Digital wages for decent work in Peru: A rapid assessment
Authors: Alice Merry, Luz Martínez Santamaría, Gustavo Felipe Flórez Salcedo, José Manuel Angulo Jugo, Adriana Morales and Johan Sebastian Rozo Calderon for the International Labour Organization
Date: October 2022
The team conducted a rapid assessment of the potential for digital wage payment in Peru.
When implemented responsibly, digital wage payments – through bank accounts, mobile money wallets or prepaid cards – can benefit workers and enterprises and contribute to public policy aims.
Digital wages can promote efficiency, growth, transparency, improved working conditions, and access to services and markets. The transition also has the potential to allow workers, particularly the most vulnerable, to have greater control over their wages and access formal financial services. However, the transition from cash to responsible digital wages brings challenges for enterprises, workers, regulators and the financial sector, including limitations in financial infrastructure and the need for enterprises and workers to adopt new systems and tools.
The ILO’s Global Centre on Digital Wages for Decent Work carried out a rapid assessment in Peru to analyse the potential for responsible digital wages. The analysis was carried out from January to April 2022 and focused on two key sectors and geographical areas: the agricultural sector in the North of Peru and the gastronomy sector in Cusco.
The assessment found that:
Peru is a country with significant promise for digital wages, with a legal framework that promotes digital wage payments, a supportive public policy environment, growing access to finance, and a recent explosion in digital wallet use.
There is a need to support small and medium enterprises to digitalize their operations and wage payments, and there are opportunities for financial service providers to better meet the needs of both small enterprises and workers.
There is a need to ensure a responsible transition to digital wages which benefits a full range of enterprises and workers, particularly those outside of urban areas.
Digital wage payments are playing an important role in driving account ownership, but workers—particularly the most vulnerable—are not always reaping the benefits.
More information on the findings can be found in this briefing.