Fintechs have plenty of reasons to celebrate. In April, more payments were made with wire transfers than with debit cards, which confirms the advance of digital money in Argentina. According to the Central Bank’s latest “Retail Payments Monthly Report”, in April, 198.8 million payments were made via QR code, virtual wallet or the Internet; and 193 million with debiti.e. they paid in cash but with plastic.
The director of the UCA’s Center for Alternative Finance, Ignacio Carballo, highlights another relevant aspect: he also states that 60.3% of transfers within the financial system have a CVU as their origin and/or destination, which identifies the virtual accounts. “This means that 6 out of 10 money movements in the country are already done by the fintech”translated the specialist.
Electronic means of payment are consolidated, therefore, after the take-off experienced in 2020 during the pandemic and also due to the implementation of the “Transfers 3.0”which has adapted the regulations to operate with money virtually and favors transactions between accounts, wallets (Mercado Pago, Modo, Ualá, Naranja X and DNI Account, among others) and conventional collection devices (in jargon, Pos. or QR.
Payments by electronic transfers totaled $787 billion in April, still short of the $895.7 million made with a debit card. In any case, the use of credit cards is a notch below the but It remains stable compared to the last few months. In April, 115.7 million payments were made in the amount of $1,097 million, the BCRA report said.
With these numbers in view, in the financial sector they interpret that, despite everything, the advance of digital payments does not affect debit cards as much as cash. In May 2020, the volume of money for wire transfer payments was equal to cash withdrawals from ATMs. Today, electronic money exceeds cash by 42.2%.which remains valid. According to the BCRA, 94.1 million withdrawals totaling $1.173 billion were made in April, or an average of nearly $5,400 per withdrawal.
Behind these numbers the tussle between traditional banks (in the process of conversion) and fintech continues, among which Mercado Pago, the financial arm of Mercado Libre and leader in the sector, stands out. Weeks ago, the Central Bank asked full interoperability of all QR codesno later than September. In other words, any device, whoever it belongs to, must accept credit card payments from any wallet. And not just with money on account, as it works now.
The concern of traditional entities is the dramatic increase of the QR code in everyday commercial transactions. To pay for purchases in shops, supermarkets, petrol stations or kiosks. The BCRA report is exemplary. In April, Of the nearly 200 million digital wire transfer payments, 31.1% were initiated by QR. “As of July 2022, they accounted for 22%,” stressed a source from the banks.
The QR code, on the other hand, is used to pay in physical stores. But most wire transfer payments are made for Internet purchases. It is estimated that 73% of the total (about 114 million digital payment transactions) were initiated via the web. The data confirms that the growth of eCommerce in the post-pandemic continues.
According to a recent report prepared by COELSA (the company that registers almost all operations in the financial sector), the opening of bank and virtual accounts increased by 18% last year. But it stands out that CVUs have advanced far more than CBUs, the key associated with traditional accounts. Currently 156 million accounts.
Of this total, 78% are CBUs (122.5 million) and the remaining 22% (34.1 million) are CVUs. CBU stands for Clave Bancaria Uniforme. It’s a 22-digit code (or alias) needed to send or receive money from any type of bank account. The CVU (Uniform Virtual Key) is its digital equivalent whether it comes from a bank or a fintech.
Source: Clarin
