stuff. Oh, and when it comes to banking in Colombia, you’ll find plenty of ATMs around to grab some pesos when you need ’em.
U.S. dollars and Euros are commonly accepted for conversion if you need to exchange money. You can check the latest exchange rates using tools like the XE Currency website or mobile app. This app is highly recommended for its ease of use and frequent updates. However, remember that currency exchange involves service fees, and the exchange rates offered by vendors may not match the more favorable XE or bank rates.
If you are an international resident in Colombia, opening a local bank account can offer numerous advantages. It can facilitate payments for utilities, products, and services in the local currency, avoiding high fees and unfavorable exchange rates associated with international transactions. It also allows for direct deposit of salaries for those employed within the country, simplifying the management of personal finances, and enhancing financial efficiency.
Digital banking has further streamlined financial operations, with leading banks such as Bancolombia, Banco de Bogotá, and Scotiabank Colpatria providing comprehensive online and mobile banking services. These services allow easy payments, money transfers, and savings management from anywhere.
A Colombian bank account lays the foundation for financial stability and peace of mind, offers control over financial transactions, assists in monitoring expenses, and helps establish a financial history in the country.
Cards are widely accepted across Colombia, but traditional establishments prefer cash or, in some cases, transfers in Bancolombia or the Nequi app. It’s essential to remember that Colombia is still developing, and standards might differ from North American or European norms.
It’s essential to plan and always carry sufficient cash while traveling. While traveling in South America, I once came across a small rural but touristy village that didn’t have an ATM that could accept international cards. I had to take an informal taxi to the next town, about 30 minutes away, to withdraw cash.
Considering all of that, this article provides a comprehensive guide on essential financial services in Colombia, such as opening a bank account, navigating international money transfers, understanding credit cards and ATM usage, and establishing credit, among other related topics.
Banks in Colombia
Opening a Bank Account in Colombia
Foreign nationals living or conducting business in Colombia may be interested in knowing that they are eligible to open bank accounts there. However, certain requirements must be met, such as providing specific documents and meeting other criteria. Establishing a bank account is essential for effective financial management, and digital banking advancements have simplified the process for international residents. This guide is designed to provide critical information and insights, address all your queries, and guide you through opening a bank account in Colombia.
To establish a banking relationship in Colombia, it is necessary to provide the following information:
- Proof of identity: You must present valid identification documents upon request. These documents include a valid passport, a visa that demonstrates legal residency (and, if applicable, work rights), and the “Cédula de Extranjería,” which serves as the national identification card for foreigners entering Colombia.
- Proof of address: Official documents like a lease agreement or a recent utility bill can prove an individual’s current address.
- Proof of income: Some financial institutions may require a minimum deposit, and it may be necessary to specify the origin of your funds if they do not come from a regular paycheck.
It is advisable to have someone fluent in Spanish or a translator to assist.
Once you have submitted all the necessary documents and completed the application, the financial institution will carefully review your details to determine your eligibility. Depending on the type of bank account you open, you may receive a debit card to access your new account immediately upon approval. Please note that remote account opening is not possible. You must be physically present with all the necessary documents at a bank branch.
Some banks may have a 6-month period where you cannot transfer funds between your overseas account and your Colombian one, so it is advisable to ask beforehand.
Remember that the documentation requirements for opening a bank account can vary significantly depending on the bank, the specific branch, or even the clerk handling your request. For instance, in 2019, I could open an account at the Bancolombia branch in the CC Oviedo shopping center in El Poblado, using my passport and a screenshot of my primary bank account as documentation.
Popular Colombian banks for foreigners
Colombia has one central bank, the Banco de la República, which the state operates. Colombia also has numerous commercial banks and foreign bank branches operating within its borders. Before traveling, it is crucial to research whether your home bank partners with banks abroad to waive fees. Some banks may charge a fee or take a cut of your withdrawal. Always compare exchange rates to avoid losing money.
Central retail banks in Colombia include Bancolombia, Banco de Bogotá, Banco Davivienda, and Banco de Occidente. International banks operating in Colombia include Citibank Colombia, Scotiabank Colombia, BBVA Colombia, Banco Popular Colombia, and Banco GNB Sudameris.
Bancolombia is a widely used bank nationwide and has gained significant popularity. Nearly every business holds a Bancolombia account, and many adopt QR code payments that require using the Bancolombia app.
International Money Transfers
Popular options for sending and receiving money in Colombia include Western Union, Moneygram, Exito, Remitly, XE, Wise, WorldRemit, Xoom, and Ria.
On April 1, 2024, I sent 1000 EUR via Revolut to my Bancolombia account. I paid an 18 EUR fee and received 4080006 COP, just 82000 Cop, shy of the official exchange rate of 4088990. In total, I lost ca. 38 EUR or 41 USD on the way.
The following information has been acquired from the respective service websites and through conversations with customer service representatives. Values on the images (April 1, 2024) may be outdated due to the daily exchange flux.
