Digital revolution in Argentina: there are already three companies that give you a "digital wallet", so you do not use cash money
Cash is still the first payment option in the world, however, new forms are imposed that, little by little, gain space.
So much so that experts already announce the total disappearance of cash money in certain parts of the world by 2023. In countries like Sweden there are more and more businesses that no longer accept it. The Nordics and China are also on that path.
Payment systems are going through a revolution, even in the United States. Already in 2016, a Gallup poll showed that only 24% of Americans used cash to pay off most of their expenses.
In the United Kingdom, card payments had exceeded those made with tickets for the first time in 2014. In turn, consumption in electronic media increased to almost 60% among the English, according to data from the World Economic Forum.
According to most players in the regional market, 25 percent of operations are digital.
All the players aim to build user loyalty and work to offer services that generate habit and facilitate transactions, without forgetting the security and data protection.
Jorge Larravide, Commercial Manager of LINK, specialist in Technology and means of payment, details as the star product, for its enormous potential, the digital wallet.
"It is an application for a smartphone (which has the same level of security as a Mobile Banking), to which the debit cards of any Bank of the financial system are linked. The registration is very simple, with the holder's DNI, the validation of the cell phone number and the cards that are registered ".
"The use is simple, it operates as if it were a WhatsApp since a contact is selected, the amount is entered and that's it. The money is credited instantaneously and free of charge in your contact's account. This allows you to send money or request people who have the app, who have an Alias CBU, a CBU or, also, if the person who receives it is unbanked, "he says.
Larravide details that "it also serves to make payments to professionals and businesses that operate with QR code". How is it done? The merchant or professional has two possibilities, have the code printed in your local or enter the amount in your application that generates the image to collect.
The one who pays, with his cell phone, enters the Billetera Digital app, scans the QR code of the store and that's it, the one who buys and collected the one who sells, paid immediately.
In the case of LINK, the digital wallet is VALEpei, which already has more than 120 thousand downloads and around 100 thousand active users who use the application on a daily basis.
"Since its launch in mid-2016, VALEpei has grown at an exponential rate, exceeding 500%." Initially, average shipments of money per operation were around $ 300, currently exceeding $ 1,600, "highlights Larravide.
In Mercado Pago, a company that has been operating for 15 years and today is one of the most consolidated fintech, the figures are surprising.
"Only in 2018, we already got more than 1 million people who pay with our wallet, we had 1.5 million payments with QR in 3 months. This means that of the million people who use the wallet, on average they have made more than one transaction each, "says Arregui.
In addition, it lists: "Regarding the general payment market, leaving the app, in the last 12 months has processed as a platform almost 337 million operations for a total of 17.5 billion dollars in the entire region."
In terms of Mercado Point, Mercado Pago has distributed more than 2 million devices in Latin America, in addition to the prepaid card "which is the extension in the physical world of that virtual balance that we have," says Arregui. This year, they have already issued more than one million cards, in Argentina, Brazil and Mexico.
"Regarding Mercado Crédito, the line of credit that we give to sellers and buyers to operate in installments, from February 2016 until September 30, 2018, we have granted 17 thousand loans to 11 thousand sellers for a total of 1732 million dollars ", adds the VP.
Todo Pago, the player that broke into the market in 2015 being the first to present the mPos, has already shipped 210,000 devices in Argentina.
Santiago Benvenuto, Manager of New Business Development of Prismas Medios de Pagos, explains: "Consumers increasingly use cell phones for transactions, money starts to be sent, to upload the Sube, among other transactions."
"In our case, with the QR we have presence in YPF and in Farmacity. We aim to be a lifestyle platform, that is, a place where the user experience is not payment or purchase but solutions, all in the cell to make life easier, "he says.
In October, Todo Pago launched with the City Government the mPos BA Taxi, with which more than 7,000 taxi drivers registered in the application can collect travel with credit and debit cards through Todo Pago mPOS.
The driver simply has to have his mPOS team associated with his Todo Pago account and can manage his sales from his cell phone and in an integrated way to the BA Taxi app.
"Only in October had already made 5 percent of transactions with our APP, which is very encouraging," says Benvenuto, adding: "All Payment continues to grow and providing value in spaces where before there was only cash" .
