Contrary to what begins to be recorded in the first months of 2024, compared to the end of last year it was certainly there recovery in consumption, supported above all by electoral uncertainty, by the acceleration of inflation, by the fear of the devaluation which finally occurred on 13 December and by the “small currency plan” implemented by the former Minister of Economy and presidential candidate Sergio Massa.
This could be seen in an unprecedented increase in the use of debit cards to make purchases in stores. As revealed by the Payway company in its latest quarterly index, a study of the Argentine payment methods market in Argentina based on the register of operations carried out in POS terminals, QR, its own systems, eCommerce, automatic debits, among others; In the fourth quarter of 2023, there was a small “boom” in the use of debit cards.
For the first time, 65% of the time plastic was used it was to pay in shops, to the detriment of its use to withdraw cash, both at ATMs and for withdrawals made at the cash registers of some commercial establishments. Debit purchases grew by almost 26% compared to what the same index reported a year ago.
Inflation is behind this behavior: Failure to update large bills makes it less expensive to pay for usual consumption with plastic than with plastic cash. Also the “Buy without VAT” effect, the program launched in September by the government of Alberto Fernández, which returned 21% of operations carried out with debt, with a limit of 18,800 dollars per month. Applied to workers earning less than $708,000, much of the middle class has turned to this type of consumption. The program expired on the last day of last year and Javier Milei’s government decided not to continue it.
This data also shows a trend of greater adoption of digital payment methods. “The common use of electronic and digital payment methods and the growing acceptance of their acceptance by businesses continues to push banking use,” commented Julián Ballarino, Head of Institutional Relations at Payway.
Payment data also shows persistent use of credit card as a means of financing and payment for Argentines. 56% of the transactions carried out with plastic were carried out with credit, which means an increase of 11.4% compared to what was recorded twelve months ago and 8.6% compared to what was recorded in the third quarter of 2023.
“The entire fourth quarter of 2023 must be read in light of political and electoral ups and downs.”and progress for consumers,” said Martin Kalos, economist and director of Epyca Consultores. “Whoever was able to advance consumption did so. And this was seen starting from the third quarter of the year, with those who could advance holiday expenses for the summer we are experiencing, and more rapidly in the fourth quarter, where any expense for the following month that could be anticipated was been done.”
The areas in which credit payments grew the most were supermarkets, with a year-over-year increase of 72%, e that of Travel and Tourism, with an increase of 40% compared to 2022. “Evidently this behavior occurred due to the inflationary acceleration, but also due to an expectation of devaluation which, on the one hand, favored the consumption of imported goods or those with costs in dollars brought forward,” Kalos added.
“The search for coverage by many families has caused the loss of liquidity and this has motivated the use of the card. as a source of short-term financing,” he added. According to Payway data, 53% of installment purchases under the Now Plan were for a three-month period; while outside of the government program, Plans Two and Three they represented 56% of the operations carried out.
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Source: Clarin