Western Union
Max Amount: 5000 USD
Fees: 1.99 USD
How long does it take? Few minutes
Moneygram
Max Amount: 10000 USD
Fees: Fees vary based on transaction details such as transfer amount, payment type, delivery method, and pickup location.
How long does it take? A few hours
Remitly
Max Amount: Unknown
Fees: no fee for transfers above 500 USD
How long does it take? Same day or up to 5 days
XE
Max Amount: According to the customer service chat, sending is unlimited.
Fees: 1.99 USD
How long does it take? Few minutes
Wise
Max Amount: USD per transfer
Fees: From 0.43%
How long does it take? Up to 2 working days (usually way less time)
WorldRemit
Max Amount: 9000 USD from the USA, or 40000 EUR from Europe
Fees: 2.99 EUR
How long does it take? 2 Business days
Xoom/ PayPal
Max Amount: 50000 USD for US Residents, 75000 CAD for Canadian Residents, 25000 EUR for EU Residents, 21000 GBP for UK Residents
Fees: May vary
How long does it take? Few minutes
Ria
Max Amount: 2999 USD
Fees: Varies according to the amount
How long does it take? Up to 5 Days
Revolut
Max Amount: Unknown
Fees: 18 EUR
How long does it take? 1- 3 days
Paysend
Max Amount: 999 USD – 10000 USD
Fees: 2 USD per transfer
How long does it take? Up to 3 days
If you need to send a sizable sum to Colombia to acquire real estate or a significant investment, a brokerage account at Alianza or Acciones y Valores that allows wire transfers is another popular option among foreigners. However, remember that any funds transferred for investment or real estate acquisition must be appropriately registered with the Bank de la República. XE allows you to send to businesses only if you have a business account.
Credit Cards and ATMs
If you’re looking for options to receive and exchange money in Colombia, using your card at ATMs is one of the best ways. However, your bank will charge you fees for using ATMs and exchange fees when you withdraw money in pesos.
There are multiple ATMs in Medellin and all over Colombia, and you can easily find them in shopping centers or on the streets. ATMs usually have an English option. However, it is not advisable to use an ATM on the street, as it’s not safe. So, using ATMs in malls or banks is a safer option. Only carry what you plan to spend, and keep the rest securely stored.
Look for banks that don’t impose foreign transaction fees or ATM fees. For instance, Charles Schwab reimburses all ATM fees, a popular choice amongst travelers and expats from the USA.
Visa and MasterCard are widely accepted in numerous stores in Colombia, and some places also accept American Express. However, all credit card companies generally charge exchange fees and per-use fees. Not all shops and eateries accept credit cards, especially the smaller ones, which take only cash.
When arriving in Colombia, it is advised to withdraw money at an airport ATM. Exchange booths are available there, but the rates are often unfavorable. If you get a reasonable rate in your home country, you may exchange for some pesos in advance.
When using an ATM, you may face multiple fees, such as an ATM fee, an international withdrawal fee, and a currency exchange fee. The charges may vary depending on the ATM you use. Some ATMs may charge an exchange fee but waive the withdrawal fee, while others may charge both. For instance, when withdrawing cash (usually from Aval or Davivienda) with my Wise or Revolut card, I must pay more than 20,000 fee pesos.
To avoid additional charges, always withdraw cash in the local currency, Colombian Pesos, rather than being charged in your home currency. If you select to be charged in your home currency, the ATM may increase the exchange rate, resulting in extra fees. This practice is known as ‘Dynamic Currency Conversion’.
Colombian ATMs usually have a cap on the amount you can withdraw in a single transaction. For instance, Bancolombia often has a limit of 1’500.000 pesos, Davivienda $ 400.000, while I heard ServiBanca now has a maximum of 1.000,000 pesos. I used to be able to withdraw 2 million Pesos from them, but I haven’t used them in a long time. Moreover, you’ll often be constrained to the card’s daily withdrawal limit if you use an ATM debit card.
When using your card to pay at a bar or restaurant, you will be asked to choose between crédito (credit) or débito (debit). If you use a credit card, you may be asked ¿en cuántas cuotas? (how many installments?) you want to pay in. It is recommended to select ‘una, por favor’ (one, please), although you can choose to pay in up to 24 installments. Using a debit card, you will be asked if it is linked to a corriente (checking) or ahorros (savings) account.
Before visiting Colombia, sending your bank a travel notification is advisable. If not, your credit or ATM card may not function in Colombia or, as it happened in my case once, will be blocked due to “suspicious activities,” such as withdrawing money in Medellin.
If you decide not to use an ATM for currency exchange, you may face difficulties. Some airport exchanges may only exchange the U.S. Dollar or the Euro, even if they offer fair rates. Hotels exchange foreign cash but charge a large fee for the service. If you decide to bring cash, ensure that your bills are not damaged or torn, as merchants may not accept them.
In the past, traveler’s checks were commonly used as a safe method to carry currency when traveling abroad. However, today, there are more efficient ways of obtaining cash. Traveler’s checks require manual verification and usually offer poor exchange rates. In Colombia, banks may only accept traveler’s checks denominated in U.S. dollars, but not any other currency. Considering the many unknowns and variables involved, it’s not worth the hassle of exchanging your money using this method.
