Ela Oblak

Posted on Sep 11

FLIQA'S Second Interim Project Report

#progressreports

Brief Project Description

FLIQA uses open banking to enable direct account-to-account payments, helping businesses reduce costs, eliminate intermediaries, and manage finances more efficiently. Users enjoy greater transparency and security with every transaction.
By integrating the Interledger Protocol alongside traditional banking infrastructure, FLIQA aims to improve interoperability between different payment systems and expand access to modern payment infrastructure for SMEs and underserved communities.

Through Open Payments APIs, the platform supports new payment flows across currencies and ledgers, providing a secure, low-cost alternative to card- and cash-based payments while giving businesses greater control of their funds.

Project Update

Months 5-8 marked an important time for the project: Interledger moved from being an additional account type in our data model to becoming a payment method users can choose, price, and complete. To support this transition, we rebuilt the FLIQA payment dialog around the Open Payments flow, extended the backend and the Payment/Service API to treat payment type as a first-class dimension, and introduced an ILF Sandbox so that partners and merchants can see and test the flow end- to- end without any production dependency.

In parallel, we concentrated our business and market development efforts primarily on Colombia. We conducted a detailed assessment of the Colombian regulatory environment for fintechs and financial institutions - including the transition towards a mandatory Open Finance regime under Decree 0368 of April 2026, the licensing perimeter of the Superintendencia Financiera, the position of small community banks and savings-and-credit cooperatives, and the operating conditions facing micro, small, and medium enterprises. We also assessed the practical requirements and implications of establishing a foreign fintech business in the market.

The most significant milestone of the period is that we made first contact with Bre-B, Colombia's interoperable instant payment system operated by Banco de la República. We connected to the Bre-B sandbox and successfully performed a manual payment initialisation. This is the first time FLIQA has touched a Colombian domestic payment rail directly, and it opens a credible path to offering ILP-based and domestic instant payments side by side within the same checkout.

The honest counterpoint is that the UAE workstream remained deprioritised through this period. The geopolitical conditions identified in our previous report have not improved. We therefore made a deliberate decision to concentrate our engineering and commercial resources on Colombia rather than divide capacity between two markets.

Project Impact & Target Audience(s)

Our target communities are underserved individuals and micro, small, and medium enterprises (MSMEs) in Colombia. The groups that ultimately benefit include Women & Girls, who remain measurably behind in both access to and active use of financial products in Colombia; Black, Indigenous, and People of Colour, particularly Afro-Colombian and Indigenous communities in rural departments where exclusion is deepest; People with disabilities, for whom a digital-first, device-independent payment flow removes the need to reach a physical branch; and informal-economy participants and rural populations with no bank branch within reach.

What changed in this period is that the impact case moved from argument to mechanism. Colombia's headline inclusion figure is high - roughly 96% of adults hold some deposit or credit product - but the distribution behind it is what matters for our work. Rural access sits around 66% against near-universal urban access, and active use falls to roughly 53% in rural areas against about 89% in urban ones. A persistent gender gap of several percentage points runs through both access and use. Meanwhile, more than 70% of transactions in the country are still made in cash. The problem is therefore not primarily account ownership; it is that a very large number of people and micro-businesses hold an account they cannot but cannot use it practically for transactions, at a price they can accept, in the places they live and trade.

This period’s work translates to that. Showing the fee to the user before they authorize a payment is not cosmetic: for a merchant with thin margins and for a payer sending a small amount, an unpriced payment is an untrusted payment. Removing the country-and-provider selection step in favor of direct provider selection reduces the number of decisions a first-time or low-confidence user has to make. Accepting a Payment Pointer as an input, with validation, means an ILP identity is now something a Colombian merchant can be paid through without understanding anything about the protocol behind it. And the Bre-B connection means we can put an interoperable, effectively free-to-end-user domestic rail next to the ILP rail in the same interface, which is the practical form financial inclusion takes in this market.

On the institutional side, our regulatory research identified a specific and underserved constituency that we had not fully appreciated at the outset: Colombia's savings-and-credit cooperatives and small community financial institutions. Around 171 cooperatives carry out financial intermediation in Colombia, serving over four million members, employing close to 14,000 people, and operating across 23 of the country's 32 departments. In roughly 40 municipalities, a cooperative is the only financial intermediary with any physical presence at all. Because most of these entities sit under the Superintendencia de Economía Solidaria rather than the Superintendencia Financiera, they fall largely outside the perimeter of the mandatory Open Finance regime and are slower to appear in the national instant-payment ecosystem. That is precisely the gap an interoperable, ledger-agnostic protocol is built to close, and it has become an explicit part of our Colombian impact thesis.

