In recent years, many Latin American countries have issued regulations that promote the financial inclusion of citizens who do not have access to the financial system. However, each country has adopted a different approach.
LatAm approaches to promoting financial inclusion
By way of example, Chile has promoted the use of a simplified bank account that can be opened easily and users only pay for the transactions they carry out. Brazil enacted a legal framework allowing micro insurances to offer their products in banks' offices and agencies. In Colombia, the Financial Inclusion Law establishes a regulatory framework for electronic transactions and creates entities specialized in electronic payments. In Paraguay, the Regulation of Electronic Payment Means regulates the requirements to be met by entities that provide non-banking transfers and e-money through telecommunications services.
The Peruvian Approach
Following this trend, the Peruvian Government, since 2013, has issued several regulations establishing an e-wallet system in which not only the financial institutions but also special "e-money" entities participate as issuers. The system is supported in the networks of the telecommunications companies whose users can access their e-wallets and transfer money with their mobile phones.
The legal framework of the system is two-fold: besides the general law enacted to create the e-money, there are regulations from the financial system regulator (SBS) that gives the authorization to the financial entities to participate in the e-wallet system, and regulations from the telecommunications regulator (OSIPTEL) that regulates the relation between the financial entities and the telecommunications providers.
In February this year, the first e-wallet project - called "Modelo Perú" ("Peru Model") - was launched in Peru, consisting of an e-wallet product that allows mobile phone users to open electronic accounts and process financial transactions through their cell phones. The commercial name of the product is "Billetera BIM" ("BIM Wallet") and it is addressed to citizens with low incomes in places where the presence of financial institutions is limited or null, and to small businesses that use cash in their ordinary transactions.
This Project was born as an initiative of the Banking Association (ASBANC) which, through its members and its non-profit Center for Financial Education, incorporated Pagos Digitales Peruanos S.A. (PDP), a company that designs and operates a platform that allows the processing of financial transactions with the e-wallet.
Unlike other e-wallet projects, PDP's platform allows full interoperability between telecommunications companies and financial institutions. This means that a "Billetera BIM" user who is the client of an e-money issuer is able to perform transactions with clients from a different issuer regardless of their mobile service providers. This feature makes "Modelo Perú" a one-of-a-kind project in the world.
Currently, there are more than 30 financial institutions and three telecommunication service companies (with more to come) that participate in "Modelo Perú".
"Modelo Perú" represents a great opportunity for financial institutions to develop new products for the segment of the population that - before this project - did not have access to the financial system. Currently, "Billetera BIM" is designed to allow the transfer of e-money between users' accounts and to process mobile services credit charges. In a second stage, it will allow the payment of purchases in brick and mortar stores, online shops, taxis, etc. Nevertheless, in the future, financial institutions will likely be able to offer products tailored to the financial history of individuals.