Argentina is the third largest e-commerce market in Latin America that observed US$ 5.3 billion of sales in 2015. The country is poised to overtake Mexico as the second largest retail e-commerce market in the region over the forecast period with a CAGR of 40 percent during 2016-2020.
As e-commerce migrates to mobile, consequently the need for mobile and digital wallets is also expected to increase. Banks here see potential disintermediation and are looking to shape up their strategies to the digital payments accordingly.
3. Market Context
Argentina is the third largest e-commerce market in Latin America that observed US$
5.3 billion of sales in 2015. The country is poised to overtake Mexico as the second
largest retail e-commerce market in the region over the forecast period with a CAGR
of 40 percent during 2016-2020.
As e-commerce migrates to mobile, consequently the need for mobile and digital
wallets is also expected to increase. Banks here see potential disintermediation and
are looking to shape up their strategies to the digital payments accordingly.
4. Key Insights
With a view to lowering electronic payment costs and eventually eliminating the use of
cash, Argentina's Central Bank Banco Central de la Republica Argentina (BCRA) has
approved new regulations encouraging the country’s banks to develop a "mobile
wallet" platform. Also, the banks developing mobile wallets were required to provide
businesses with a point of sale device and create online "payment buttons" for e-
commerce transactions.
5. Key Insights
The new regulation has envisaged creation of a mobile app that allows users to make
immediate transfers remotely from mobile devices and to receive debit card payments.
Also, the new measures are intended to help businesses to save commissions of 1.5
percent on each transaction and allow them to immediately receive funds rather than
having to wait 48 hours.
Under the new regulations BCRA also explored the possibility of eliminating bank
transfer charges for smaller companies with revenues of US$ 180,000 a year.
6. PayNXT360 View
Amidst Argentina's current struggling political and economic environment marred with
volatile currencies, inflation, and limited access to foreign exchange; PayNXT360
believes digitization of financial services could increase chances of success with
value added services. Also mobile wallets will help address financial inclusion and
security concern in Argentina where just 28% of the population pay bills via debit
cards, and a further 135 million people have bank accounts but pay utility bills in
cash.
7. To Know More
To know more and gain deeper understanding of how mobile
payment industry is shaping up in Argentina, click here