Digital wallets

What's behind the success of Yape, the peer-to-peer mobile payments app backed by Peru's largest bank?

Yape is a peer-to-peer payments mobile app developed in 2016 by the Banco de Crédito del Perú (“BCP”) which allows to transfer money with the only requirement of knowing the phone number of the recipient.

A country manager at PayU explained, “Yape is like the Brazilian firm PIX, it’s an electronic wallet that allows you to pay for things or make immediate transfers to other cell phone numbers that have a Yape account. It reduces or eliminates many costs such as the interchange fee and the acquire fee.”

“Yape is like the Brazilian firm PIX, it’s an electronic wallet that allows you to pay for things or make immediate transfers to other cell phone numbers that have a Yape account.”

Country manager, PayU, Peru

BCP developed the app to enhance its digital strategy and satisfy the demands of a 36% of its clients considered digital natives. Amid the Covid-19 pandemic, the app grew seven-fold its original size, registering 6.2 million users, 62% of Peru’s banked population.

The other opportunity for Yape is to attract the 50% to 55% of people in Peru who do not have a bank account. A BanBif executive explained, “Yape doesn’t want to be seen as a bank, its target customer is the person who uses cash and has a smartphone, regardless of age, profession or location. In rural areas, the use and penetration of broadband and smartphones has increased a lot in recent years.”

Fintechs like Yape have driven financial inclusion in Peru, and also across Latin America, during the pandemic, which has driven the use of mobile and contactless technologies. Part of Yape’s success also stems from its decision, following the COVID-19 outbreak, to open accounts to any user with a Peruvian ID, without the need of being a BCP account-holder. It also helps to have one of the largest banks in Peru backing you, the BanBif executive commented, “Yape grew 7x last year, with BCP’s backing, it isn’t a startup struggling to raise money, it already has a high market share and a strong brand recognition.”

“Yape grew 7x last year, with BCP’s backing it isn’t a startup struggling to raise money, it already has a high market share and a strong brand recognition.”

Executive, BanBif, Peru

Yape has grown with the support of BCP and the State, but after lifting most requirements to create an account, the app aims to develop solutions for big merchants, housing services and charge mobiles. Luis Alfonso Carrera, CEO of Yape, aims to convince all banks in Peru to team-up with Yape.

The success of Yape helping to step-up inclusion in Peru has been supported by the government’s initiative to promote a digital savings account, known as DNI, that only requires a national ID card and a mobile phone number for registration purposes. DNI will allow users to carry out transfers to other accounts while being used as an electronic wallet.

It is hoped that over 14 million Peruvians will gain access to a formal financial system for the first time.

 

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