The recent difficulty in using foreign bank cards (US, European, etc.) at Cooperative ATMs (like JEP, Pilahuin TÃo, or Alianza del Valle) is not a random technical glitch. It is the result of a significant regulatory overhaul that reached a critical implementation phase on March 1, 2026.
1. The “Tax Wall”: SRI Resolution No. NAC-DGERCGC26-00000009
The most immediate cause is a new tax directive from the Internal Revenue Service (SRI). As of March 1, 2026, the government updated the income tax withholding rates at the source.
- The Burden: Financial institutions are now required to act as “withholding agents” for a wider variety of digital and card-based transactions.
- The Problem for Co-ops: Unlike large commercial banks, many smaller cooperatives do not have the automated accounting infrastructure to calculate, report, and remit these specific tax withholdings for “cross-border” transactions (foreign cards) in real-time.
- The Choice: To avoid heavy fines for non-compliance with the new SRI rules, many cooperatives simply disabled the “international gateway” on their ATM software.
2. The “Bank-or-Bust” Law: Organic Law on Public Integrity
Passed in late 2025, this law fundamentally changed how large cooperatives are viewed by the state.
- Systemic Risk: The law identifies large cooperatives as “systemic risks” and mandates that those of a certain size must convert into private banks or face extreme oversight from the Superintendency of Banks (rather than the more lenient SEPS).
- Strict Compliance: To stay under the radar or maintain their cooperative status, many are stripping away “complex” services—like international interoperability—that trigger higher levels of scrutiny from the UAFE (Anti-Money Laundering Unit).
3. Updated Anti-Money Laundering Regulations (2025/2026)
In July 2025, a new Organic Law on the Prevention of Money Laundering came into effect, with technical requirements that became mandatory in early 2026.
- Due Diligence: The law requires “real-time” due diligence on the origin of funds for transactions involving foreign entities.
- The Cost of Entry: Maintaining a connection to international networks like Plus (Visa) or Cirrus (Mastercard) now requires co-ops to implement expensive, AI-driven monitoring tools to satisfy these new legal standards. For most cooperatives, the cost of this technology outweighs the profit they make from tourist ATM fees.
Summary: What this means for you
If you are using a foreign card, you have moved from a “universal access” system to a “tiered” system:
| Institution Type | Status for Foreign Cards | Reason |
| Private Banks (Pichincha, Guayaquil, etc.) | Working | Have the budget for the new tax & AML software. |
| Large Co-ops (JEP, etc.) | Hit-or-Miss | Many are disabling access to avoid “Bank” classification. |
| Small/Local Co-ops | Blocked | Cannot comply with the March 2026 SRI reporting rules. |
Advice: Always look for the Banco Pichincha (Yellow) or Banco Guayaquil (Magenta) ATMs. They are the most compliant with the new 2026 laws and remain the most reliable for international travelers and expats.
