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FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.
For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.
Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.
Introduction
Attitude of the country towards modern payment services
The digital payment services sector is experiencing a continuous growth in Latin America and in Argentina in particular. This growth has been amplified by the massive adoption of smartphones during the last years. The growth of the digital payment services sector has experienced even a more exponential growth due to the Covid-19 pandemic. A recent study published by GSMA Intelligence (“The Mobile Economy in Latin America 2021”) shows that the number of unique mobile subscribers in Latin America reached 450 million by the end of 2021, expecting to increase to 485 million by 2025 (73% of the population). In the same way this study shows that smartphone connections in Latin America by the end of 2021 reached 500 million (an adoption rate of 74%) and such figure is expected to increase to 600 million by 2025 (an adoption rate of 80%).
With regard to Argentina in particular, the referred study shows that the unique mobile subscription adoption reached 69% of the population by the end of 2020, expecting that such figure reaches 73% by 2025. In the same way, smartphone adoption reached 72% of the population of Argentina by the end of 2020 and it is expected that this figure reaches 81% by 2025. Furthermore, according to the study “Estudio Fintech 2020 Ecosistema Argentino” prepared jointly by the Cámara Argentina de Fintech and the International Development Bank, the number of FinTech companies within the digital payment services sector has reached a total of 64 companies by the end of 2021, compared to 27 companies existing in this sector by the end of 2018.
Legal affairs
Obligations and requirements to provide payment services or ancillary services described above
In Argentina, companies which are not financial entities and provide digital payments services have to obtain a special license and register before the Central Bank of Argentina as Payment Services Providers (“Proveedores de Servicios de Pago” or “PSPs”). The PSPs have to comply with the information and surveillance regime established by the “Superintendencia de Entidades Financieras y Cambiarias”, public authority dependant from the Central Bank of Argentina.
Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area
Although the Central Bank of Argentina is very active and follows the general trends of the FinTech market and, in particular, the segment of digital payments, regulation on this field is still in an early stage. It is likely to see further regulations of the Central Bank demanding more information and KYC/compliance requirements to be adopted by the PSPs. Additionally, and in accordance with international trends, it is feasible to expect more severe regulations related to prevention of money laundering and financing of terrorism. Finally, PSPs shall be aware of always complying with both local and international data protection regulations, adopting data security measures which follow the standards of GDPR.
Economic conditions
Market size for payment