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Market Research Report

Payments Landscape in Argentina: Opportunities and Risks to 2022

Published by GlobalData Product code 633381
Published Content info 65 Pages
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Payments Landscape in Argentina: Opportunities and Risks to 2022
Published: April 9, 2019 Content info: 65 Pages
Description

Cash remains the most popular payment instrument in Argentina, accounting for 80.0% of the country's total payment transaction volume in 2018; this was mainly due to the high unbanked population, inadequate banking infrastructure, limited public awareness of electronic payments and low acceptance of payment cards at merchant outlets. However, the government has been encouraging the use of payment cards by promoting the use of payroll cards, lowering interchange fees and mandating merchants to install POS terminals.

Debit card penetration in Argentina stood at 1.1 cards per individual in 2018. The government has been encouraging the adoption of debit cards by strongly promoting the use of payroll cards, as well as reducing interchange fees. In 2016, BCRA introduced guidelines for account opening and switching between banks. Financial inclusion initiatives are expected to drive banking and debit card penetration. All major banks now offer payroll accounts for customers.

Credit cards are the preferred card type for payments, accounting for 68.2% of the total card payment transaction value in 2018. Driving credit card transaction volume and value are Ahora plans, which enable cardholders to purchase products in interest-free installments. The Ahora program was first introduced in September 2014, and since its inception until the third quarter of 2018, ARS339bn ($9.0bn) in sales were made. Currently the plan is available at more than 350,000 stores in Argentina.

Argentina is the third-largest e-commerce market in Latin America, after Brazil and Mexico. E-commerce in Argentina recorded a significant review-period CAGR of 52.4%, to reach ARS195.7bn ($5.20bn) in 2018. Credit and debit card usage accounted for 38.2% of total e-commerce transaction value in 2018. The most important reasons cited by consumers in Argentina for using credit cards online are comfort and convenience. Alternative payments such as Mercado Pago, Rapipago, Pago Facil and PayPal are also used for online shopping.

The report "Payments Landscape in Argentina: Opportunities and Risks to 2022", provides detailed analysis of market trends in the Argentinian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cards, credit transfers, direct debits, and cheques during the review-period (2014-18e). The report also analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2018e-22f). It also offers information on the country's competitive landscape, including market shares of issuers and schemes. The report brings together research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers detailed regulatory policies and recent changes in regulatory structure.

The report provides -

  • Current and forecast values for each market in the Argentinian cards and payments industry, including debit, credit and charge cards
  • Detailed insights into payment instruments including cash, cards, credit transfers, direct debits, and cheques. It also, includes an overview of the country's key alternative payment instruments
  • E-commerce market analysis
  • Analysis of various market drivers and regulations governing the Argentinian cards and payments industry
  • Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards

Companies mentioned: Banco de la Nacion, Banco Provincia, Banco Galicia, Banco Macro, Santander Rio, BBVA Frances, Visa, Mastercard, American Express, Diners Club, Cabal, Tarjeta Naranja

Scope

  • To offer convenient and faster payment services, the BCRA introduced an instant payment service called DEBIN in November 2016, which provides immediate debit. The service became operational from September 15, 2017, and enables financial institutions to debit funds from their customers' bank accounts (with prior authorization) to make payments on a 24/7 basis. DEBIN allows payments in Argentine pesos, US dollars and between accounts of the same currency. A maximum of ARS50,000 or $5,000 can be transferred via ATMs, while a maximum of ARS100,000 or $12,500 can be transferred via internet banking. Recurring payments can also be arranged.
  • The advent of digital-only banks in Argentina is likely to further accelerate the shift towards electronic payments. In January 2019, the digital-only bank Brubank was launched in Argentina. This account can be opened free of charge, and there is no monthly account maintenance fee. An account can be opened within few minutes, and a Visa debit card is offered. Previously, the digital-only bank Wilobank was launched in June 2018, for which customers are offered a savings account, personal loans and a Mastercard-branded debit and credit card. As of February 2019, the bank had a customer base of 33,000. Individuals upload ID documents to open a bank account.
  • In November 2018, the government extended the Ahora program, enabling credit cardholders to purchase products in three, six, 12, and 18 interest-free installments. The program is valid until April 30, 2019. The credit cards of international and domestic schemes are all eligible to participate in the plan. The Ahora program was first introduced in September 2014, and ARS339bn ($9.0bn) in sales were made from its inception to the third quarter of 2018. During January-October 2018, sales worth ARS106.0bn ($2.82bn) were made, which was 27% more than during the same period in 2017. As of February 2019, the plan is available at more than 350,000 stores in Argentina.

Reasons to buy

  • Make strategic business decisions, using top-level historic and forecast market data, related to the Argentinian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Argentinian cards and payments industry.
  • Assess the competitive dynamics in the Argentinian cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Argentina.
  • Gain insights into key regulations governing the Argentinian cards and payments industry.
Table of Contents
Product Code: FS0228CI

Table of Contents

  • Market Overview
  • Executive Summary
  • Card-based Payments
  • Merchant Acquiring
  • E-commerce Payments
  • Alternative Payments
  • Payment Innovations
  • Payments Infrastructure & Regulation
  • Appendix
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