Methods of Payment

The U.S. Commercial Service discourages sending shipments without agreeing to payment terms in advance and receiving proper bank documents. Advance payment or an irrevocable letter of credit are recommended for initial commercial transactions until a well-established relationship based on prompt payment and contractual obligations is established with the Salvadoran counterpart. Letters of credit (LCs) are among the most secure instruments for international traders. An LC is useful when reliable credit information about a foreign buyer is difficult to obtain, but the exporter is satisfied with the creditworthiness of the buyer’s foreign bank. An LC also protects the buyer since no payment obligation arises until the goods have been shipped or delivered as promised.

Open account transactions among established business partners are used in El Salvador. The goods are shipped and delivered before payment is due, usually in 30 to 90 days. This payment method is the most advantageous option to the Salvadoran importer in cash flow and cost terms, but it is consequently the highest risk option for the U.S. exporter. However, with the use of one or more of the appropriate trade finance techniques, such as export working capital financing, government-guaranteed export working capital programs, export credit insurance, export factoring, etc., the U.S. exporter can offer open competitive account terms while substantially mitigating the risk of nonpayment by the foreign buyer. Most banks operating in El Salvador and a few private companies, such as Quedex and Inter Corp, offer Factoring.

Local credit-rating agencies should be authorized by the financial system supervisor (SSF); three companies are currently approved to manage credit and financial history in El Salvador: INFORED, Transunion El Salvador, and Equifax Centro America. Asociacion Protectora de Creditos was previously approved but closed operations in 2021.

In priority order, primary credit and charge cards used in El Salvador are Visa, MasterCard, and American Express. According to legislation, the maximum interest rate for credit cards and loans is 1.6 times the simple average effective rate established by the Central Bank.

Collection agencies are not regulated and are often run by legal professionals. The most visible collection agency in El Salvador is Puntual S.A. de C.V. One option for U.S companies is to work with reputable law firms that offer extra-judicial collection services. For more information about payment methods or other trade finance options, please read the Trade Finance Guide.

To access El Salvador’s ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.

Banking Systems

The Financial System Superintendency (Superintendencia del Sistema Financiero, SSF), is the independent agency that authorizes and supervises all financial institutions in El Salvador. In August 2011, the Financial System Supervisor merged with the Stock Market and the Pension Supervisor to create a single, independent regulatory agency that a Directive Council heads. The Central Bank regulates the financial system, administers international reserves, manages the payment system and financial services, and provides services to exporters and importers (Centro de Tramites de Importaciones y Exportaciones – CIEX El Salvador).

All transactions carried out in Salvadoran banks must be denominated in U.S. dollars. Market conditions set interest rates and fees. Private banks, branches of foreign banks, state-owned banks, and credit unions are authorized to collect funds from the public. The banking industry is competitive due to the presence of foreign banks and the openness of the banking law.

Commercial banking services in El Salvador are provided by twelve institutions: ten private banks and two state-owned banks. The leading private banks are: Banco Agrícola S.A. (acquired by Bancolombia); Banco Cuscatlán (formerly Citibank de El Salvador S.A); Banco Davivienda Salvadoreño, S.A. (formerly HSBC); Banco de América Central S.A. and Banco Promerica. Together, they account for approximately 95% of the Salvadoran banking sector. Banco Hipotecario and Banco de Fomento Agropecuario are government-owned, with a market share of about 4%. In addition to those mentioned above, other financial institutions are authorized to capture savings from the public, including five cooperatives and four savings and loans associations.

Foreign Exchange Controls

There are no foreign exchange controls in El Salvador. The legal tenders in El Salvador are the U.S. dollar and Bitcoin.

U.S. Banks and Local Correspondent Banks

As correspondent banking relationships often change and the Salvadoran banking sector is subject to new regulations, please consult directly with each bank or the Salvadoran Bank Association  (Asociacion Bancaria Salvadoreña – ABANSA) for the latest information.

Banco Abank

Edificio Spatium Santa Fe, Boulevard Merliot

Urbanizacion Jardines de la Hacienda

Antiguo Cuscatlan, La Libertad

Tel: (503) 2537-6000

Banco Agrícola S.A.

Blvd. Constitucion No. 100 y 1ª. Calle Pte., Plaza Las Americas

San Salvador, El Salvador, C.A.

Tel: (503)2267-9500

Banco Azul

3a. Calle Pte. No. 3952, Col. Escalón

Tel: (503) 2555-8000

San Salvador, El Salvador, C.A.

Banco Cuscatlán de El Salvador, S.A.

Edif. Pirámide Citibank, Km. 10, Carretera a Santa Tecla

Santa Tecla, La Libertad, El Salvador, C.A.

Tel. (503) 2212-3525

Banco Davivienda Salvadoreño, S.A.

Centro Financiero Banco Davivienda Salvadoreño

Avenida Olímpica No. 3550 Apdo. Postal No.: (0673)

San Salvador, El Salvador, C.A.

Tel: (503) 2256-2000

Citibank , N.A. Sucursal El Salvador

Alameda Manuel Enrique Araujo y Calle Nueva No. 1

Edificio PALIC, Segunda Planta

San Salvador, El Salvador, C.A.

Tel: (503) 2211 - 2855, Fax (503)

Banco Promérica, S.A.

Calle Chiltiupán, Centro Comercial La Gran Vía, Edif.

Banco Promérica, Ciudad Merliot, La Libertad, El Salvador, C.A.

Tel: (503) 2513-5015; Fax: (503) 2513-5105

Banco de América Central, S.A.

Edif. Credomatic 55 Av. Sur y Alameda Roosevelt y Av. Olímpica

San Salvador, El Salvador, C.A.

Tel: (503) 2247-4453

Banco Atlantida

Blvd. Constitución y 1a. Calle Pte. No. 3538, Colonia Escalón

San Salvador, El Salvador, C.A.

Tel: (503) 2206-9000

Banco Industrial, S.A.

Avenida Magnolias, Boulevard del Hipódromo, No. 144. Colonia San Benito

San Salvador, El Salvador, C.A.

Tel. (503) 2213-1717