Although there are no official records to confirm it,
the use of cash is receding
.
Part of the responsibility lies with the high inflation, which makes it difficult to travel and the availability of cash for daily purchases.
The other is the deployment and sustained development of electronic means of payment and collection, among which wallets and virtual accounts and the QR code stand out.
Weeks ago, the two main chambers of traditional banking expressed their concern with the advance of fintech in the digital money business with unusual clarity.
ADEBA (Association of Banks of Argentina) directly targeted the financial ecosystem of Mercado Libre (Mercado Pago) of "
monopolistic practices"
and demanded
the opening of their QRs to accept credit card payments from any wallet
.
And not only with money in the account, as it works now.
"Some QR providers, taking advantage of their dominant position in that market, close their systems to consumers who are not their customers," ADEBA highlighted.
Days later, ABA (foreign banks) joined the questions.
In both cases, they indirectly highlighted that
Mercado Pago has the largest network of businesses adhering to the QR code system:
"It is estimated that they have 70% of the total," they calculated.
Mercado Pago responded just as harshly.
He rejected that they are a monopoly and stressed that “
only 7% of face-to-face payments with electronic means occur in Mercado Pago QR
.
More than 90% are made in traditional collection terminals”.
In the financial industry they agree that the conflict intensified due to the notable growth of digital payments and the rapid adoption of the QR code, which compete with traditional terminals, including Posnet (Fiserv) and Lapos (Prisma).
Both parties, banks and fintech, use their arguments to defend their businesses in
an industry in constant conversion.
“The conflict between banks and fintechs seems to center
around the rules of the game
,” says Alejandro Scasserra, an expert in digital banking.
"When you look at the world - he added -
it has been shown that they can coexist
.
The most successful initiatives to put an end to this conflict consist of a dialogue between the public and private sectors that allows reaching common agreements”.
But the confrontation does not subside.
On one side is Modo, the virtual wallet promoted by a consortium of 32 banks.
Its CEO, Rafael Soto, argues that "users face a lot of confusion with QR codes," adding that "this goes against the freedom of choice."
Soto argues that the lack of competition also harms businesses, which "
end up paying the commissions imposed by each QR, which in some cases are very high
."
The vice president of Mercado Pago, Alejandro Melhem, argues that his company's QR has a minority share in the business.
But he points out that, in addition, since 2018 he has developed this payment technology,
which required an investment of US$30 million
.
“In 2021, the BCRA made it mandatory for QRs to accept transfer payments from any wallet (interoperability).
The banks did not make a remotely similar investment
, nor did they deploy QR in stores, ”he said.
The background of the fight lies in the distribution of commissions paid by businesses for credit card payments.
Banks have a cap of 1.8% (with debit it is 0.8%) while there is no cost for money transactions from account to account.
This was established in November 2021, when "Transfers 3.0" came into force, which forced all QRs to interoperate.
This is only part of the conflict between the financial players.
Because non-bank wallets (especially Mercado Pago and Ualá) point out that banks prevent the normal transfer of money from checking accounts and savings accounts to their platforms.
The reason is that fintech deposits "
are tied to an investment fund and generate profitability
," explains Romina Simonelli, VP of Means of Payment at Ualá.
The senior executive admits that there are frictions on this issue and that some banks (“we found out from user complaints”) impose limits on the transfer of money from CBUs (traditional bank accounts) and CVUs (virtual accounts).
He also says that the issue is not clear "
because each bank handles it differently and it is difficult to identify it
."
The banks swear that they comply with all the regulations of the Central Bank.
And they explain that the cap on transfers established by the monetary authority (the equivalent of 15,000 UVA, this is $3.4 million) is logical since "most fraud is committed from a CVU."
Fintechs stress that "
banks breach those limits
."
But at the same time they acknowledge that they have no proof in this regard.
“Mercado Pago developed a free digital account through which more than 7 million people in Argentina invest their balances in a common investment fund managed by BIND, which currently yields 63.8% annually, with the possibility of
using
the money at any time.
The banks do not remunerate the balances
, ”says Melhem.
Carlos Hourbeigt, a former director of the Central Bank and one of the promoters of the "Transfers 3.0" system, interprets that this "is a fight between giants, in which they try to use technologies from others."
