Lost in Transaction Peru: Consumer payments trends 2022

A healthy appetite for eCommerce and eCash

With a historically low credit card adoption, Peru is a country fairly advanced in terms of digital payments. Consumers are familiar with the different APMs available and seem increasingly comfortable using them. And, as online shopping has risen – eCommerce rose 28% in 2021 – APM uptake has accelerated.

A population of 33.8 million people, it’s a largely cash-driven society that has a relatively high unbanked population compared to some other regions in Latin America – 57% unbanked compared to Brazil’s 30% and Chile’s 26%. Smartphone adoption, now at 62%, is growing and expected to reach 70% by 2025.

APMs have been around for some time. Peru has had peer-to-peer (P2P) payments in the form of Yape from Banco de Crédito del Perú (BCP), the largest bank in Peru, since 2016 – and subsequently opened up to unbanked individuals in 2020. Consumers are also accustomed to QR code services, which have been encouraged by the Peruvian Central Bank. eCash and bank transfers are popular – and, as we’ll see from our survey of 1,000 consumers in Peru in April 2022, there’s appetite for greater use.

eCash is a winner

The results of our survey bear out the fact that many people rely primarily on cash, a trend that’s related to the levels of financial inclusion in the county and consumers’ access to financial products and services through traditional banks. Our Lost in Transaction data shows that 66% of consumers in Peru think that cash is the most reliable form of payment, and 76% would be worried if they could no longer access cash.

Among respondents, 22% said they used eCash such as PagoEfectivo in the past month when paying for online purchases, nearly double the amount that used mobile wallets (12%). Our survey – which also gathered responses from consumers across North America and Europe, the Middle East and Africa (EMEA) – shows that this number is double the eCash usage recorded among North American consumers (11%), and more than double compared to respondents in EMEA (9%).

Further, 42% indicate that they use eCash more frequently or about the same amount compared to a year ago – and 67% say that if it were easy, they’d prefer to pay for online transactions in cash. Most significantly, 67% reckon they’d make online transactions more often if they could easily pay in cash, which suggests merchants making eCash options more widely available would be welcomed by the consumer and potentially drive greater eCommerce transactions.

Bank transfers have seen a distinct boost

Peruvians are also increasingly using bank transfer as a payment method, taking advantage of the speed, security, and affordability that this option provides. In our survey, 56% of consumers say they use bank transfers more frequently or about the same amount as they did a year ago. And, of the 67% of consumers who have changed their choice of payment method for online purchases due to the rising cost of living, 43% are using direct bank transfers more often – second only to debit card payments, which 54% said they’re using more often. This could in part be related to avoiding transaction fees, as well as increased availability of bank transfer options from merchants.

Finding the right balance

In the security versus convenience debate, consumers welcome some hurdles in the name of security, but not to the point of inconvenience. Only 19% would accept as many security measures as necessary, even if it makes online payments less convenient. While 45% of respondents would like to keep the current balance between security and convenience, which may include a second verification step such as a code received by text, a phone call, or similar.

Security-consciousness drives payment choices

When talking about security of personal information, however, there’s a definite air of concern. Our data shows that 46% of consumers consider security the most important factor when choosing how to pay for an online purchase. And they don’t mind having to go through extra steps to ensure their transactions are secure – 76% feel anxious when they’re not asked to provide any security information, like a password, when making an online payment.

But there’s some hesitation around disclosing financial information: 43% prefer using payment methods that don’t require them to share their details online and 69% don’t feel comfortable entering their financial data online. A significant 82% feel more comfortable using a payment method that doesn’t require them to share their financial details with merchants when they shop online.

Peruvians’ stance when it comes to security is clearly reflected in their increasing use of eCash and bank transfers. These payment methods directly address consumers’ concerns around safety and don’t require sensitive financial information to be shared online or with third parties.

Market maturity with potential

As our Lost in Transaction survey results indicate, the market for APMs is relatively mature in Peru in comparison to the rest of Latin America, with consumers finding digital payment methods attractive for a number of reasons, not least their security and accessibility. There’s also scope for growth as mobile adoption rises, and as a result of consumers’ willingness to use options such as eCash if it were more widely available.

In a nutshell, Peru presents interesting country dynamics with a significant opportunity for merchants that have the right payment methods in place – ones that are inclusive, convenient, affordable, and secure.