From Lidia to the QR code: Peru’s digital payment shift
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People in Peru increasingly used digital payments during the first half of this year, completing more than two transactions per adult each day.
The kingdom of Lidia, in modern-day Turkey, invented coins in the 7th century BC, establishing a system for valuing goods and facilitating trade that quickly spread to Greece. Economists note that changes in monetary systems have historically shaped civilizations. Peru is now experiencing a surge in digital payments.
The Central Reserve Bank of Peru (BCR) reported that digital payments surpassed two daily transactions per adult for the first time. Ten years ago, a person in Peru made approximately 29 digital transactions annually, now they complete 767, with 575 of those made using aliases like Yape and Plin. Despite this growth, cash remains popular in Peru. The amount of physical currency in circulation increased by over 15% this year, particularly in larger denominations.
Analysts suggest this may be linked to the informal and illegal economies, as people with limited access to banking may prefer to keep cash on hand. Digital payment adoption varies among populations, with those holding university degrees being more likely to use digital payments (70.5%) than those with only primary education (26.6%).
The BCR is furthering this change by launching a new retail payment platform called TAPP, inspired by a system in India, and the increasing use of artificial intelligence in payment systems is expected to accelerate innovation and access to credit. The BCR expects these developments will continue to transform Peru’s financial landscape over the next five years.
