Digital wallets in Peru succeed because they are free, instant, and work everywhere

Digital wallets like Yape and Plin have become very popular in Peru because they let people make instant payments 24/7. This paper finds that low fees, instant transfers, and working with existing payment terminals are the main reasons for their success.

For years, many assumed that digital payments would take off if people just had access to the technology. This paper shows that it's not just access, but specific features that drive adoption: no fees, instant transfers, and working with existing systems. If you remove any of those, people go back to cash or debit cards. This means that simply launching a digital wallet isn't enough; it has to be cheaper, faster, and more integrated than cash.