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Summary
- Yape is the leading mobile payments platform in Peru, launched in 2016 by Banco de Crédito del Perú, the largest bank in the Peruvian financial system and the main subsidiary of Credicorp Ltd, the largest financial institution in the country. The platform has more than 15 million users, of which 11.5 million are monthly active users, making an average of 36 transactions per month with an average transaction size of US$23. In addition, it empowers entrepreneurs and local businesses to grow financially through its suite of credit and payment tools. With around 1 million active entrepreneurs and merchants on its platform, Yape continues to play a vital role in Peru's evolving digital economy.
- Yape is significantly transforming e-commerce in Peru by addressing key barriers and enhancing digital payment experiences. As Peru emerges as the fastest growing e-commerce market in Latin America, Yape is capitalizing on this growth with features such as Yape Tienda, which simplifies the purchase of technology products and appliances directly through the app, promoting digital inclusion. With only 54% of adults having a bank or fintech account and 60% making purchases online, Yape's easy-to-use, commission-free platform encourages more frequent transactions and increased spending. Digital wallets, including Yape, account for 11% of e-commerce payment volume and are expected to grow as consumers recognize their convenience and security. Furthermore, with 64% of e-commerce volume in Peru coming from mobile devices, Yape's mobile-first approach aligns with consumer behavior, ensuring its position at the forefront of Peru's e-commerce revolution.
- Businesses have adopted Yape for its zero cost to consumers, agility, simplicity and increased security. While merchants may incur some fees, Yape is free for consumers to use, making it an attractive payment option. Payments are quick and easy, requiring only a QR code scan or mobile number with PIN confirmation, and can be made 24 hours a day, providing operational flexibility. Yape guarantees payment with real-time confirmation, improving cash flow management and ensuring transaction completion. In addition, its direct smartphone payment method reduces the risk of fraud and protects sensitive financial information, making it a secure option for businesses.
- Yape is significantly expanding its services to meet diverse customer needs and enhance financial inclusion. The introduction of Yape Tienda enables more than 15 million users to purchase technology products and home appliances directly through the app, with plans to expand the product range to more than 250,000 items by the end of 2024. Yape Lending serves 150,000 customers with fast and easy-to-use digital loans. The platform also supports businesses, including microenterprises, by enabling virtual payments based on QR codes and handling large-scale banking transactions through a newly established business profile. In addition, Yape Remittances facilitates commission-free international remittances from up to 37 countries. Internationally, Yape reached one million users in its first month in Bolivia, with the goal of reaching three million by 2025. Credicorp envisions Yape potentially evolving into a regional neobank by 2025, building on its success in Peru and Bolivia.
What is Yape?
Yape is a mobile payments platform developed by Banco de Crédito del Perú (BCP), one of Peru's largest banks. It allows users to make instant payments and transfers using their smartphones. Yape is widely used for both personal and commercial transactions due to its convenience, speed and low fees. Users can link their bank accounts or debit cards to the application and make payments by scanning QR codes, entering phone numbers or selecting contacts from their phone. It has become a popular tool for facilitating cashless transactions in the Peruvian market.
How to make a payment with Yape?
To shop online with Yape, first make sure that the "Online Shopping" option is activated in your account. Then, go to the website of the store you wish to purchase from, select Yape as your payment method and enter your phone number. Next, look for the approval code in the main menu of your Yape application. Enter the approval code to complete the payment. The maximum amount per transaction is US$534.
How Yape is transforming e-commerce in Peru
Yape is significantly transforming e-commerce in Peru by addressing key barriers and improving the overall digital payment experience. As Peru emerges as the fastest growing e-commerce market in Latin America, with an anticipated 35% compound annual growth rate (CAGR) from 2023 to 2026, Yape is capitalizing on this growth by facilitating more seamless and secure transactions. The introduction of Yape Tienda, which allows users to purchase technology products and home appliances directly through the app, is a testament to this transformation. This feature not only simplifies the purchasing process, but also promotes digital inclusion by making e-commerce more accessible to a wider audience, including those who may be traditionally unbanked.
Yape's impact on the e-commerce landscape is particularly significant given the current state of digital engagement in Peru. With only 54% of the adult population having a bank or fintech account and only 60% of adults making purchases online, there is considerable room for growth. Yape's easy-to-use platform and commission-free transactions are attracting more consumers to move from sporadic transactions to more frequent digital transactions. By providing a seamless and secure payment method, Yape is encouraging greater spending and more consistent engagement with online shopping. This is crucial in a market where the average e-commerce consumer spends approximately US$741 annually and makes up to four digital transactions per month.
