In July of this year, the Central Bank enabled operations with e-checks (electronic checks). The objective was clear: simplify operations, reduce costs and reduce the number of tickets rejected, which during 2018 reached a whopping 66%, a figure comparable to that recorded in 2001.
This rule, which requires entities to receive deposits but not to issue them, applies to all current accounts and points to more agile, transparent and simple transactions. Three banks (Galicia, Supervielle and Hipotecario) advanced rapidly in their implementation and bet not only to provide users with the functionalities provided for the first stage (the deposit) but also the issuance, endorsement and custody.
While the digital version is consolidated, several entities began to implement the deposit of remote checks appealing to the "best friend" of the modern man: the cell phone. This modality allows the documents to be digitalized and "sent" without the need to take the physical paper to the branch, with all the advantages that this implies:
- Facilitates the operation, since it can be performed from anywhere
- Improves the availability of deposited funds
- Extend the time to complete this procedure
- Binda greater security than the transfer of securities
- Generates a historical archive of data and images for online consultation and verification
- Enables the connection of this information with the company's accounting
For Sebastián Stranieri, CEO of the computer security company VU, this type of solutions allows for complete traceability, starting with the verification of the identity document. That is, if the person is who they say they are.
"Its implementation is part of the digital transformation, both for institutions and for citizens. The adoption of new technologies is one of the actions that will have a positive impact on the system, which is already discussed at the tables of the Central Bank and soon in the National Securities Commission ".
Endorsed by the Central Bank
With the advancement of technology and the proliferation of digital tools, the Administrator firm San Juan (ASJ) developed Scancheck, the first app to "deposit" checks with the phone.
This app was first implemented by Banco Santa Fe, which, like ASJ, belongs to the Petersen Group. It operates under the name PayCheck. In the beginning (2016), it enabled a direct channel for the request: the interested parties entered the site and just by completing the data they were contacted by the entity to coordinate the registration of the service.
"As part of the evolution, the possibility of making these deposits online was extended from the PC to the cell phones, from an app that allows users to send checks through their smartphones and then do not need hardware to digitize them" , assures the signature.
Based on this experience, the Central Bank accepted the initiative, encouraged the creation of products of the same characteristics and designed a special regulation.
This provision allows the use of mobile app, homebanking or any mechanism provided by the entities to electronically send the images of the front and back of the check. From the BCRA they state: "The documents deposited in this way must contain the legend 'submitted electronically for payment' on both sides".
According to the regulations, which apply to both common and deferred payment, the user must keep the original on paper for 60 days from the electronic deposit, during which time it may be required to submit it. After that period, you can destroy it.
Currently, Administradora San Juan has this solution implemented in nine banks and estimates that 35% of all instruments presented in such entities pass between the web and mobile app.
"Today, physical checks coexist with the e-check, which is usually used for high-volume operations. Although it is a means, it is also a credit tool widely used by small and medium-sized companies," says Alberto iProUP Murad, general manager of Administrator San Juan.
"The implementation of this type of tools has great advantages in a country like Argentina, where geographical distances are large and, in case of having a check rejected, contacting the issuer to return the physical paper is a real problem," says Esteban Lett -Brown, CEO and founder of Checks, a platform that verifies the state of collectibility of this instrument.
The ICBC bank is one of those that already has this tool, from which they assure that "it has a very good reception among customers". "There are many queries and users want to know how it works, especially because of its potential," Alejandro Ansaldo, product manager at ICBC, tells iProUP.
The entity offers the online deposit option and will soon complete the product offer by offering issuance, endorsement and custody, which will increase the level of use gradually.
"It has multiple benefits: it is 100% digital, easy to use, significantly reduces emission costs, can be transmitted by endorsement with a limit of 100 times, eliminates the risks of loss and transfer of securities and allows comprehensive management control", Ansaldo explains.
For his part, Sebastián Lemos Briones, Executive Manager of Transactional Banking at Supervielle, states: "While the adoption process requires some adaptation time, those who start using it quickly ponder it."
Murad adds that the ASJ solution is "white label", so integration with the different banks is simple but subject to the particularities of each. "Each challenge depends on the developments made on the app. If necessary, we create an independent with the security required by the Bank," he notes.
Looking ahead, entities want to continue incorporating the functionality for customers to adopt as the main collection and payment tool. According to COELSA, the clearing house that performs the clearing of these instruments, so far payments were made for about $ 600 million.
"The more banks add to the issuance and endorsement functionalities of the echeq, the more volume and adoption of users will be achieved," adds the Supervielle spokesperson. We believe that it is a very good digital product and that, if we continue along this path, more and more people will begin to use it, "he remarks.
What's coming
As iProUP realized, these days are finalizing details of what will soon be announced: the discount of electronic checks in the capital market.
Simón Carman, commercial manager of Garantizar SGR, a company that operates as a leading reciprocal guarantee company (SGR), with a $ 10,000 million fund, dedicated to "endorse" these instruments to give them more reliability and facilitate access to company funding, he says to iProUP: It will be a spectacular achievement. We will be able to avoid the entire physical circuit that is not only dangerous, because it involves risks with transfers, but also very exhausting. "
"We are already in the process of setting up the platforms of Caja de Valores, so the launch will be soon," they say in Guarantee. Carman adds: "A SME must send the check to the branch; then the SGR must grant its guarantee and then it must be sent to the Securities Bank for negotiation. It is then transferred to the SME."
"With the digital discount, the firm only scans the value and it is automatically received by the SGR (for the guarantee) and the Caja. We are talking about a revolutionary change, due to the way in which the negotiation process of the main instrument will be streamlined and modernized that small businesses use today to obtain funds in the market, "he says.
According to the latest available data, the monthly volume is around $ 5.5 billion. If the annual accumulated is observed, the increase is slightly higher than 130%, something that far from being a symptom of improvement shows how the bank tap has been closed. In addition, the terms tended to contract and rarely exceed 120 days on average.
Banks see this opportunity, especially those who are leaders in the SME segment, as is the case of Supervielle. "We are already working hard to implement the discount this month or at the latest," Gabriel Grasso, Cash Management Manager of the entity tells iProUP.
"The Central Bank established that since July all banks must offer the possibility of depositing or receiving an e-check. Instead, you can optionally upload the other alternatives," reveals iProUP Ansaldo of ICBC.
"Although the regulations refer to the deposit obligation, we will soon be required that the customer can issue and endorse electronic checks," he warns.
The next big deadline to add all the planned features is January. In the market, many believe that the real take off will occur when the "no-to-order" stage is issued (instead of unlimited endorsements as currently allowed), as it will give confidence to large companies and boost the volume.
"There is no possibility of falsification and it is possible to track each of the endorsers (everything is registered in COELSA). In addition, there is no rejection for manufacturing errors, which are quite common because the systems are prepared so that the e-check does not can be sent if something is wrong, "says Ansaldo.
Martín López, manager of Wholesale Products of Comafi Bank, and Javier Avalos, head of Foreign Trade and Cash Management Products, acknowledge that several entities advanced to adopt the advances established by the BCRA in their schedule and, of course, nobody wants stay behind.
"We are in the test stage before launching it massively, something that will happen very soon," they anticipate. Those who also broadcast are Galicia and Santander.
