🌴 Payments in the Caribbean and Central America

One region, five monetary regimes

A country’s monetary regime is the legal status of its currency and the way its exchange rate is set. The Caribbean and Central America pack several variants into a small area. Three economies no longer have a currency of their own: Panama, El Salvador, and Puerto Rico, the last because it is a US territory. Several island nations have held a fixed peg to the dollar for decades, while the rest let their currency float, sometimes under capital controls. A regional acquirer therefore settles in US dollars in San Juan, in Eastern Caribbean dollars in Saint Vincent, and in colones in San José. Those three settlements fall under three unrelated legal systems and three separate supervisors. Each acquiring agreement is negotiated on its own.

Dollarization is the adoption of a foreign currency, here the US dollar, as legal tender by a country that no longer issues its own. Its effect on payments is limited to removing currency risk on the US corridor, since a payment collected in dollars needs no conversion. Compliance obligations, licensing requirements, and dependence on a correspondent bank stay the same. A payment service provider (PSP) collecting dollars in Panama City is subject to Panamanian law, to the Superintendencia de Bancos, and to local anti-money laundering rules. Panama has no central bank, and therefore no lender of last resort. The liquidity of its banking system depends entirely on foreign correspondent banks.

Repatriation is the process by which a merchant converts its local-currency receipts and transfers them to an account abroad. It is the constraint specific to the region’s floating-currency markets. Collecting in colones, Dominican pesos, or quetzales requires a local counterparty that can convert the funds and wire them abroad. How long that takes depends on dollar availability in the local FX market and on central bank rules. The intermediary’s technical capabilities play no part. A cross-border merchant therefore sizes its cash position on those local timelines, which run on a different order of magnitude from European ones. The constraint bites when suppliers outside the region have to be paid.

Puerto Rico: ATH, ATH Móvil, and Evertec’s dominance

Puerto Rico is a US territory that pays in dollars, under federal law, with Visa and Mastercard cards. Yet its payments market is distinct from the mainland’s. The island has its own domestic debit network. That network, ATH (A Toda Hora), has been operated since the 1980s by infrastructure spun out of Banco Popular. The ATH Móvil wallet, launched in 2015, plays the role that Zelle and Venmo play on the mainland. An acquiring contract that lists only the international networks therefore leaves Puerto Rican debit out of scope.

Evertec, Inc., headquartered in San Juan, has run ATH since it was separated from Banco Popular. The company is listed on the NYSE. It operates the domestic network, merchant acquiring, issuer processing, and part of the island’s core banking, all at once. This vertical integration puts under one operator functions that are kept separate elsewhere. It no longer exists in major markets, where competition authorities have broken it up. It explains both how fast Evertec executes locally and why a new entrant has no credible fallback. Network access, acquiring, and processing are all negotiated with the same counterparty.

ATH Móvil is a peer-to-peer transfer service that identifies the recipient by phone number and is free up to a limit. Its merchant version, ATH Móvil Business, gives small shops, independent professionals, and informal sellers a way to get paid, in segments that card terminals serve poorly. Evertec credits this product with part of its Puerto Rico segment’s 2025 growth. The same pattern shows up across the region. A domestic wallet takes hold first in P2P transfers, then expands into merchant acceptance without ever touching the card network, which means no interchange and no acquiring contract.

• Check the ATH connection before relying on any PSP’s promise of “US, territories included” coverage.
• Measure the debit/credit mix: credit cards dominate less than on the US mainland, and most debit runs over the local network.
• Plan for ATH Móvil Business in small-ticket and personal services segments, where cards see little use.
• Handle compliance under US federal law: Puerto Rico is not a foreign jurisdiction for sanctions and anti-money laundering purposes.

