Effective May 1st, Argentina’s digital wallet landscape will undergo a significant transformation with the implementation of three new regulations introduced by the Central Bank (BCRA). These measures, proposed by both banks and various players within the fintech ecosystem, were initially scheduled to take effect in 2023 but were delayed due to pressure from the company that most vehemently opposed the changes. The overarching objectives of these regulations are to foster competition, financial inclusion, and transparency within the payments system.
Key Highlights of the New Fintech Regulations:
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QR Code Interoperability for Credit Card Payments:
Credit cards can now be utilized for payments using QR codes, regardless of the digital wallet being used. This move aims to dismantle Mercado Pago’s “closed ecosystem,” as it had previously been the sole platform offering QR code payments with credit cards. Banks have long advocated for this interoperability, arguing that it promotes competition and financial inclusion.
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Elimination of Immediate Debit (Debin) and Introduction of Pull Transfers:
The Debin system, which facilitates instant funding of digital wallets from bank accounts, will be phased out. In its place, the “Pull Transfers” system will be implemented, requiring users to initiate the transfer from their bank account to their wallet. This regulation, already decided upon last year, was delayed due to Mercado Pago’s strong lobbying efforts. The company had resisted the change, claiming that Debin is a convenient and secure system for users. The Central Bank maintains that Pull Transfers offer greater transparency and security, while also enabling the development of innovative financial services.
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Introduction of Cedip:
Cedip are digital certificates representing fixed-term deposits that can be transferred, endorsed, and used as a means of payment. This measure aims to modernize the fixed-term deposit market and make it more accessible to investors. The BCRA is collaborating with the Federal Tax Authority (AFIP) to exempt Cedip transfers from the check tax.
Cedip will enable the transfer of ownership for the settlement of commercial or individual obligations, as well as their trading on securities markets and/or for primary issuance. They will also allow for fractionalization to transmit amounts smaller than the original amount, maintaining the rest of the placement under the same conditions, thus enabling the holder to obtain liquidity for the amount they require. Maturities may be collected at the window of the depository institution or by crediting an account at a different financial institution.
Implementing these new regulations is expected to bring about a significant transformation in Argentina’s fintech landscape, enhancing competition, fostering financial inclusion, and promoting transparency within the payments system. It remains to be seen how these changes will impact the overall fintech ecosystem and the behavior of consumers and businesses alike.
