And this little piggy has gone electronic

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

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This article is about SINPE. No, it is not a new virus, disease, or pill.  It is what is happening to online banking in Costa Rica, and the system lets anyone transfer money into any account in the country.

SINPE, or Sistema Interbancario de Negociación y Pagos Electrónicos is the main payment system for the central bank.  It translates into English as the “interbank electronic payment system.”  

The system handles electronic money transfers, check clearing, direct debts and direct credits as well as provides account information for all bank-related institutions. The system connects 99 percent of Costa Rica’s financial institutions, handling hundreds of millions of U.S. dollar transactions daily.

More importantly, it is providing an example to other countries all over the world because a key developer of the system is homegrown.

SINPE grew out of the new Organic Law of the Central Bank of Costa Rica, law 7558 of Nov. 27, 1995.  This law broke the monopoly of government-owned banks.  It opened the doors to private banking, giving everyone new choices. The law also set some goals for the future, one being an efficient electronic banking system that gave birth to SINPE.

The Central Bank of Costa Rica moved the banking application to Microsoft’s DOT NET (.NET) Technologies in September 2002 thanks to ArtinSoft Corp.

Microsoft’s .NET Technology consists of Web services that connect information, people, systems, and devices through software.  Web services are revolutionizing how computer software applications talk to other applications — or how computers talk to other computers using a data format that is equivalent to a worldwide computer language. 

ArtinSoft Corp. is a Costa Rican company, started by software entrepreneur Carlos Araya.  He left his post at Costa Rica’s Technology Institute in 1993 to found the company that has become a leader in Web services development.  Intel is a major investor in the company.  

SINPE can do a lot. Any business or individual can use SINPE to transfer money to any account to pay anyone for anything in Costa Rica.  This is much more than simply paying your monthly bills like telephone, water, and electricity.   Each account has a unique 17-digit number.

For example, let us say a worker or supplier has an account in BAC Costa Rica, and your bank account is in Interfin.  You can set up your account at Interfin, through SINPE, to pay the worker or supplier.  

Another example: You need to transfer a large sum of money within the country and do not want to carry around a check. SINPE is the answer. 

 

Credit card companies have been using the system for years to transfer credit card collections into affiliate member accounts, expediting payment. 

Immediate payment transactions can be somewhat expensive, but overnight processing is relatively cheap. One needs to contact the local bank to get the exact fees.

There are many reasons not to carry much cash on you in Costa Rica. One reason are the banditos lurking around many corners. SINPE give people an alternative.

Banco de Costa Rica has now begun charging customers a service charge if they use too many checks. They do not want people to use these passé instruments but to get familiar with new ways to pay like debit cards and SINPE. 

This super new system also has a warning, as great as it is because it is fully transparent.  Using it is like hanging your laundry out for everyone to see.  At least all those involved in watching money transactions for illicit activity will see it.

Honest people have nothing to worry about and should use the system.  It can take the wait out of those long lines at the bank and, as more people become aware of and use it, maybe those long lines at the bank will be a thing of the past.

Article first published in A.M. Costa Rica on August 8, 2005.