Sand Dollar, JAM-DEX, and DCash: three CBDCs, the same wall

A central bank digital currency (CBDC) is a digital form of central bank money, issued by the central bank and, in its retail version, held directly by the public. The Caribbean hosted the world’s first deployments. The region recorded three world firsts in under two years: the first retail CBDC to move beyond the pilot stage, the first issued by a currency union, and the first with legal tender status. None reached the scale its central bank was aiming for. Two are still live, and the third has been shut down. Together they make up the most complete body of real-world evidence on retail CBDC adoption.

The Sand Dollar is the digital currency issued by the Central Bank of The Bahamas and distributed by licensed financial institutions. In March 2023, the central bank reported B$1,024,816 in circulation and 101,636 personal wallets. On the acceptance side, there were 1,512 merchant wallets, 455 active merchants, and 9 licensed wallet providers (Central Bank of The Bahamas, press release of April 3, 2023). The CBDC accounts for less than 1% of currency in circulation. Wallet top-ups fell from about B$49.8 million to B$12 million in a year (financial press, 2024). In 2024, the governor announced a two-year timeline to require commercial banks to give their customers access.

JAM-DEX is the digital currency issued by the Bank of Jamaica, the first in the world to receive legal tender status. The central bank reported 282,274 registered wallets at the end of 2024, up 7% year over year, for a currency worth about 0.1% of currency in circulation. Growth rates in 2025 were high: transaction value rose about 550% and volume about 267% year over year (Bank of Jamaica, as reported by the Jamaican press, 2025–2026). That growth starts from a very low base. Only three wallets distribute the currency: Lynk, JN Pay, and Sagicor Bank.

On February 13, 2026, the ECCB Monetary Council suspended development of DCash 2.0 in favor of a regional fast payment system. A central bank that has already deployed a CBDC is thus dropping that format for an instant rail built on bank accounts. The ECCB Fast Payment System targets the eight members of the union, with phone-number or QR addressing on existing bank accounts. It requires neither a new unit of account to circulate nor a wallet for people to adopt. The region is moving to the model Costa Rica put in service ten years earlier.

Costa Rica: SINPE, SINPE Móvil, and regulated fees

SINPE is Costa Rica’s national payment infrastructure, in service since 1997. The Banco Central de Costa Rica runs it directly. It operates gross settlement, credit transfers, direct debits, check clearing, and digital identity services itself. Few central banks run that many retail functions in-house. That position shaped the launch of SINPE Móvil in 2015. The BCCR had no consortium to win over and no interoperability to negotiate, because the banks were already connected to the system it ran.

With a population of about five million, that volume works out to roughly 140 instant transactions per person per year. That is higher usage density than Brazil, the market usually cited as Latin America’s benchmark. The average transfer, around ₡16,500, puts SINPE Móvil in the territory of everyday purchases rather than one-off transfers. It is the go-to payment method for small-ticket purchases, the segment where a terminal’s fixed cost weighs most.

The caps have two consequences for a PSP entering the Costa Rican market. With the acquiring margin capped, acquirers compete on service and authorization rates rather than on price. The same regulation requires contactless EMV equipment and makes strong authentication mandatory for card-present transactions above ₡50,000 or US$100. A noncompliant terminal fleet exposes its operator to regulatory risk as well as a commercial handicap. Replacing it has to come before market entry.

Panama and El Salvador: two dollarizations, two payment systems

Panama has used the US dollar since 1904, alongside a balboa that exists only as coins. The country has no central bank. Banking supervision falls to the Superintendencia de Bancos de Panamá, and the banks themselves built the payment infrastructure, with no public mandate and no access requirement. With no public rail, the retail market relies on proprietary private systems that have become de facto standards. Having no central bank also leaves this regional financial center without a lender of last resort.

Yappy is the wallet that Banco General, the country’s largest private bank, launched in 2019. A commercial bank took on the role that central banks play elsewhere, then opened its wallet to competitors. In use, Yappy resembles Brazil’s Pix. In governance, it is the opposite: the infrastructure belongs to a private company that sets its own access rules. A foreign PSP therefore negotiates its connection with Banco General, not with a regulator. Access terms are not published and only come out during the negotiation.

