Adoption and welfare effects of payment innovations: The case of digital wallets in Peru

Andia A.; Aurazo J.; Paliza M. · Information Economics and Policy (2026) · DOI: 10.1016/j.infoecopol.2026.101177

Resumen

Digital wallets like Yape and Plin have gained widespread popularity in Peru, allowing users to make instant payments through quick response (QR) codes or mobile phone numbers. This paper examines the drivers of their adoption and their implications for payment choice and consumer surplus. Using market share data for six digital payment instruments and cash from January 2019 to April 2024, we estimate the demand for payment instruments and find that features such as lower fees, 24/7 immediate payments, QR code payments, and acceptance at point-of-sale (POS) terminals are associated with their rapid diffusion. Our estimates suggest that a PEN 0.01 (Peruvian Sol 0.01, equivalent to USD 0.003) increase in payer fees would reduce the market share of the digital wallets by 0.31 percentage points (pp), while debit cards and cash would gain usage. Simulations further indicate that removing 24/7 immediate transfers would reduce digital wallet usage by 15.75 pp, discontinuing POS payments by 26.01 pp, and eliminating QR code functionality by 4.45 pp. Our welfare simulations indicate that the availability of digital wallets is associated with increasing model-implied consumer surplus gains per transaction among banked consumers over time.