"We are still looking for innovation and, in this integration of apps, we have the great potential of simplifying such an everyday event as paying a taxi. It is a benefit for the driver's business and also for the passengers, since they do not have to worry about having change, "he adds.
As for the age groups, most players say that it is the people between 30 and 50 who make the most transactions, and that there is a huge potential that extends that range from 17 years to 60 years.
Are mobile payments safe?
These apps usually incorporate other features, such as a security module that allows, for example, to give a notice of travel abroad and an extremely important feature such as temporarily Block / Unblock the use of the Debit Card.
But, when talking about protection, and more in the case of money, you have to be cautious. Although the Argentine market is going through a stage of awareness regarding the preservation of their data, there is still "the eternal struggle between the head of Systems, which asks for a budget to improve their protection policies, and the administrative officer, who considers this as an expense that could be avoided ", summarizes Gustavo Talavan, specialized in computer security and journalist in New Technologies and Internet Microsoft Certified Systems Enginee.
The specialist explains that the cracks or fissures that can have systems in terms of cyber attacks for fintech are solved by shielding the access with firewalls and security software: "The use of PENETRATION TESTS is also implemented, in order to detect possible gaps Remote access to enterprises systems".
"The fintech, new to the market, come with a great load of technology, being born in the digital world, and understand the game of the importance of data protection," he remarks.
Anyway, Talavan recommends: "The user should be cautious when activating an account in any kind of new currencies that are offered in the market.An important suggestion is the use of robust passwords, meaning the use of numbers, signs and letters, the latter in uppercase and lowercase, and they must have at least 16 characters, the more, the better ".
For the specialist, "Likewise, we are currently working on new methods of authentication, in light of the age of the password method. Biometric controls and use of electronic tokens show the use of technology in these types of secure deployments. "
The beginning of the end
In the Argentine market there are different models of digital wallets:
-The so-called PEI (Immediate Electronic Payment) that operate with debit cards in a free and instant way
-the ones that have Credit Cards (which in many cases trade pays the same tariff as other mechanisms)
- Virtual accounts that require a cash in mechanism (deposit money into the virtual account with some process either in cash or by electronic means) and then use the money to send virtual account to virtual account.
In some cases the balance of this wallet is used for the cancellation of taxes and services (Wallet of Rapi Payment), another case of wallet with virtual account is PIM.
According to Larravide, "the goal is to raise awareness that the digitalization of banking in Latin America, in addition to increasing the transparency of financial operations, saves costs for the system and increases access for low-income people or remote populations."
"We must also understand that entities that are not on the way to that transformation will leave the market in a few years. Little by little, and at our pace, we will see the increase in digital wallets-applications and hardware that will allow us to buy directly, without having to touch cash or even the credit card, "he concludes.
A long way to go
When the Internet burst in the '90s, everything pointed to a change in the way of communication and in the transformation of commerce. Then, homebanking arrived and the cell phone "mobilized" everything. It would have been hard to imagine at that time the end of cash to make room for the digital economy.
With the help of electronic banking, this great transformation has been made possible and facilitated. The truth is that today people can see your money in your online banking account, pay with credit cards and do all kinds of transactions, local and international, through your mobile, even without having a bank account .
The question that arises then is: what are the chances that the death of cash is a reality?
Paula Arregui, Senior Vice President of Mercado Pago says: "In Argentina and in many countries we are still in diapers in terms of everything that can be created and built around the digital economy. As a market, we are taking the first steps in innovating in our payment systems, but an era is beginning to take shape in which new participants are interacting with traditional entities. "
In this regard, he adds: "Therefore, I see a very prosperous scenario. Based on the changes in the rules of the game and the consumption habits of Argentines. "
Arregui's opinion is consistent with that of economist Lucas Mendola, director of finance at PayPal of Latam, who says: "In many of the countries of Latam, we are still far behind in the percentage of payments by electronic means, but it should be noted that the growth has been constant for more than 15 years ".
"We must also emphasize that the population is more prone to online payments and through mobile. Platforms like PayPal, have managed to reduce the fear that many had about online shopping. All this is a good indicator "he concludes.