Peruvians use less and less cash, according to the World Bank

The debit card usage rate more than doubled in Peru, going from 9% in 2019 to 20% in 2022. Meanwhile, the use of cash as transaction value dropped to 37% last year, when in 2019 this rate rose to 60%according to World Bank figures.

During the 2019-2022 period, according to a study by the Global Payments Report (GPR), the Peruvian market evolved favorably towards digitization and as a result of this context, the formalization of finances and the incorporation into the financial system by users. It has also been growing remarkably.

In this context, an opportunity arises for the startups In the process of launching and developing, take advantage of this wave of digitization by offering a greater variety of cards, such as credit, debit and prepaid for all types of users; not only to facilitate the operation of clients, but also to contribute to the formalization of the Peruvian economy.

According to Carlos Marín, Country Manager of Pomelo in the Andean region, which develops technological solutions for businesses in the process of digital transformation to launch and scale financial services in Latin America, The first thing to take into account when launching a card for startups is to define it according to the type of client and their respective needs.

The expert shares some good practices to keep in mind:

• Give loans with their own capital through credit cards so that users can make purchases with a certain limit available.
• Distribute own funds through prepaid cards with an exclusive purpose.
• Provide gift cards in order to promote customer loyalty or gift cards that already have a fixed amount to spend and do not allow recharges.
• Link credit cards to crypto wallets with which the user can access ATMs and make purchases.
• Manage corporate expenses in the organization through credit and prepaid cards.

The steps towards card issuance

Once the product specifications and the regulatory context have been defined, it will be possible to work on the integration process. By now, it will be clear whether the product needs to be regulated or not, depending on whether it is a credit, debit or prepaid card issue. Therefore, the technological capacity of integration and implementation of the business will be reviewed.

“When we mention technical capabilities, we mean that there are companies that make this step easier since they have a superior technological base. Those that do not have it, should verify their development environments to facilitate the process in the shortest possible time”, Marín details.

In a final stage of the issuance process, it will be important to align the design with the branding of the brand. In addition, it will be necessary to focus on the integration process with different providers, such as embossers and couriers, and manage the use of the financial license.

“In order to guarantee compliance with all the rules that are required by the franchises, a Project Management process will be required. Once approval of compliance with all rules is obtained, we can talk about an average time of three months for the issuance of the physical card, for the virtual ones we are talking about a couple of weeks”concludes the expert.

In conclusion, the issuance of Credit cardsdebit or prepaid requires various stages and above all certified advice in all aspects of the project, so that the process concludes without wasting time or money.