Digital wallets and cards are gaining ground in Latin America. Thus, more and more people are banked. This trend applies nationwide, with 16% of Peruvians preferring to make in-person purchases with digital wallets and 52% with cards, according to a recent survey by McKinsey & Company.
This increase in preference for alternative payment methods to cash is in line with a growth in banking use. While in 2019 only between 30% and 50% of Latin Americans had a bank account, in 2021 the figure rose to 72%.
Something similar happened in Peru, while in 2019 only 43% of Peruvians were banked, in 2023 58.6% had a bank account, according to INEI figures. This increase in banking use was evidently driven by new payment proposals, such as digital wallets, and by the pandemic.
However, this trend was not promoted by the same factors in all countries. Although in Peru, Argentina, Colombia and Panama, digital wallets promoted financial inclusion, in Chile, Ecuador, Guatemala and the Dominican Republic, banking access was mainly influenced by debit cards.
Cash loses ground: only 29% of Peruvians prefer to use it
Only 29% of Peruvians would choose cash as their preferred payment method for in-person transactions, according to McKinsey & Company. In two years, the debit card replaced cash as the preferred payment method in Latin America, reducing it by approximately half, while the preference for a different method (credit, debit cards, or digital wallets) doubled.
Cash is losing ground, but will remain relevant in the medium term, particularly for lower-income segments. Although it is known that 65% of Peruvians used cash in the last 30 days, only 29% stated that it was their preferred means of payment. At the regional level, these figures correspond to 70% and 30%, respectively.
This is due to the fact that many businesses still only accept cash and the high prevalence of informality. However, it was also recorded that in countries where more businesses tend to have their QR codes on display, the use of mobile payments is greater, while the use of QR codes is lower in countries where people are more accustomed to paying. with a physical card.
Source: Larepublica
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