Q&A with Guillermo Johanson Bettocchi
Country Manager - Peru @ PayRetailers
Hi, there!
I’d like to share with you my latest Q&A with Guillermo Johanson Bettocchi, Country Manager for Peru for PayRetailers.
PayRetailers developed a successful formula designed specifically for the Latin American market. Due to it, their growth has been exponential. While retaining their European presence with their Barcelona HQ, they have added 7 offices across Latin America that offer services to the entire region.
One of those countries is Perú, and Guillermo is at the forefront of operations in one of LATAM’s fastest-growing nations.
Check out our Q&A below 👇
Considering that PayRetailers offers an all-in-one payment solution for LatAm, what does the coverage of your Peru-localised payment strategy include?
First, PayRetailers’ localised payment strategy is enhanced by our great expertise in more than 12 countries in the Latin American region where we operate.
With local offices and experts who know the Peruvian market perfectly, our localised payment strategy allows us to provide international merchants operating in Peru with an end-to-end payment processing service and access to the most sought-after – traditional and non-traditional – local payment methods, in addition to offering strategic support based on the financial needs of the Peruvian market.
Peru has around 13.9 million online shoppers. Which industry has the highest sales volume?
According to an analysis presented by the Peruvian Chamber of Electronic Commerce (CAPECE), the highest online sales volume in Peru comes from the retail industry, specifically Electronics & Technology, with an annual growth of 50%; Fashion & Accessories, with a 40% growth; and Restaurants, with a 70% growth so far this year.
Broadly speaking, the growth of the Electronics & Technology sector has been driven by interest-free instalment payment solutions and new short-term financing.
Due to their wide variety, specialisation, and exceptional recognition from their target audience, post-pandemic enterprises in the Fashion & Accessories and Restaurants sectors have also experienced a high growth rate until now.
If you were to take an x-ray of the online market in Peru, what challenges does it face, and where is it headed? How is the market in terms of demand for digital services?
It is important to consider that, before the pandemic, only 30% of the Peruvian population used banking services.
Since then - with the growing adoption of sales via eCommerce - the Peruvian market has experienced a significant uptrend towards transaction digitalisation, as well as an increase in the percentage of growth of the banking population, which, according to the National Institute of Statistics and Informatics (INEI), translates into more than 50% of Peruvians.
This impact was strongly reflected in the increase in demand for digital services - not necessarily in banking - as we have an increasing use of mobile wallets in the market that do not require an associated bank account.
Having said this, it should be noted that PayRetailers faces three important challenges in the Peruvian market: first, how to meet the needs and consumption habits of that percentage of the population that does not use banking services; secondly, and in line with its exponential growth, offering merchants the possibility to accept a wide range of digital wallets in the country; and finally, the challenge of how to tackle regulation on the future interaction of the cryptocurrency market with the two challenges mentioned above.
Peru is the 5th largest internet market in Latin America. Let’s talk about the great opportunities facing international traders in Peru.
The opportunity for international traders in Peru is immense.
Being one of the Latin American economies with the highest growth in recent years, and thanks to the great work of the Central Reserve Bank, Peru has one of the most stable currencies in the region, which presents a unique and ideal scenario for businesses operating cross-border to replicate the success of their operations.
Considering that the number of businesses selling their products and services online has increased fivefold so far this year, it is important to note that digital payments represent 40% of the local payment transactions, and it is expected that the penetration of these users will increase to 55% by 2025.
Currently, what is the most frequently recurring payment method in Peru? How does it work?
According to data provided by IPSOS, with 89% of users, the most used payment method in Peru continues to be cash.
Regarding payment methods, debit cards top the list with 33% of users, mobile wallets with 16% (QR payments), and credit cards with 15% of users. The growing adoption of mobile wallets and debit cards and the decline in credit card users are due to the precautions consumers take to avoid getting into debt.