In addition, Yape is addressing the prevailing trends and preferences in payment methods and device usage in e-commerce in Peru. Digital wallets, which include Yape, currently account for 11% of e-commerce payment volume, a figure that is expected to increase as more consumers recognize the convenience and security of these platforms. Furthermore, with 64% of e-commerce volume in Peru coming from purchases made on mobile devices, Yape's mobile-first approach aligns perfectly with consumer behavior. This focus on mobile accessibility not only enhances the shopping experience, but also ensures that Yape remains at the forefront of the e-commerce revolution in Peru, further driving growth and innovation in the market.
Why did companies adopt Yape?
- Zero cost to consumers: Although merchants may incur some fees, the use of Yape is free to consumers.
- Agility and simplicity: Payments are quick and easy, requiring only a scan of a QR code or a simple copy and paste of the cell phone number with a PIN confirmation.
- 24/7 availability: Yape operates 24 hours a day, allowing companies to make payments outside normal banking hours, thus improving operational flexibility.
- Payment guarantee with real-time confirmation: Yape ensures that funds are available almost immediately, facilitating better cash flow management for companies and confirming the completion of the transaction to all parties.
- Increased security: Because payments are made directly from the user's smartphone, Yape reduces the risk of fraud and protects sensitive financial information.
What's next for Yape?
- Marketplace: Yape has introduced Yape Tienda, a new feature that allows its more than 15 million users to purchase technology products and home appliances directly through the app and have them delivered to their homes. Yape Tienda's goal is to become the favorite online store for Peruvians by offering a wide range of products, a safe and easy shopping experience, fast deliveries and exceptional customer service. Currently, Yape Tienda offers more than 2,000 technology and home appliance products, with plans to expand to more than 250,000 products by the end of 2024. Users can access Yape Tienda through the app menu, browse the catalog, add items to their cart and complete purchases using Yape for payment, which includes product and shipping costs. After purchase, users receive a confirmation email with order details and delivery date, with shipping available in Lima and other provinces.
- Lending: Yape Lending serves 150,000 customers who engage in digital transactions primarily for consumer purposes, emphasizing simplicity, easy-to-use applications, and speed. The average loan amount is approximately US$67. The platform enhances consumer risk models with Yape's transactional data, and the collection process is fully digital, ensuring efficiency and convenience for users.
- Yape Business: Any company, including microenterprises, can generate a QR code for virtual payments, an option implemented by the corporate initiative Bodega Digital in Lima and Callao. In 2024, a business profile option was established to handle large-scale banking operations (more than 25,000 soles per month) in exchange for a 2.95% commission on monthly revenues. This commission applies to sales over ten soles and is only charged to the business owner with the enabled profile. In addition, the platform supports point-of-service payments for products consumed in corporate franchises. In addition to physical QR codes, the app was expanded to include online payments through Págalo.pe and Joinnus, requiring an approval code generated by the user's account, separate from the password.
- Remittances: Yape has introduced "Yape Remittances," a new feature that allows users to receive dollar remittances from up to 37 countries, with the goal of improving the speed and security of international funds transfers. Yape Remittances offers commission-free transactions, providing a cost-effective solution for both senders and recipients. In addition, users can exchange dollars within the app, enhancing convenience. By partnering with seven international transfer agencies, Yape simplifies the process, eliminating long lines and improving the user experience.
- Internationalization: Yape grew rapidly to one million users in its first month in Bolivia, achieving more than 6.5 million transactions, and aims to exceed three million users by 2025, promoting financial inclusion with its easy-to-use, commission-free platform.
- Neobanco: Credicorp does not rule out the possibility that its digital wallet Yape could evolve into a regional neobank by 2025, following the success the product has achieved in Peru and its expansion in Bolivia.
Verdict
Yape stands as a transformative force in Peru's digital payments ecosystem. Its comprehensive and easy-to-use approach meets the diverse needs of its 15 million users, who increasingly rely on its intuitive mobile app for secure, real-time payments, credit and remittances. Playing a crucial role in processing a relevant portion of all payments made with digital wallets (estimated at US$1.7 billion), Yape commands a substantial share of Peru's e-commerce sector, supporting financial inclusion for the 60% of adults who shop online. As it continues to innovate and expand its services across Latin America, Yape remains a key driver of financial accessibility and modernization, ensuring its relevance in the region's evolving financial ecosystem.
As I explore Yape's rapid evolution and its profound impact on Peru's payments landscape, I invite you to join the conversation about this widely adopted payment method. How do you see Yape shaping the future of e-commerce and beyond? Share your thoughts and experiences with me on social media. Let's explore together the opportunities and challenges Yape presents and spread the word about this payment system - share this newsletter and join the dialogue today!
If you have questions or wish to continue the discussion, feel free to contact me directly at tony@rebill.com.