Opening a Nationwide Mobile Wallet

Peru’s banks push through a unified digital payment system.

Cuzco, Peru.

Cuzco, Peru.

Photographer: Dado Galdieri/Bloomberg

Four in five Peruvians don’t have a bank account, but in a country of 30 million people, there are about 32 million cell phones. So the leading Peruvian banks have teamed up to get money moving through those phones. On Dec. 15, Peru Digital Payments, a company owned and operated by the country’s leading financial institutions, launched Bim, a mobile payment program that unites all their online customer interfaces on one system.

“We want this program to reach the people who don’t have bank accounts,” says Carolina Trivelli, who’s overseeing Bim and previously ran the government’s development ministry. “That’s the woman who lives in the countryside and has a nine-key cell phone, a 2G connection, and a prepaid phone plan.”

Peru’s software is the first of its kind: While there are 255 mobile money programs in 89 countries around the world, no other program includes all of a country’s banks, and the majority allow transactions only between customers of the same phone company. By February all three major Peruvian carriers will offer users access to Bim.

The software works with relatively low-tech cell phones—only a quarter of those in Peru are smartphones—and features a simple menu with numbered options, such as buying voice minutes or sending money to someone for a 15¢ fee. To better work with basic phones and keep transactions secure, Bim sends data over voice channels, much like SMS text messaging.

Once customers begin using Bim, the bank hosting their account will be able to establish credit scores for them and start pitching loans and other products, says Trivelli. Peru’s program was funded at first by $10 million split among 34 of the country’s financial institutions and aims to attract 5 million users within five years.

Some of Peru’s biggest companies, including beermaker Backus & Johnston, have signed up to start using Bim for transactions with retailers beginning in March. Backus, a subsidiary of SABMiller, collects mostly cash payments weekly from 115,000 bodegas and small shops, many high in the Andes or near the Amazon. “Dealing in cash requires a lot of processing by hand, expenses, and risk,” says Luis Guzman, the company’s treasurer. “Each year we receive over 15 million coins.”

Bim may cut down on loose change and the threat of robbery or passing off counterfeit money, but the 15¢ charge for remittances will feel steep to the poorest Peruvians, says Jeffrey Bower, a United Nations digital payments specialist who’s advised Peru’s program. The interface’s security and low-tech approach can also be annoying to smartphone users familiar with the ease of switching among apps. The connection to the payment server drops out if you swipe to another screen—say, to find the phone number of the person you’re paying or the e-mail that says how much you owe. Trivelli says she’s negotiating with carriers to lower transaction costs and expects eventually to develop a more sophisticated app for smartphones.

To catch on, the network will need continued development, aggressive marketing, lots of retail partners, and a brick-and-mortar network of distributors who help people buy and redeem electronic money. “What we know is that it is not an easy business,” says Mireya Almazan, a manager of the mobile development program at GSMA Mobile, a group that represents mobile operators and related companies worldwide.

But the system has a lot going for it. “No other country in the world has all of those pieces in place, with the right kinds of partnership and the right kind of momentum, to push things forward,” says the UN’s Bower. “Hopefully, Bim will be more successful at reaching all Peruvians across the country, making a significant impact on increasing financial inclusion nationwide.”

The bottom line: Peru’s banks and carriers aim to get one-sixth of the country’s 30 million citizens using their mobile money program in five years.

(Updated seventh paragraph to correct spelling of Jeffrey Bower's name.)

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