Methods of Payment
The Organic Monetary and Financial Code specifies the wide variety of methods of payment accepted in Ecuador in the terms determined and regulated by the Monetary Board and under the Superintendence of Banks’ control. Banks handle transactions by electronic or digital means for transfers and/or payments to transfer resources and/or payments according to the Superintendence of Banks’ authorization. Central Bank of Ecuador (BCE) resolutions were integrated into the Codification of Monetary, Financial, Insurance, and Securities Resolutions. This regulatory body requires all financial transfers (inflows and outflows) to be channeled through the BCE’s accounts. In principle, the regulation increases monetary authorities’ oversight and prevents banks from netting their inflows and outflows to avoid paying the currency exit tax.
Traditionally, private sector imports into Ecuador have been paid with confirmed letters of credit (documentary letter of credit or stand-by letter of credit) issued by an Ecuadorian commercial bank or an international bank operating in Ecuador. Those letters of credit are confirmed by correspondent banks abroad. Payments are made upon presentation of documents as per letter of credit terms and conditions. The process of obtaining letters of credit can be a bit difficult and burdensome at first, but typically as a company establishes a good relationship with a bank and a good credit history, issuance of letters of credit is simplified.
Financing is a key ingredient in selling to both the government and the private sector. Local banks offer financing. In August 2023, the average corporate/commercial interest rate in Ecuador was 8.86 percent annually.
The 2021 Law for the Defense of Dollarization established that the Monetary and Financial Policy and Regulation Board be divided into a Monetary Policy and Regulation Board and a Financial Policy and Regulation Board. The latter should oversee the interest rate system jointly with the BCE as the technical entity. The law gives the Financial Policy and Regulation Board the ability to prioritize certain sectors for lending from private banks. U.S. exporters with the capacity to provide direct credit facilities will have a significant competitive advantage.
However, U.S. companies would be well advised to exercise judgment before extending credit. Usually, U.S. suppliers willing to offer an open account generally do so only after developing a long-standing relationship with the buyer. U.S. companies should consider including mediation/arbitration clauses when negotiating contracts with Ecuadorian companies. When negotiating an agent or distributor agreement with an Ecuadorian party, the U.S. Embassy recommends that both parties agree beforehand on quantities, delivery timing, price, shared marketing expenses or training, the selection of financial intermediaries, and credit.
There are three credit agencies that operate in Ecuador: Equifax and Aval (private) and Datos Crediticios (public - Registro de Datos Crediticios - Superintendencia de Bancos (superbancos.gob.ec). Credit and debit cards such as American Express, Visa, and Mastercard are widely accepted in Ecuador. In general, banks and cooperatives offer debit cards for their clients.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Banking System
Ecuador’s banking sector is healthy. The Superintendence of Banks regulates the public and private banking sector. As of December 2022, the financial system is comprised of 23 local banks and one international bank (Citibank) with $56.9 billion in assets and $43.6 billion in deposits. The largest banks include Banco Pichincha with $15.5 billion in assets, Produbanco and Banco Pacifico with almost $7 billion each, and Banco Guayaquil with $6.9 billion. The Banking Association (ASOBANCA) estimates 2.3 percent of loans are non-performing. For a complete list of banks in Ecuador, please contact the Ecuadorian Association of Private Banks – ASOBANCA
The Deposit Insurance Corporation (COSEDE) provides deposit insurance and guarantees the safety of deposits in Ecuadorian banks and cooperatives, currently up to $32,000. As of December 2022, there were 484 Savings and Loan Cooperatives, with almost $22 billion in assets and $17.7 billion in deposits. The Superintendent of the Popular and Solidarity Economy regulates the cooperative sector. The cooperatives range in size from $3.1 billion to very small operations serving local communities, with commensurate internal controls. According to the Ecuadorian Central Bank’s Access to the Financial System Report, as of September 2020, 75 percent of the adult (over 15 years old) population (8.5 million people) had access to financial products and services. Foreigners require residency to open checking accounts in Ecuador.
For more information on the banking system please read the section Capital Markets and Portfolio Investment of the Investment Climate Statement.
Foreign Exchange Controls
Ecuador adopted the U.S. dollar as the official currency in 2000. In August 2023, the Monetary Board issued resolution JPRM-2023-014-M on the use of the dollar as the legal tender in Ecuador. The agency specified that “all transactions, monetary and financial operations, and their accounting records carried out in the country, will be expressed in dollars.” Foreign investors may remit 100 percent of net profits and capital, subject to a 3.5 percent currency exit tax, although there are exceptions for certain industries. There are no restrictions placed on foreign investors in transferring or repatriating funds associated with an investment.
U.S. Banks and Local Correspondent Banks
Citibank operates offices in Ecuador and leads transactional solutions for the corporate segment. Western Union and Wells Fargo also are active in the market with large remittance services. Most Ecuadorian banks maintain correspondent relationships with U.S. banks. Banco Pichincha, Banco Pacífico, Banco Guayaquil, Produbanco, Banco Bolivariano, and Banco Internacional are among the major Ecuadorian banks engaging in international business. Banco Pichincha has a branch in Miami. EXIM Bank does not offer any country specific programs. However, the U.S. International Development Finance Corporation (DFC), the U.S. Trade and Development Agency (USTDA), the U.S. Department of Commerce, and other U.S. government agencies provide support to U.S. companies bidding on projects in key sectors.