News Story

Paraguay Advances Payments Sector Reform with New Legal Framework and Market-Shaping Reforms

Paraguay’s digital payments ecosystem has long faced structural challenges — from an outdated legal framework to limited competition in the cards market. These barriers have slowed innovation and limited the potential of digital payments to drive financial inclusion and economic growth.

Through an F4D-supported grant, the Central Bank of Paraguay addressed these challenges head-on. With World Bank support, Paraguay drafted a new Payments System Law, enacted on June 27, 2025, that embeds competition, interoperability, innovation, and inclusion as the core principles guiding the national payments ecosystem.

Complementary work assessed the performance and design of the fast payments system, drawing on international benchmarks to identify new use cases, participation models, and pricing approaches that can enhance private-sector participation and expand adoption.

In parallel, a comprehensive review of the cards market identified the factors restricting competition and proposed measures to lower merchant fees and enable fairer market entry — critical steps for improving acceptance and usage. The program also supported the development of national QR standards, creating an interoperable merchant payments framework and reducing fragmentation across the ecosystem.

Impact

These deliverables are already shaping reforms on the ground. The new Payments System Law and its supporting regulations provide market participants with greater legal certainty and introduce a coherent, forward-looking framework for payments oversight. The analysis of the fast payments system has guided improvements in operations and governance, paving the way for new features and broader participation. The introduction of national QR standards is enabling more universal acceptance of digital payments, particularly among micro and small merchants, while the cards market assessment offers regulators concrete recommendations to strengthen competition and lower costs. The country’s fast payment system has grown rapidly, processing nearly 28 million transactions in June 2025 alone—more than in all of 2022, its first year of operation.

The Central Bank of Paraguay is now advancing implementation of the new regulatory framework and pursuing additional enhancements to the fast payments system, including the adoption of new technologies, like QR codes.

The analytical and legal work carried out through the F4D-supported grant also informed the Paraguay – Private Sector-Led Growth and Jobs Development Policy Loan, where the new Payments System Law was included as a formal prior action recognizing its importance for innovation, competition, and financial inclusion.

Together, these efforts are laying the foundation for a more open, competitive, and inclusive digital payments environment across Paraguay.

We are deeply grateful to the World Bank and the Finance for Development for their invaluable technical assistance, which played a key role in advancing critical regulatory reforms — including the National Payment System Law, interoperability standards, payment initiation, fraud prevention, among others — that are shaping a more inclusive, competitive, and secure payment ecosystem in Paraguay.”

— Diego Legal Cañisa, Deputy General Manager of Financial Operations, Central Bank of Paraguay

For More Information

View the World Bank Blog: Paraguay's path to inclusive digital finance: New milestones, new horizons by Guillermo Galicia Rabadanjean & Michel Lobet