The local use of e-wallets increased by 75% during 2020 and around 300% post-pandemic. How many Peruvians use some kind of digital wallet today? How would you define the present and the future of this instant payment method in Peru?
In Peru, the use of electronic wallets began in 2016. Although its growth was considerably slow at first, the pandemic was responsible for giving it the necessary boost to position eWallets as one of the top 3 payment methods most sought-after by Peruvians.
While today more than a third of the Peruvian population (11 million) uses a digital wallet to make payments, by the end of 2022, we are expected to reach more than 17 million digital wallet users in Peru.
Undoubtedly, thanks to its immediacy and the simple use of QR codes in transfers and payments of any type of purchase, the Yape and Plin wallets - leveraged by banks - accelerated this payment method’s growth.
According to Andina (Peruvian News Agency), eWallets are expected to become the second most popular means of payment in Peru next year, following cash payments.
This will become even more widespread, and thus, more people will be using banking services in Peru, as digital wallets will facilitate microcredits based on the information they obtain from their users’ account activity, and we will surely have more interbank wallets.
What can you tell us about the cross-border payment landscape in Peru?
The growth in the demand for a cross-border solution in the country is really exciting.
Regarding payments with Credit and Debit Cards, an adjustment has been made in the rates due to the cross-border programmes (EMLP implemented by Visa and PIFO implemented by MasterCard) were created to regulate the rates of cross-border services in Peru.
In turn - within the framework of cross-border payments - it is important to consider the exercise of the new Law No. 31557 in Peru, which regulates the exploitation of remote sports betting and games, published in the official newspaper El Peruano on 13 August. The new law states that the authorities have 120 business days (since its publication) to show the regulations that will establish the conditions and specific requirements for the obligations set forth therein, which will impact this sector.
Even so, Peru’s cross-border payments landscape is optimal since it is a market that experiences large-scale annual growth worldwide, and Latin America is no exception.
In your opinion, what are the digital trends in the payment sector in Peru?
I believe that mobile wallets will be the mainstream due to their ease of use and low maintenance cost. Unquestionably, the growing adoption of this payment method is already driving digitalisation in retail businesses operating in Peru, which use mobile applications to sell and order merchandise.
While the expansion opportunities are enormous, fraud risks are a reality in Latin America. What challenges does this emerging market present, and how does PayRetailers navigate Peru’s regulatory and compliance landscapes?
The first challenge stems from the Peruvians’ distrust towards digital things. Although the pandemic prompted us to acquire more digital consumption habits, we must recognise that this was more of a necessity than a voluntary decision.
Although today the number of digital users is experiencing rapid growth, most Peruvians do not feel safe giving away their personal and bank details to make payments for their purchases.
The second challenge is that we are still a country that is not fully regulated. In the market, we find companies that proceed legally like us. But we also come across those applying the motto “what is not prohibited by law is not regulated. Therefore, it can be done”.
Considering the challenges of the Peruvian market, PayRetailers has a great local support team who knows and is up to date with all the local compliance and regulation issues.
To comply with the regulations and compliance aspects in each country where we operate - either locally or cross-border - we have a team of compliance experts located in Spain, a legal hub in Mexico, and compliance officers in every country requiring it.
What benefits do your merchants have by integrating the PayRetailers’ all-in-one payment solution to expand their business in Peru?
By integrating our all-in-one payment solution in Peru, merchants can access a wide range of local, traditional and non-traditional local payment methods integrated into a single API.
In addition, they benefit from a service that guarantees security and trust, as we are backed by a team of local experts, prestigious audits and constant improvements in terms of our products and services in each country where we operate.
We are always up to date with the latest technology developments and know the Latin American market, which undoubtedly facilitates the scalability of international business throughout the region.
PayRetailers is present in 12 Latin American countries
PayRetailers is a leading global provider of online payment services with Latin DNA. They offer e-commerce payment solutions for end-to-end cross-border transaction flow without the need for a local entity. Learn more here.