The quarantine triggered the use of digital payments and, in particular, of cards. It is that many purchases that were previously made in person moved to the online environment, which generated an acceleration in the growth of electronic commerce.
From paying services to delivery apps, customers were practically forced to extend the use of debit and credit cards to purchases they previously made in person and with other transactional means.
The apps that allow paying for products and services, such as Mercado Pago, experienced a sharp increase in the number of customers, operations and cards during the quarantine. "There is a 60% increase in users who have deposited money into digital accounts," Alejandro Melhem, country manager for Argentina, Peru and Uruguay of Mercado Pago, tells iProUP.
"Growth is mainly driven by people already banked. In other words, money is deposited with a debit card or bank transfer. This is natural and expected because during the quarantine the collection locations that allow cash to be loaded into the account were closed for several weeks, "adds Melhem.
Despite the fact that a large part of the active users in Mercado Pago already have a bank account, the application offers the possibility of requesting a credit card that the company issues in alliance with Banco Patagonia. "The requests for our card grew almost 40% so far in the quarantine," says the manager to iProUP.
In this regard, Melhem explains that those requests have to do with the need to make all transactions from the same platform. "When you can pay through the wallet, you do it; if on any occasion, whether online or in a particular store, you need to pay by card, it gives you the flexibility to do everything from the same lugae," he argues.
And he concludes: "That is why the growth of users and anchors also translated into this strong rebound in the number of cards." Regarding home delivery, he says that after some difficulties at the beginning of the quarantine, it was normalized because they were exempt from isolation. "On average, times increased, but nothing outside of our service levels."
For now, Ualá - the fintech that makes Mercado Pago the most - also registered a boom in quarantine: it reached 2 million cards issued, of which 50,000 were obtained in the first week of isolation.
In the case of this app, it is a prepaid plastic to which money is charged so that it can then be spent online or in stores, since collection platforms usually associate it with a credit card. Among the different fintech companies, it is the largest issuer of contactless plastics.
All users of this wallet receive a plastic card upon registration. Since the main public of this company are unbanked, the prepaid allows them to make their first purchases and to gain a credit history. In this way, and 10 months after reaching the million cards delivered, Ualá doubled that brand.
"Although we had planned to reach that number these days, during the months of isolation we noticed a growth in interest in joining Ualá. That is, people who download the app organically without having been impacted by our advertising actions", Andrea Arrébola, commercial director of the company, explains to iProUP.
The executive highlights that the pandemic "made certain changes in habits that could have taken years to be made in just days" and adds that "in recent times many people and SMEs were forced to turn to digital media to adapt to the context" .
Along the same lines, Arrébola details: "Many turned to using Ualá to pay their service bills (and thus avoid having to do it in person), transfers between individuals increased, card purchases and we have even seen growth in using the functionality of the mutual fund available in our app. "
Ualá was launched in October 2017 and has a presence in all Argentine provinces. In fact, seven out of ten cards were issued outside the Federal and Conurbano Capital. 7% is in the hands of minors between 13 and 18 years old and 6% of the users are foreigners.
In most cases, these are people who are not banked and the main consumptions they make with the prepaid card have to do with intangible services, which can only be paid for with plastic.
Among them, the streaming and shipping apps stand out, whose use also grew from the mandatory isolation. "Many people use it to subscribe to Netflix or Spotify, for delivery apps or to buy from e-commerce sites," says Arrébola.
At the same time, she emphasizes that the sending of money between people increased as a result of the increase in online transactionality resulting from the quarantine. "We believe they are looking for the possibility of sending or receiving money to / from a bank account (CBU) or another fintech (CVU) to settle accounts with friends or family, without cash, whenever they want and without leaving their home," closes the executive.
Another factor that underpinned credit card printing in the past two months was zero-rate loans for monotributistas. Launched by the Government to contain the effects of the crisis derived from the isolation, these financings are credited in 3 consecutive installments in the bank credit card of the applicant.
According to data from the Central Bank, more than 342,000 loans were approved for an amount that exceeded $ 42,000 million. Close to 30% of the people who processed them did not have a plastic to collect it, so 103,847 new cards had to be issued.
One of the leading banks in granting these loans to monotributistas is Santander, which has already started to disburse nearly 55,000 loans for $ 6,364 million. 32% of applicants previously had no bank account.
The management of means of payments of said entity indicates that the loans at zero rate, which were launched in early May, meant the printing of more than 16,500 new cards.
Along these lines, they recognized that the government assistance program was the main factor in the emission of plastics in recent months.
However, they assure that the activation rates continue at normal levels and rule out that there is some different behavior regarding consumption with credit cards.