CONCEPCION — Concepción in northern Colombia has become the country's first town to practically say goodbye to bank notes, instead embracing online payments for even the most ordinary transaction. When the town's 4,500 residents make purchases, they pay using their mobile phones. They are local pioneers of an expanding global trend, and apparently ahead of even countries such as Denmark, which is considering banning cash transactions in some shops and businesses starting next year.

Concepción calls itself a "welcoming land where nobody is an outsider," and that seems especially true when you can visit without any cash. It all started as part of a pilot program intended to bring "ordinary folk" and small businesses into the official economy and banking system. The initiative is backed and financed by the public sector Banco del Comercio Exterior, banking syndicate Asobancaria and the private bank Davivienda.

The curiosity in this little town is the coexistence of 21st century payment methods with its 19th century roads. It takes more than two hours to get here by bus from Medellín. The paved highway runs as far as the neighboring town of San Vicente, south of Concepción, and then devolves into a dirt track. Another route here is through Barbosa, though part of this road is dangerous in winter.

"Every project has its benefits and difficulties," says Concepción Mayor Gustavo Alonso López, who adds that the town got its first ATM thanks to the program. One problem, however, is that "cell phone reception is not so good here," he says. There are few choices for operators and signals are weak.

But motorbike-taxi driver Uriel Avendaño says he has had no problems so far getting paid by customers. "I've found it easy charging passengers with cell phones," he says. "I just have to give them my phone number and you're done. I then get a phone message saying my 2,000 pesos ($0.73) for the ride are in my bank account. I don't have to carry bills around."

Frequent electronic banking also gives customers easier access to credit. "The bank has a record and, on that basis, in all the financial entities we can start giving better services to families," says Efraín Forero, president of Davivienda. They will no longer have to resort to shady, high-interest loan sharks.

The residents of Concepción — also known as La Concha — are even starting to forget the faces on Colombian bank notes. Nora Marín, a 55-year-old woman working in juice processing, can't immediately recall the mustached gentleman who appears on a 20,000 pesos ($7.30) bill. The answer is Julio Garavito, once one of the country's prominent mathematicians and astronomers. But she knows perfectly well how to use the banking application through which her modest wages are paid, and even shows her clients how to work it.

The mayor of Concepción has himself come to illustrate the comparative safety of this online system. "I went to the district of Rionegro to claim a significant sum of money from the town, and some thieves thought I had the money in the car," he recalls. "But they couldn't take any, as it was in the cell phone. They did take the phone, but the money stayed in the bank."