Although it seems impossible to eradicate in an economy with a high level of informality like Argentina, inflation could be help limit the use of cash. Moving around with so many bills to carry out daily operations such as refueling the car, paying for the supermarket, school fees and even the bill at a bar becomes quite inconvenient and make way for increasingly installed means of digital payments.
There are many signs of this change in trend. But perhaps the latest report from Prisma Medios de Pagos, the company behind much of the card and digital media consumption in the country, may present some of the most relevant. What had already happened with the pandemic, which allowed a “boom” in the digitization of payments, has become a trend that consolidates as the price spiral increases.
The report, which analyzes the movements in the first quarter of the year, highlights a greater use of plastics, both credit and debit ea decrease in the number of cash withdrawalsboth at bank ATMs and at the tills of major commercial businesses, such as supermarkets or pharmacy chains.
“The cards continue gaining ground on cash. There is an interannual growth in credit card transactions of 22.44% and 6.27% with debit card”, commented Julián Ballarino, head of institutional relations at Prisma Medios de Pago. At the same time, Ballarino found a peculiarity: debit cards began to be used more as a means of payment in various businesses than as a “key” to extracting money from banks.
The report shows that the ATM withdrawals decreased, in quantity, by almost 10% since the first quarter of last year and are even lower than in the last quarter of 2022. At the same time, cash withdrawals in shops have increased, an activity that is becoming more common and more “convenient”. rather than going through bank teller terminals.
Finally, the number of times debit cards were used to pay for purchases increased by more than 6%. When asked about these trend changes, the economist of Epyca Consultora, Martín Kalos, underlined: “The digitization of payment methods is a growing trend during the pandemic, which is reflected in the relative decrease in the use of ATMs for obtain cash, and in an increase in the share of transactions made in shops”.
Another of the impacts of the price increase is the preference for Argentines in be financed in the short term. Purchases with plastic made against payment accounted for just over 57% of total transactions, implying a slight decline from what was seen a year ago. At the same time, purchases with “bank” installments grew by more than 4%, while those with Now plans contracted by close to 5%.
The increase in the cost of the official plan fees and the uncertainty of the long-term loan it also makes consumers choose to self-finance for between three and six months. As detailed by Prisma, the “short” plans pooled more than 67% of funded purchases, while Now 12 and Now 24 were losing ground.
These data from Prisma coincide with those recently presented by the fintech Naranja X, which reported that in the course of 2022, 82% of its customers have chosen to finance their consumption. “Of this total, 49% have opted for the 3 interest-free payment plan (Plan Z), about 20% have chosen to pay in 6 installments and another 15% have financed their consumption in 12 installments”, they explained.
Source: Clarin