How to establish credit
It’s important to note that even if you have a strong credit history in your home country, it will not be valid in Colombia. However, foreigners with valid visas and cedula de extranjería can enroll in the Colombian credit system managed by DataCrédito, which is part of Experian Colombia S.A. This system has been operating for 40 years and is essential for accessing various services.
To enroll in the system, visit a DataCrédito office with your cedula and a copy of it. Once registered, you can access your credit report online for free during the first month. DataCrédito offices are in major cities like Medellín, Bogotá, Cali, and Barranquilla.
To build good credit, you can use services like postpaid cell phone plans or internet, store credit cards, or obtain a bank credit card and make timely payments. Establishing credit in Colombia takes time, and getting mortgages or local credit cards can be challenging, especially for foreigners.
To be considered for a mortgage as a foreigner in Colombia, you must have residency with a cedula and have lived in Colombia, preferably for a few years. You also need a bank account in Colombia and a credit history there. Furthermore, you may be required to prove that you file taxes in Colombia. It’s worth noting that even Colombians find it challenging to get a mortgage, which is why the mortgage market in Colombia is relatively small, with only about 3% of adults having a mortgage, according to statistics.
FinTech and payment services
Colombia has rapidly emerged as a major player in Latin America’s FinTech industry, ranking as the third-largest hub after Brazil and Mexico. Nearly 300 FinTech firms operate in the country, driven by the widespread use of smartphones, internet connectivity, and essential banking services among Colombians. These factors create an ideal environment for financial innovation and inclusivity.
The Colombian government has played a crucial role in fostering this growth by implementing accommodating policies, revising licensing regulations, and focusing on Open Finance. This sets the stage for a promising future in financial technology. They are introducing the Compania de Financiamiento license, which streamlines obtaining a de novo banking license, allowing new players like Rappi and Nubank to enter the market and intensify competition in a sector previously dominated by a few big names.
Furthermore, Colombia’s adoption of an Open Finance framework signals a move towards a more transparent financial system. Brazil’s model inspires proposed features such as bank account portability. Additionally, plans are underway to introduce a no-cost instant payment system by 2024 – like Brazil’s Pix system – to reduce transaction costs and promote payment digitization.
Colombia’s FinTech landscape is increasing, with a staggering annual growth rate of 120% and the number of companies doubling over the past five years. This growth is supported by government efforts to shape a competitive and innovative financial sector.
Bancolombia QR Code
Bancolombia recently introduced a new QR code payment feature in its app, allowing users to perform transactions efficiently. This innovative method simplifies payments, making it easier for customers to access and secure their accounts. By scanning a QR code with their smartphone, customers can pay for goods and services without needing physical cards or cash.
I use this option regularly and find it very convenient, except when the app crashes, which can happen. Therefore, it is advisable to always carry some cash with you.
Nequi
Nequi is a digital banking service used by over 15 million people. It offers a mobile-first platform that simplifies traditional banking and provides hassle-free financial management. You can use it to make quick and free money transfers, pay bills, set up automatic savings, and get a physical card for shopping online or in stores. Many street vendors have also adopted this app as a payment method.
I have been using this, and the good thing is you can remain anonymous while using the service. All you need is a phone number.
DaviPlata
DaviPlata, established in 2011 by Banco Davivienda, has become a significant player in the financial technology industry with approximately 16 million customers. Its user-friendly platform provides a convenient way to manage finances on mobile devices. It offers diverse transaction services such as topping up mobile minutes, viewing transaction history, wire transfers, and paying utility bills by scanning barcodes.
Apple Pay
Apple Pay is a payment feature seamlessly integrated into various Apple devices such as the iPhone, Apple Watch, Mac, and iPad. You can easily add your credit or debit card to the Wallet app on your iPhone, and once it’s added, you can use it across all your devices. Paying is simple; you can double-click or tap on your device to complete the transaction. If you are currently in Colombia and want to use Apple Pay, you can use it with the following banks: Banco Davivienda, Bancolombia, and Nu Colombia. It is not very common.
Google Pay
Google Pay is a fast and convenient payment service that enables you to use your saved payment cards in your Google account to pay online, in-app, and in-store using your Android device. Merchants who accept Google Pay can be identified by looking for the GPay brand displayed by them. However, it doesn’t seem to be very common in Colombia.
Crypto
There are a couple of Athena crypto ATMs in Medellin, such as the Monterrey Shopping Mall. Suppose you are interested in selling digital currency and receiving physical cash. In that case, Athena ATMs can be a good choice, offering you the opportunity to receive a few hundred dollars or more.
MIND Caffe is a cafe in Provenza that accepts cryptocurrency payments and educates visitors about the cryptocurrency trend. Customers can order and pay for products directly from their table using cryptocurrencies, and the cafe also features a machine that enables the purchase of Bitcoin with Colombian pesos. These types of establishments accept a range of cryptocurrencies, including Bitcoin, Ethereum, Solana, and Binance. However, they are not common.