The reinstatement of the exchange rate and its subsequent hardening disrupted the means of payment used during the Macri era to pay remunerations from abroad, receive and send remittances.
In this context, companies and individuals appealed to various gadgets to skip the exchange restriction and fulfill their commitments, which gave rise to an unusual situation: financial caves (now more sophisticated in the Bitcoin era) pay up to 1.5% of commission to receive fresh dollars outside the legal circuit and offer the blue quote.
This process intensified after the October elections and the tightening of the stocks, a measure that not only affected the operation of banks but also of widely used apps to make transfers abroad. Indeed, international players - such as TransferWire or Payoneer - were forced to modify this business unit and strengthen others.
Given the obligation to liquidate exports in pesos, service firms were faced with a timely need, how to pay professionals (salaried and external) in hard currency, as an incentive to retain them in their positions, within the framework of a noticeable shortage of talents 4.0.
The director of an important Argentine technology company - which provides services to firms of the likes of Globant and other large companies globally - confesses to iProUP that it entered into crisis when the government hardened the stocks and was prevented from paying in hard currency the fees to those they occupy key positions, "mostly freelancers who go to the highest bidder."
"Normally, we used applications such as Payoneer or Transferwire, which have a lower commission than the bank, but now we cannot transfer more dollars that way," says the manager.
Strategies
After the Central Bank turned off the green banknote tap, firms began analyzing options to meet their dollar obligations. Thus, they resorted to different maneuvers:
-The creation of a mirror account in the US for the payment of fees. This operation has consequences, such as the encouragement of under-invoicing and the lower entry of foreign exchange. It is that the account holder (the recipient of the funds), transfers to the country only what is necessary and treasures the rest abroad, a circuit that feeds back.
- Go to a cave that has an account in both Argentina and the US. This, to derive funds and that their employees receive in the country the amounts weighed to the value of blue, plus an extra commission (1.5%) as an incentive to "forget" the green notes
- Resort to the classic "count with liqui" operation. It is a completely legal mechanism to send green notes outside the country: Argentine shares are bought in the local market (in pesos) and resold abroad (in dollars)
- Use bitcoin purchase and sale platforms. It applies in particular to those who want to treasure in digital currencies, always outside the domestic banking system
- Resort to subsidiaries abroad. In the case of signatures with several locations, one of them is appealed to pay salaries with the dollars generated in those units
Executives of firms that mediate in sending and receiving remittances to the public explain to iProUP that, since the crisis began and the devaluation hit hard, Argentina has become a country that is more receiving than sending money (although those who receive the funds do not get US bills)
"Those who wish to send money abroad can pay in pesos by paying a commission whose behavior closely resembles the dollar in cash with liquidation, which is what marks the market," a director of the sector reveals to iProUP.
Why is it like this? "Because at a wholesale level, these companies need to send or receive funds in dollars at some time, and they do so through cash settlement or, failing that, through the sale of bitcoins," explains the CEO of a Important local company.
For now, the financial position remains relatively calm after the establishment of the new stocks, which is manifested in the stable behavior of blue.
The suspicion in the City is that after the fever of the PASO began a strong process to overstock in greens outside the system. And if the blue does not rise more is because many who made dollars in excess are now converting them to pesos to operate. "When they are over, the upward pressure will increase," say some traders.
A growing sector
According to the World Bank, remittances to low- or middle-income countries rose to $ 529 billion in 2018. Thus, these nations accounted for 75% of the nearly $ 700 billion in shipments of small amounts made last year.
At the local level, a large number of fintech that provide this service aim to become strong in a market that - measured in hard currency - has been growing strongly, according to measurements from the World Bank itself.
These financial and technological firms have been gaining ground in the "traditional" system of international transfers that, for the most part, are processed by the classic method known as SWIFT (implemented by the Society for Global Interbank Financial Telecommunication).
These fund movements have a couple of problems, not minor by the way: they can take several days and are subject to high fees (7% on average). In addition, they are basically intended for large transactions.
As pointed out to iProUP Maximiliano Babino, general manager of Western Union Argentina (WU), the new services provided by digital signatures are more agile since in the traditional method "a bank charges a fixed charge of up to 50 dollars, while with new apps the commission is cheaper to 1.8% of the total amount. "
"In addition, under the conventional scheme a transaction can take a week. The money is not in anyone's account, which creates uncertainty," adds the executive, who emphasizes that, instead, transfers "4.0" are made instantly
In the case of the signature, it indicates that there are two channels for sending money:
- Physical: through 4,500 stores (kiosks, Carrefour Express, Correo Argentino) that are in the Western Union / Pago Fácil network. The money is delivered to the cashier and arrives at another branch in the world or is deposited in a bank account, in local currency
- Digital: through an app, where the amount is preloaded from a bank account and sent to a local or a recipient's bank account
Collection Express, one of its competitors in the extra-urban collection business, created this year the company Transfery, registered as a remittance agent in the Fiscal Information Unit (FIU).
"We take advantage of our payment network and seal global agreements with fintech such as MoneyGram, TransferTo, Xoom and Ria," Ignacio Picatto, commercial manager of Cobro Express, tells iProUP. "The Argentine market is around US $ 1.5 billion a year, between shipping and receiving," he adds. And remarks: "We continue to operate normally, the stocks did not affect."
In this way, the almost 3,000 agencies of the company work for sending (or receiving) money, with commissions that are set by the companies themselves. Transacted amounts range from US $ 300 to US $ 500.
The good timing of fintech and the free foreign exchange market had encouraged the arrival of great international players in Argentina, such as the British TransferWise. Globally, its business is made up of 70% by remittance users and 30% by freelance professionals.
"We always show transparently what the commissions will be and our exchange rate is the market average. This sets us apart from our competitors," Diana Avila, leader of operations at TransferWise for Latin America, tells iProUP.
According to the directive, "almost 70% of transfers are made on the day", for which they work "with local partners to follow the funds from beginning to end". Argentina is part of the 71 markets where money can be received from TransferWise with an average commission of 1.5%.
After the stocks, their plans to include the country within the 43 authorized for shipments and also for the launch of a Mastercard to use the funds received were delayed. However, Javier Buitrago, VP & Head of Latam de Thunes, states: "In an increasingly globalized, freelancer world, these options will continue to grow."
"We promote this category that will grow 100% in the next three years," he tells iProUP. That forecast today is in doubt about the exchange restrictions and waiting for the new government to make the purchase of dollars more flexible.