El Salvador adopted the dollar through the Ley de Integración Monetaria, which took effect on January 1, 2001. The country then pursued two separate payment policies within a single decade. The first was bitcoin, adopted as legal tender in September 2021. The second was the launch of Transfer365, a free public instant rail operated by the Banco Central de Reserva and open to banks, cooperatives, and savings and credit companies. Transfer365 now carries most of El Salvador’s instant transfers.

Tether Holdings, the issuer of USDT, moved its headquarters to El Salvador in 2025. Having dropped bitcoin’s legal tender status, the country still keeps a crypto strategy, which has shifted from the currency itself to hosting issuers. The two fall under different regimes. Bitcoin’s legal tender status affected merchant acceptance, while an issuer setting up in the country falls under the licensing regime for stablecoin issuers.

Guatemala, Honduras, Nicaragua: national rails and SIPA

Guatemala, Honduras, and Nicaragua share a two-tier payment architecture. A gross settlement layer operated by the central bank provides finality, meaning that settlement between participants is irrevocable. An automated clearing house, public or private depending on the country, handles retail payments and settles its balances in the first layer. None of these countries has launched a mass-market instant rail comparable to Pix or SINPE Móvil. Retail payments there rely on cards, cash, and private wallets.

Guatemala’s LBTR, its real-time gross settlement system, settles in two currencies. An institution with an account at Banguat settles its obligations there in quetzales as well as in US dollars, on the central bank’s books. Few national settlement systems offer this dual-currency leg. It greatly simplifies treasury for a firm that collects in local currency and pays in dollars. It also partly explains why Guatemala connected to the regional rail.

That regional rail is SIPA (Sistema de Interconexión de Pagos), live since 2019 and coordinated by the Consejo Monetario Centroamericano and its executive secretariat, SECMCA. Its architecture directly interconnects the national payment systems, each of which keeps its own rules and its own operator. No central platform sits between them. The result is the most advanced cross-border retail rail in Latin America, achieved without any shared infrastructure to fund.

In the last mile, meaning consumers’ access to electronic payments, two players dominate outside the traditional banking system. Tigo Money, run by Millicom since 2010, covers Guatemala, Honduras, and El Salvador and remains the preferred channel in rural areas without bank branches. Zigi, the wallet of Banco Industrial, plays the role in Guatemala that telco mobile money plays elsewhere. It offers a digital account, a QR code accepted by major retail chains, transfers by phone number, and remittance receipt in partnership with Intermex. So in Guatemala, this service comes from a commercial bank, not a telecom operator.

Accepting local debit: switches and acquirers in the Caribbean

A domestic switch is the system that routes debit transactions between banks in the same country. Across the region, credit cards are routed over the international networks and debit over these national switches. The switches are almost always owned jointly by the country’s banks, so access is negotiated market by market rather than with an international scheme. They are missing from global overviews, yet they control access to half of retail volume. A rollout across six Caribbean markets therefore means six separate connections with six different operators, and no common ownership links them.

Jamaica publishes a more detailed description of its payment architecture than its neighbors do. The Bank of Jamaica has operated JamClear-RTGS since February 2009 for payments of JMD 1 million or more, JamClear-CSD since May 2009, and the JamClear-FXTP foreign exchange platform since June 1, 2020. Retail clearing runs through the ACH, in service since October 2002, and through MultiLink, a shared ATM and point-of-sale network launched in June 1997. J.E.T.S. Limited operates both, and together they carry the island’s retail payments.

In the Dominican Republic, two companies split the acquiring market, and no sizable third player has emerged. CardNET, backed by the Consorcio de Tarjetas Dominicanas, is a shared utility owned by several banks. AZUL belongs to Servicios Digitales Popular, part of Grupo Popular, the parent company of Banco Popular Dominicano. Both cover terminals, e-commerce, QR, and contactless, so the choice comes down to the counterparty rather than to features. Separately, the tPago wallet, run by GCS International, aggregates the accounts and cards of about 10 Dominican institutions.

