(The following post is the second in a two-part series on Modelo Perú. You can find part one here.)
On February 16, 2017, Modelo Perú, a first-of-its kind payments initiative in Peru, will mark its one year anniversary. The initiative established an interoperable nationwide payments platform, Bim, with a particular focus on expanding access to underserved customer segments. Thirty three institutions, including microfinance organizations, commercial banks, and telecos, are participating in the platform, which was spearheaded by the Bankers’ Association of Peru (ASBANC). The interoperable mobile money platform is already a financial services feat. But we’re likely to see big changes between now and its second birthday.
CFI, in partnership with the Institute of International Finance (IIF), produced an issue brief exploring the progress and challenges the program has faced thus far, based on interviews with stakeholders. Last week, in part one of this blog series, we presented the challenges that have hindered the platform’s implementation to this point. This week, we look ahead to promising solutions to these challenges. Pagos Digitales Peruanos (PDP), the company running the platform, is currently recalibrating its goals while developing tailored solutions to each of the issues that have emerged. Below, we share an overview of four solutions PDP is exploring.
Further expanding Bim outside the main cities
In its first year, uptake of the Bim payments platform was concentrated in cities and among banked populations. In order to expand coverage, PDP is implementing pilots in Cusco and Piura, two cities with limited infrastructure and banking agents, to understand what the main obstacles are for operating Bim in these environments. In addition, PDP is working with MFIs to develop a network of rural agents who can educate rural populations on the use of the platform and perform simple cash-in and cash-out transactions.
Incorporate Bim transactions in POS systems for existing agent networks
During year one, Bim operated solely on mobile phones. This introduced issues for nearly all of Peru’s banking agents who were used to conducting transactions through POS systems. To use the Bim platform, agents now had to do twice the work, maintaining their POS while also maintaining a working mobile account. The added work associated with using Bim hindered uptake and usage. In response, PDP is working with Ericcson and large banks to allow for Bim transactions to be incorporated into the banks’ own POS systems, with the goal of eventually allowing agents to conduct all Bim transactions through their familiar systems.
Include all mobile carriers in Modelo Perú
Three mobile operators were signed onto the platform for year one, however there were still mobile coverage issues which hindered usage. Therefore, PDP is targeting Bitel, the smallest and last MNO in the country to join. Bitel is in final negotiations with PDP and is exploring the development of a smart phone application for the platform.
Seek alliances with commercial networks to promote digital payments
In order to continue expanding the reach of Bim, and to build the digital payments ecosystem in Peru, PDP is aiming to build relationships with large retail and commercial networks in the country. There is also discussion of linking Bim to the urban public transportation system to allow easy payment of fares.
2017 will be a critical year for Modelo Perú. While the platform faced a number of challenges in its first year, PDP is taking big steps to improve the model and to expand its reach. We look forward to seeing how the project progresses.
Read our brief on Modelo Perú here.
Have you read?
Bim – The First Fully-Interoperable Mobile Money Platform: Now Live in Peru
Digital Financial Inclusion in Peru; A Promising Trend to Watch
Peru’s National Financial Inclusion Strategy Charts New Path