Progress on Objectives, Key Activities

1. Product: a payment dialog rebuilt for Interledger

Our first report described extending the data model to hold Open Payments accounts and payment pointers. In this period, we took the next step and altered the user-facing payment dialog so that an ILF payment is a first-class option rather than a special case added onto an open-banking flow. Three changes were necessary:

Direct provider selection at the start of the payment. Previously, a payer had to select a country and then a provider before anything else could happen - a sequence that makes sense for bank-based open banking but not for Interledger, where the provider is not tied to a jurisdiction. The payer now selects the provider directly when the payment is initiated.
Display the fee to the user. The dialog now displays the applicable fee before the payer authorizes the payment. This is a transparency requirement we consider non-negotiable for the communities we serve, and it is also what allows a payer to make a genuine comparison between an ILP payment and the alternatives available to them.
Payment Pointer as a direct input, with validation. The payer can enter a Payment Pointer as the destination, with format and resolution checks performed at entry, so that errors are identified immediately rather than at settlement.

Taken together, these changes mean the Open Payments flow is now materially shorter and clearer than our standard open-banking flow, which is a useful demonstration.

2. Backend and API: payment type as a first-class dimension

Supporting these changes required corresponding changes to the underlying infrastructure. We altered the payment providers table to hold the supported payment types and altered the provider service to filter providers by that type. On the Payment API and Service API, we exposed the listing of payment providers by payment type - Open Banking, ILF, and future types - so that any client of our API can retrieve exactly the set of providers relevant to the rail it intends to use.

This is deliberately generic. It means adding a further rail - Bre-B being the immediate candidate - is a matter of registering a payment type and its providers rather than a further round of interface changes

3. ILF Sandbox (additional effort beyond the original scope)

We added an ILF Sandbox for demonstration and testing purposes. This was not in the original plan and represents additional effort taken on during this period, but it proved necessary: partners and prospective merchants consistently asked to see the flow before committing, and integrators need a non-production environment to work against. The sandbox demonstrates the complete ILF payment flow and materially eases integration for third parties, streamlining subsequent partner and integration discussions.

4. Colombia: first steps on the Bre-B integration

Bre-B is Colombia's interoperable instant payment system, operated by Banco de la República. Its interoperability and settlement mechanism went live on 23 September 2025, with the system fully opening on 6 October 2025, with 227 participating financial institutions. Users transact through "llaves" - simple aliases that stand in for full account details - and the system runs 24/7. Adoption has been rapid: by mid-2026, the ecosystem had registered well over 100 million keys and around 35 million linked users, processing approximately five million operations per day, and transfers are free to end users until at least 2028.

During this period, we connected to the Bre-B sandbox and manually performed a payment initialization. This validates FLIQA's ability to connect to the rail and gives us a concrete basis for the next stage of work. The immediate next steps are to offer Bre-B as an additional payment tier on the FLIQA Point of Sale, and to integrate it into the FLIQA sandbox environment alongside the ILF Sandbox so that the two rails can be demonstrated and tested side by side.

The strategic point for the Interledger community is that this is not a competing choice. Bre-B is an excellent domestic rail but is not designed for cross-border payments; Interledger addresses the cross-border use case. A merchant checkout that can present both, priced transparently and selected by the payer, is a stronger argument for Open Payments in Latin America than either rail alone.

5. Colombia: regulatory and business-environment assessment

A substantial share of our effort in Months 5–8 went into understanding, in detail, what it would take to operate in Colombia. The findings below shaped both our product decisions and our go-to-market sequencing, and we share them here because we believe they are useful to other Interledger grantees considering the region.

5.1 The supervisory perimeter and licensing

Colombia does not have a single, dedicated "fintech licence". Activities are regulated by what an entity does rather than what it calls itself, and the Superintendencia Financiera de Colombia (SFC) supervises every entity that takes funds from the public. The relevant regulatory structure is:

SEDPE (Sociedad Especializada en Depósitos y Pagos Electrónicos) — the e-money and electronic deposits licence. It permits deposit-taking, electronic deposit accounts, and card issuance, but explicitly prohibits financial intermediation, i.e., lending. Minimum capital is in the order of 2 million USD.
Compañía de financiamiento — an intermediate tier that may both take deposits and lend.
Establecimiento bancario — a full banking licence, with minimum capital in the order of USD 30 million.

Authorisation typically takes over a year. Separately, Decreto 1692 of 2020 governs low-value payment systems and the acquiring activity: it opened acquiring to new entrants, defined the distinct roles in the payment chain, and set governance and access-transparency obligations for payment system administrators and payment service providers. For FLIQA, the significant conclusion is that a properly structured partnership model - operating alongside a licensed local entity rather than seeking our own deposit-taking licence - is not only faster but also the more appropriate regulatory approach for our business model. This is a direct validation of the KAMIN partnership strategy set out in our first report.

