Card-based payments are gradually gaining traction in Argentina courtesy of various government initiatives. As a result, the total card payments value is set to record a compound annual growth rate (CAGR) of 20.4% between 2018 and 2022, says GlobalData, a leading data and analytics company.
The company’s report, Payments Landscape in Argentina: Opportunities and Risks to 2022, reveals that the overall card payment value in Argentina increased at a strong CAGR of 39.9% during 2014–18, rising from ARS489.5bn (US$13.0bn) to ARS1.9 trillion (US$49.8bn). This value is expected to reach ARS3.9 trillion (US$104.6bn) by 2022.
Ravi Sharma, Senior Payments Analyst at GlobalData, comments: “Argentina has traditionally been a cash-dominated society due to the high unbanked population and limited public awareness of electronic payments.
However, to boost electronic payments and reduce consumer dependence on cash, the government has taken several initiatives such as promoting the use of payroll cards, mandating merchants to install point of sale (POS) terminals, and lowering merchant service fees.”
To drive card acceptance among merchants and professionals, the Federal Administration of Public Revenue made it obligatory in February 2017 for merchants to install POS terminals. Retail and wholesale businesses, as well as professionals offering services in health, culture, sports and entertainment fall under the purview of this regulation.
The government also reduced the merchant service charge on debit card transactions from 1.5% to 1.1%, effective from January 2018, with plans to further reduce this to 0.8% by 2021, thereby making card acceptance cheaper for merchants.
Sharma concludes: “While cash will continue to dominate the overall payment landscape, these measures will certainly drive electronic payments and bring down cash dependence in the long run.”