According to the World Bank Global Findex Survey 2014, Argentina has made substantial progress in terms of financial inclusion, with the percentage of the Argentine population aged 15 or above with a bank account increasing from 33.1% in 2011 to 50.2% in 2014. Although financial inclusion has improved, a significant proportion of the population in the country still does not have access to the formal banking system

Cash is the most preferred payment instrument in Argentina, accounting for 82.1% of the total transaction volume in 2014. However, the share of cash-based transactions, in terms of transaction value, gradually decreased between 2010 and 2014, from 47.1% in 2010 to 34.3% in 2014, due to the government’s sustained efforts to reduce dependence on cash. Even during the country’s financial crisis, the government promoted the use of payment cards by offering tax incentives and by strongly promoting the use of payroll cards.

Government efforts to drive demand for payment cards
The implementation of mandatory wage accounts regulation by the BCRA has encouraged cashless transactions. The regulation requires payroll funds to be directly credited into wage accounts. It was first introduced in 1997 and came into force in 2001; it is now strictly enforced in Argentina. The account is also used for the administration of government benefits such as retirement, pension and social welfare funds. As reported by the BCRA, there were 7.7 million wage accounts in Argentina as of March 2014. Increasing number of wage accounts has led to high use of payroll debit cards.

Argentina’s government implemented the Forced Bankarization policy in 2001 to encourage use of payment cards. Under this policy, consumers are reimbursed 3% of value added tax (VAT) on purchases made with a credit card, and 5% on those made with a debit card. This has led to a significant increase in debit and credit card transactions over the last five years.

Cash-based vouchers remain a preferred mode of payment – a hindrance for the less-cash society
Payment companies are developing voucher-based payments to cater to the significant unbanked population, allowing consumers to make payments without the need for a bank account or pay-ment card. Cash-based payments through vouchers such as Pagofacil and Rapipago remain the preferred mode of payment among consumers. Pagofacil users make a purchase, print a voucher and take it to a local payment location to make cash payment. Payments can be made at 4,000 Pagofacil locations across the country. Similarly, Rapipago vouchers are also accepted at 6,000 locations.

Although voucher-based payments provide a convenient shopping experience for consumers due to its wide acceptance, it is also a hindrance for the government’s vision to turn Argentina into a less-cash society.

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Restrictions on transactions abroad is anticipated to hinder transaction volume
In an attempt to control drops in foreign currency reserves, which fell by 29% in 2013 to $30.9bn (ARS168.7bn) – a seven-year low – in December 2013 the government of Argentina introduced restrictions on online shopping and use of payment cards abroad.

Consumers may make tax-free online purchases up to $25 from foreign websites, with 50% tax charged on purchases above this amount. Products imported through foreign online retailers need to be collected from the customs office.

Argentina’s government increased tax on all credit and debit card purchases made abroad from 20% to 35% in December 2013, and also made it mandatory to report every purchase to the tax authority – Administración Federal de Ingresos Públicos (AFIP). These restrictions are expected to result in slow growth in card transaction values over the next five years (2015-2019).

Growing infrastructure provides scope for card payments
The number of ATMs in Argentina increased from 12,806 in 2010 to 19,522 in 2014, at a CAGR of 11.12%. It is anticipated to increase further between 2015 and 2019, at a CAGR of 4.52% to 25,107 in 2019. This growth was primarily due to the increase in banked population, as well as competitive pressures that forced banks to launch ATMs and self-service branches in areas covering the unbanked population to attract new customers.

Banks in Argentina have encouraged the direct deposit of salaries through the use of debit cards, which contributed to the increase in overall use of ATMs. In addition to basic financial transactions, cardholders can carry out operations at ATMs, including payments for water, gas and electricity.

The number of POS terminals in Argentina increased at a CAGR of 8.70%, from 330,210 in 2010 to 461,000 in 2014. With the increased number of installed POS terminals at retail outlets, the potential for card-based payments is expected to grow. In addition, the market for POS terminals is expected to grow significantly over the next five years due to the expansion of the retail sector.
Growing retail and e-commerce markets

The retail industry declined during the in the last five years from $130.7bn in 2010 to $117bn in 2014, though it recorded positive growth in local currency terms. Retail industry expansion has been driven by improved annual disposable income, rising consumer demand for high-quality products and rapid urbanisation.

The number of shopping centers, supermarkets and hypermarkets has grown across major cities in Argentina.

Demand for food, apparel, furniture, consumer electronics and automobiles maintained steady growth from 2010 to 2014. Retail sales and increasing consumer adoption of payment cards are expected to drive growth in the overall cards and payments industry over the next five years.

E-commerce in Argentina increased recently, from $1.9bn in 2010 to $5.9bn in 2014.

Increasing internet penetration is driving e-commerce. Domestic operators such as Americanas, Submarino and Shoptime provide various online payment options and are expanding their online presence to attract new customers.

Argentina’s e-commerce market is still in its early stages, but studies indicate that the country has a growing community of internet users, with a penetration rate of 64.7% – the second-highest in Latin America.

Banco Itaú Argentina partnered with Atrapalo, a Spanish online entertainment website, in August 2014. Banco Itaú Argentina customers with Visa and MasterCard in Argentina will have access to products offered on

Value of Credit Transfers

Value of Cheque Payments

Value of Payment Cards

Value of Credit Transfers in Argentina

Value of Cheque Payments in Argentina

Value of Payment Cards in Argentina

Value of Payment Cards in Argentina