5.2 Open Finance: from voluntary to mandatory

The most consequential development of the reporting period is that Colombia moved its Open Finance framework from voluntary to mandatory. Decree 0368, signed on 7 April 2026, establishes a mandatory Sistema de Finanzas Abiertas covering entities supervised by the SFC - credit institutions, SEDPEs, trust companies, brokers, pension fund managers, insurers, and collaborative financing entities. It rests on the principle that the data belongs to the user rather than to the entity holding it, and requires prior, express, informed, and revocable consent, with the receiving entity separately confirming authorisation before it accesses data.

The implementation runway matters for our timing: the SFC has up to six months from the decree to publish technical standards, up to twelve months to launch the participant directory, and obliged entities then have a further twelve months (extendable by six) to enable data access. In other words, the operative APIs land well after our grant period, and any Colombian deployment inside the grant window must be built on today's bilateral and partner-mediated arrangements rather than on the mandatory regime.

Two features of the final decree are directly relevant to us and were not present in the draft. First, payment initiation was structurally separated from the Open Finance framework. Colombia has therefore mandated data sharing but not payment initiation, which leaves initiation to be arranged contractually - and leaves a gap that an interoperable payment standard could help address. Second, the final text dropped the requirement that data recipients also act as data providers and removed the trusted-third-party verification layer, which lowers the barrier to participation for a company in our position. Colombia is behind Brazil on Open Finance maturity but is moving faster than Mexico or Chile, which we read as a favorable window.

5.3 Small community banks and cooperatives

Colombia's community-level financial institutions are structurally distinct from its banks, and this emerged as one of the more important findings of our research. Financial intermediation at the community level is carried out largely by cooperatives, split into two supervisory regimes: cooperativas financieras, which fall under the SFC, and the much larger group of cooperativas de ahorro y crédito, which fall under the Superintendencia de Economía Solidaria. Around 171 such entities operate, with more than 4.2 million members - a gain of over 600,000 in five years - nearly 14,000 employees, and coverage across 23 of the 32 departments. In approximately 40 municipalities, the local cooperative is the only financial intermediary with a physical presence.

Because most of these institutions sit outside the SFC perimeter, they are largely outside the scope of the mandatory Open Finance regime and are slower and less well-resourced to connect to national payment infrastructure. They serve exactly the rural, low-income and Indigenous populations the grant targets, and they have neither the technical capacity nor the regulatory obligation to build interoperability themselves. We regard this as the clearest institutional opportunity for Open Payments in Colombia, and we will develop it further in the remainder of the grant.

5.4 Conditions for micro, small and medium enterprises

MSMEs represent the demand side of our Colombian case. They constitute roughly 98% of the country's business landscape and generate approximately 80% of national employment. Of the more than 300,000 new productive units registered in 2024, over 99% were microenterprises. Yet fewer than 30% of MSMEs access formal credit, according to Bancóldex, and a significant proportion remain at a basic stage of digitalization, according to the Ministry of Commerce, Industry and Tourism. Closure rates within the first five years are high, and financing access is a principal cause.

The consequences for payment acceptance are concrete. A microenterprise operating largely in cash, with no formal credit history and limited digital tooling, cannot absorb card-scheme merchant fees, cannot wait days for settlement, and is unlikely to complete a complex onboarding process. An account-to-account payment with transparent pricing, low fees, immediate settlement, and a short onboarding process is not a marginal improvement for this segment - it can determine whether a business can accept digital payments at all. It is also the mechanism by which a business begins to build the transaction record that eventually unlocks credit.

5.5 Conditions for foreign entrants

For a foreign company, Colombia is welcoming from a company-law perspective but demanding from a financial-regulatory perspective. Establishing a local vehicle - most commonly a Sociedad por Acciones Simplificada, or a branch of the foreign parent - is relatively straightforward and can be completed quickly, and foreign capital may hold full ownership. The friction lies elsewhere: foreign investment must be registered with Banco de la República under the exchange-control regime, and payment flows are subject to foreign-exchange reporting obligations that a payments business must design for from the outset rather than retrofit. Beyond the formalities, the main constraints remain those we identified in our first report and which this period's research confirmed: the SFC authorization timeline, the depth of incumbent relationships in merchant acquiring, and the practical impossibility of building institutional trust from outside the market at the speed a grant timeline requires. All of this continues to point to the partner-led entry model we have adopted.