In three markets in the region, retail electronic payments run through telecom operators rather than through a banking network. In Cuba, the Transfermóvil app is run by ETECSA, the state telecom operator, together with the Monedero MiTransfer wallet. The retail channel is therefore controlled by a state-owned telecom company, a rare setup that is hard to work around. In Haiti, electronic payments rely on telco wallets, Digicel’s MonCash and Natcom’s Natcash, with agent networks handling cash-in and cash-out. In Guyana, MMG (Mobile Money Guyana), backed by the GTT telecom group, plays the same role, and merchant acceptance follows the wallet rather than the card.

Remittances, the region’s largest payment flow

Remittances (remesas in Spanish) are the money migrant workers send back to their home countries. In several countries in the region, they are worth more than exports, foreign investment, and tourism combined. They are the region’s largest payment flow. Sizing a market such as Honduras, El Salvador, or Guatemala starts with understanding how they work. The corridor is almost always the same, from the US to Central America and the Caribbean. The region therefore depends on the laws of a single sending country.

Section 4475 of the US Internal Revenue Code, created by the One, Big, Beautiful Bill Act of 2025, imposes a 1% excise tax that has applied since January 1, 2026. It applies to remittance transfers sent by a US sender to a recipient outside the US. It covers only transfers funded with cash, a money order, a cashier’s check, or a similar physical instrument. What triggers the tax is how the transfer is funded.

The BCRD has built that effect into its forecasts and expects more than US$12.2 billion in remittances in 2026. Growth would slow to around 3.5%, from 10.3% in 2025 (BCRD, January 2026). Market concentration on the US side also weighs on the price senders pay. Western Union’s acquisition of Intermex narrows retail competition on the busiest corridors. Intermex had specialized in the US–Mexico and US–Guatemala corridors through an agent network.

Payout to recipients is going digital fast, and wallets are gradually replacing cash pickup at an agent’s counter. Zigi receives Guatemalan remittances in partnership with Intermex, while Tigo Money covers rural Guatemala, Honduras, and El Salvador. tPago and bank wallets fill that role in the Dominican Republic, and MonCash and Natcash do so in Haiti. The public Transfer365 CA-RD rail, launched in 2023, offers a direct intraregional route from online banking, with no money transfer operator involved.

Accepting payments locally: tourism, multiple currencies, and correspondent banks

In much of the region, tourism is the largest source of foreign currency after remittances. It shapes how acceptance works: foreign cardholders, cards issued outside the region, high ticket sizes, strong seasonality, and a high share of contactless payments. The Dominican Republic shows the scale. The country welcomed 11.6 million visitors in 2025, a national record (Ministerio de Turismo, 2026). Tourism receipts came close to US$11.2 billion, and in May 2026 the BCRD expected them to exceed US$12.5 billion for the year.

Dynamic currency conversion (DCC) offers a foreign cardholder the option to pay in their home currency, at a rate locked in at the time of the transaction. Whether it applies depends on the monetary regime of the market where the card is accepted. A US cardholder paying in San Juan, Panama City, or San Salvador pays in their own currency, with no conversion and no FX margin, so DCC has no purpose there. In the Bahamas, the 1:1 peg has the same practical effect, with a fixed, public rate the cardholder knows before paying. In floating-currency markets, the conversion margin becomes real. That leaves room for DCC, and for cardholder disputes over the terms they accepted.

The payment infrastructures that have taken hold in the region have one thing in common. Each is backed by an institution with the power to impose interoperability: the central bank in Costa Rica and El Salvador, a dominant bank in Panama and Puerto Rico. Those that failed relied on voluntary participation from players who had no interest in joining, as banks were asked to distribute a product that competed with their own deposits. The three Caribbean CBDCs are the costliest example. The power to require participants to connect thus emerges as the common condition behind the region’s successful deployments.