It alludes to the QR system developed by Mercado Pago and to the stock of credit and debit cards, which are mostly issued by banking entities.
"What needs to be achieved is a consensus to see what is put on one side and the other, and generate a mechanism in which everyone wins," he says.
That, he said, "
is the responsibility of the Central Bank
."
Meanwhile, electronic money is advancing rapidly. A survey carried out between the consultancy Inveq and Mercado Pago indicates that "
more than half of SMEs state that the use of cash has fallen
" although a third of the total clarified that they still prefer to collect in cash .
On the other hand, the study indicates that 94.3% accept payments with QR.
Explosive QR boom
Mercado Pago was a pioneer in the development of QR payments in the country.
Today it is the leading platform.
Electronic payments took off in a big way during the pandemic.
What is new is that the trend has become much more accentuated in the last year.
According to a report prepared by COELSA (the company that registers almost all operations in the financial industry),
the opening of bank and virtual accounts increased 18%
.
But in 2022 the CVUs advanced much more than the CBUs, the key associated with traditional accounts.
It is not only that:
payments with QR also skyrocketed significantly.
The data comes from the “Coelsa Indicator” study, released last week.
The first surprising fact is that there are 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 is a 22-digit code (or an alias) essential to send or receive money from any type of bank account.
The CVU (Uniform Virtual Key) is its digital equivalent whether it is from a bank or a fintech.
The disproportion between one and the other is shrinking.
In fact, last year 24.2 million accounts were opened.
61% were CBUs (14.9 million) and 39% were CVUs (9.3 million)
.
The count at the end of last year indicated that 36.7 million people had at least one CBU and 21.4 million, one CVU.
This gives that each person has 3.3 CBU and 1.6 CVU, on average.
Almost 5 bank or non-bank accounts per capita
.
"Electronic transfers and payments in which there is at least one CVU involved increased 149% compared to 2021," says the study.
This universe (840 million operations) covers both sending or receiving money from a virtual account, including payments with QR.
The QR code system is the payment method that is growing the most and the most developed ecosystem is that of Mercado Pago.
It coexists with others, such as Posnet (Fiserv) and Lapos (Prisma), that of the fintech of banks and (Modo, DNI Account, BNA+, Naranja X) and of the fintech world, such as Ualá.
The evolution of payments through this channel, known as PCT (Payments with Transfers) grew 230% in just one year.
According to COELSA, between December 2021 and the same month of 2022 it jumped from 1,310,323 operations to 4,319,777.
That is, more than 3 million joined.
The average ticket was low ($1,982), but the trend is changing rapidly, according to sources in the financial sector.
There is another piece of information that put the banks on alert.
In 2022,
just over 110 million transfers were made by CVU and barely 1 million from a CBU
.
As interpreted by Carlos Hourbeigt, former director of the Central Bank, "last year, electronic money transfers exploded due to the implementation of the Transfers 3.0 system", which came into force in November 2021, and which established the interoperability
of
all QR codes.
for the transfer of money electronically directly or through a debit card.
Another report, in this case a survey carried out jointly between the consulting firm Inveq and Mercado Pago, underlines that the majority of SME businesses accept charging in different ways:
debit card (96.6%), cash (95.3% ), QR code (94.3%), credit card (89.7%) and online payments (69.1%)
.
It also indicates that half of those consulted indicated that they implemented some digital transformation in the last 6 months.
Still,
one in 3 merchants said they prefer to continue charging in cash
.
Advances in digital payments are advancing as well as the access to banking services for the population.
"There are more and more people with bank accounts and immediate money transfers are speeding up," summarizes the CEO of COELSA, Atilio Velaz.
The openings include pure non-bank fintech accounts (MercadoPago or Ualá, for example) or virtual electronic wallets, such as those of MODO (the ecosystem that promotes a consortium of 32 banks), Cuenta DNI (Banco Provincia) or BNA+ (Banco Nación).
Regarding the use of electronic transfers,
millennials (those born between 1980 and 1993) lead the ranking
.
42% of that segment sent or paid through an app.
Those of Generation X appear further back (those born between 1964 and 1979), with 26%.
Just below are the centennials (1994 and 2009), with 24% of the total and finally the so-called baby boomers (the generation born between 1959 and 1963), with 7%.
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