6. UAE and Pay10 — status

Our first report scheduled the integration of Pay10's APIs for Month 8. That work has not proceeded. The geopolitical conditions in the region that we flagged in May have not eased, and rather than commit engineering resources to an integration whose commercial counterpart we cannot yet schedule with confidence, we held the UAE workstream at low intensity and redirected that capacity to Colombia and to the platform work described above. We want to be transparent with the Foundation that this is a real deviation from the month-by-month plan in our first report, not a reframing of it. Our assessment is that the platform work delivered instead — the payment dialog, the payment-type architecture, the sandbox — is rail-agnostic and directly reusable when the UAE integration does proceed, so the deviation delays rather than eliminates the value of this work.

Communications and Marketing

FLIQA continues to grow primarily through direct conversation - networking events and direct engagement with partners, merchants, and industry stakeholders - while becoming more intentional about sharing our work publicly through LinkedIn posts, website updates, and other content focused on open banking, digital payments, and financial innovation. Our journey is documented on LinkedIn and on our website, in both English and Slovenian.

We continued to use LinkedIn as our primary public communications channel, publishing content around open banking, Pay-by-Bank, payment interoperability, digital payments, and the broader development of the European payments ecosystem. These posts helped us communicate the project's progress beyond direct partner conversations and create a public record of our work. link

We also use Instagram to communicate topics related to open banking, digital payments and payment infrastructure through visual and accessible content, with the aim of making concepts that can be technically complex easier to understand. On LinkedIn, we similarly aim to make discussions around payment protocols, interoperability and financial innovation accessible to a broader audience, rather than communicating only to people with a technical or financial background.

Our public communication is complemented by direct conversations with partners, merchants and other industry stakeholders. These conversations help us understand which aspects of Open Payments and Interledger require further explanation and inform how we communicate the technology and its practical benefits more clearly.

Where relevant, we also used events and industry networking to communicate FLIQA's work and establish conversations with potential partners in the markets we are exploring. link

The ILF Sandbox added in this period also serves a communications purpose: it gives us something concrete to show rather than simply describe when we introduce Open Payments to a prospective partner, which has already changed the character of those conversations.

Taken together, these activities have allowed us to combine direct partner engagement with a more consistent public presence, while using the product and sandbox itself as practical communication and demonstration tools.

What's Next?

The remainder of the grant period is where the work moves from platform capability to deployment and validation in Colombia.

Bre-B as a payment tier on the FLIQA Point of Sale. Building on the successful sandbox initialization, we will expose Bre-B as an additional payment tier at the point of sale, alongside open banking and ILF payments.
Bre-B in the FLIQA sandbox environment. Integrating Bre-B into our sandbox so that merchants and integrators can test the domestic instant rail and the Interledger rail in the same environment.
KAMIN API integration to gain access to local payment rails and expand our merchant reach in Colombia.
Completing the GateHub integration, including automated payment pointer acquisition and sandbox/test wallet configuration.
Colombian pilot with our first merchants, validating the end-to-end flow in a live environment. This remains the central deliverable of the grant.
ILF and Open Payments visibility on the FLIQA website and tenant portal.

In the UAE, our position is that we will resume the Pay10 integration when regional conditions allow, but not within this grant window. We would rather deliver one credible pilot in Colombia than two incomplete ones.

Community Support

Our ask from the first report stands and has become more specific. We are looking for an introduction to a Colombian merchant - or to someone who can introduce us to one - willing to take part in the testing phase of our product. We need a partner who can help us verify the integration workflow, the payment flow, and the overall merchant experience in a real environment before we expand the rollout.

Two further asks have emerged from this period's work:

Contact with Colombian savings-and-credit cooperatives or community financial institutions, or with the bodies that represent them. As set out above, these institutions serve the populations this grant targets, sit outside the mandatory Open Finance perimeter, and lack the capacity to build interoperability alone. If anyone in the Interledger community has a relationship in Colombia's cooperative financial sector, an introduction would be genuinely valuable.
Experience of running Open Payments alongside a domestic instant payment rail. We are about to present Interledger and Bre-B as parallel options in the same checkout. If another grantee has done something comparable - with Pix, UPI, SPEI or similar - we would welcome a conversation about what worked, particularly on how the choice was presented to the payer and how fees were communicated.

Additional Comments

One observation from this period may be useful to the Foundation more broadly. Colombia has just mandated open data sharing while deliberately leaving payment initiation outside that mandate. The country has simultaneously built a fast, free, high-adoption domestic instant rail in Bre-B. The combination creates an unusual opening: there is a regulated appetite for interoperability, a proven public willingness to adopt new payment rails, and no mandated standard for initiation — which is precisely the space Open Payments is designed to occupy. We therefore see Colombia as one of the more favourable jurisdictions for Interledger adoption in Latin America over the next two years, and we would be glad to share our regulatory research with other grantees working in the region.