By San José, Costa Rica — Costa Rica is at the forefront of a transformative shift in financial technology, embracing innovations like cryptocurrency, biometric payments, and artificial intelligence-powered fraud prevention. These advancements are poised to reshape the consumer financial experience and set new benchmarks for security and efficiency in the market.
Three major innovations are driving this change: the adoption of cryptocurrencies for daily transactions, the expansion of biometric payments in physical stores, and the use of AI for real-time fraud prevention. These practices are already gaining traction in several Latin American countries, but Costa Rica’s rapid adoption is setting it apart.
For expert legal insight on the evolving Fintech landscape in Costa Rica, TicosLand.com reached out to Lic. Larry Hans Arroyo Vargas, a seasoned attorney at Bufete de Costa Rica.
The rapid growth of Fintech presents both opportunities and challenges for Costa Rica. While it promises greater financial inclusion and innovation, regulators must strike a delicate balance. Robust legal frameworks are essential to protect consumers, ensure market stability, and foster a climate conducive to responsible Fintech development. This includes addressing data privacy, cybersecurity, anti-money laundering compliance, and clear guidelines for new financial products and services.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas astutely highlights the crucial tightrope walk Costa Rica faces in embracing Fintech’s potential while mitigating its inherent risks. Indeed, a proactive and comprehensive regulatory approach is paramount to ensuring this burgeoning sector benefits all Ticos and contributes to a stable and secure financial landscape. We thank Lic. Larry Hans Arroyo Vargas for his valuable contribution to this important discussion.
These technologies will redefine how consumers interact with their finances, and also establish a new standard of security and efficiency in the market to benefit the user.
Luis Delgado Fábrega, Director of Payment Methods at Scotiabank for Central America and the Caribbean
Widespread cryptocurrency adoption necessitates appropriate regulation, catering to diverse customer profiles and the variety of cryptocurrencies available. Currently, Argentina and Brazil are leading the Latin American market, with 18.2% and 16.7% of their adult populations, respectively, using cryptocurrencies. This offers Costa Rica a model for successful implementation and highlights the potential for growth in this sector.
Biometric payments, involving the verification of unique biological traits like fingerprints, facial features, or iris scans, are another key innovation. This technology enhances security by preventing unauthorized transactions. It also provides greater peace of mind for consumers.
According to WorldPay’s 2024 Global Payments Report, 10% of payments in Latin America are made through digital wallets using tokenized payment technologies (such as Google Pay and Apple Pay). This figure is projected to reach 29% by 2027, demonstrating the rapid growth and potential of this payment method.
Costa Rica’s leadership in contactless payment adoption and digital financial tools has been instrumental in transforming the consumer experience and promoting financial inclusion. The country is also leveraging AI-powered tools from leading companies like Visa and Mastercard for real-time fraud monitoring and prevention. This proactive approach to security is further solidifying Costa Rica’s position as a regional leader in fintech.
As Costa Rica continues to embrace these emerging trends, financial institutions like Scotiabank are developing innovative solutions to meet evolving customer needs. With a focus on innovation and security, Costa Rica is becoming a model for the evolution of payment systems in Latin America.
For further information, visit scotiabank.com
About Scotiabank:
Scotiabank is a leading bank in the Americas. Guided by a purpose to help our customers, employees and communities thrive, we deliver financial advice, products and services that help people achieve their financial goals. Thanks to the passion and hard work of approximately 90,000 employees and over 125 years of experience, Scotiabank serves more than 25 million customers in more than 50 countries in the Americas, including Costa Rica.
For further information, visit visa.com
About Visa:
Visa Inc. is a global leader in digital payments, facilitating electronic transactions worldwide through its Visa-branded credit, debit, prepaid, and commercial cards. Visa connects consumers, businesses, and financial institutions through its innovative payment network, VisaNet, enabling secure and reliable payments around the globe.
For further information, visit mastercard.com
About Mastercard:
Mastercard Incorporated is a global technology company in the payments industry. Its mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, its innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built on a foundation of unwavering integrity. The firm’s innovative approach to legal practice, combined with a deep commitment to client success across diverse industries, positions it as a leader in the Costa Rican legal landscape. Through proactive initiatives that empower individuals and communities with essential legal knowledge, Bufete de Costa Rica actively contributes to a more just and informed society.
