Ecuador and its digital ecosystem: what opportunities exist?

Magdalena Ovalle

Líder de Contenido @Kushki

October 19, 2022

1 min read

Together with Americas Market Intelligence (AMI) we come to talk about Ecuador. A medium-sized country, but dollarized and with a highly loyal population to banks and financial institutions. What opportunities do fintech companies have there and what is the industry like? Here we tell you.

Country context

Did you know that Ecuador moves about US $3 billion in e-commerce transactions? That is equivalent to almost 3% of the country’s GDP. The total volume of e-commerce in Ecuador grew by 29% between 2020 and 2021, and an increase of 22% is projected at the end of 2022.

Ecuador has an interesting characteristic unlike its neighbors: the high fidelity of the population towards traditional banks and financial institutions. Although more than 50 fintech companies are operating in the country, banks are still seen as the main players and promoters of digital payments and innovation.

About 88% of payments made in e-commerce in Ecuador are processed by credit card, followed by debit cards (6%), mobile wallets (5%), bank transfers (5%), and others (3%). To give a comparison, 4% of e-commerce transactions in countries like Peru are made through credit cards, 27% through debit cards, 18% through cash vouchers, and 13% through mobile wallets.

Additionally, cross-border transactions make up the majority of Ecuadorian e-commerce, but as local markets and delivery apps gain traction, the local market is also expanding.

Government efforts

In 2021, the Ecuadorian Congress passed a Fintech Law intending to support the growth of the Ecuadorian fintech sector and all its activity in recent years. Fintech companies in this country are governed by the COPCI Organic Code, which indicates the “development of software and services” as a priority sector for tax incentives. Under this code, fintech companies are exempt from income tax for five years from their launch, as a way to encourage activity.

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