Payment in Argentina Potential Addressable Market

Addressable Market Calculation

This report quantifies the potential addressable market for key identified whitespaces in the Argentinian payment industry, focusing on the potential annual revenue opportunity for new solutions and services addressing these gaps.

1. Inflation-Resistant Financial Products Integrated with Payments

Key Assumptions and Detailed Rationale:

• A1: Financially Active Adult Population: The addressable market includes individuals who actively use financial products, including digital wallets and bank accounts. While there are nearly 200 million CBU+CVU accounts, these belong to the adult population, with many individuals holding multiple accounts. We use the total adult population as the base and estimate the portion actively using digital financial services.
  • Rationale: High digital account penetration suggests a large portion of the adult population is addressable for digitally integrated financial products.
• A2: Number of SMEs: Small and medium-sized enterprises are a key segment facing significant challenges from inflation impacting their working capital and cash flow.
  • Rationale: SMEs require financial tools embedded in their operational workflows (like payments) to manage inflationary pressures effectively.
• A3: Percentage of Active Adults Interested: An estimated portion of digitally active adults would be interested in payment-integrated products that help preserve value or offer inflation-adjusted features.
  • Rationale: Inflation is a major pain point (Current Pains Analysis), driving consumer behavior towards value preservation and flexible financing (Consumption Trends Analysis).
• A4: Percentage of SMEs Interested: An estimated portion of SMEs would adopt payment-integrated inflation-resistant tools, such as inflation-indexed accounts or stablecoin-linked payment options, to protect their revenues and manage costs.
  • Rationale: SMEs are highly vulnerable to inflation's impact on their business models and seek stability (Current Pains Analysis, Value Chain Report).
• A5: Estimated Average Annual Revenue per Active Adult User: The potential annual revenue generated per adopting adult user through fees (e.g., premium features, transaction fees on specific instruments) or a small margin captured by the provider.
  • Rationale: Reflects the value users gain from these products and the provider's ability to monetize. This is an estimate given the nascent nature of the market.
• A6: Estimated Average Annual Revenue per Interested SME: The potential annual revenue generated per adopting SME through transaction fees, platform fees for integrated services, or a margin on facilitating inflation-resistant payments/financing.
  • Rationale: Reflects the value SMEs gain (e.g., reduced loss of value, access to better financing) and the provider's monetization strategy. This is an estimate.

Formula: Potential Annual Revenue Market Size = (A1 * A3 * A5) + (A2 * A4 * A6)

Researched Numbers with Rationale and Sources:

• A1: Financially Active Adult Population: Approximately 37 - 41 million adults. Argentina's population is 46 million (Value Chain Report). With nearly 200 million CBU+CVU accounts among adults, a very high percentage is digitally addressable. We estimate 80-90% of the adult population is financially active digitally. [INDEX]
  • Source: Value Chain Report on the Payment Industry in Argentina; Economía Solidaria reference on CBU+CVU accounts. [INDEX]
• A2: Number of SMEs: Estimates vary, but commonly cited figures for registered SMEs in Argentina range from 600,000 to over 850,000. Let's use a range of 600,000 to 850,000.
  • Source: Various reports on the Argentinian economy and business landscape. (e.g., CEPAL reports, local business chambers - general knowledge).
• A3: Percentage of Active Adults Interested: Given the severity of inflation, interest is likely high. Estimate 40-60%.
  • Rationale: Direct response to a major pain point; desire for value preservation.
• A4: Percentage of SMEs Interested: SMEs are highly exposed to inflation. Estimate 50-70%.
  • Rationale: Strong business need for financial stability tools.
• A5: Estimated Average Annual Revenue per Active Adult User: This could be a small fee or margin. Estimate AR$ 10,000 - AR$ 30,000 annually per user (ranging from basic features to more advanced investment links).
  • Rationale: Speculative, based on potential fee structures for value-added financial services in a high-inflation environment.
• A6: Estimated Average Annual Revenue per Interested SME: Could be a combination of transaction fees on specific instruments, platform fees, or a share of benefits from integrated financing. Estimate AR$ 80,000 - AR$ 250,000 annually per SME.
  • Rationale: Speculative, reflecting higher transaction volumes and the potential for B2B service fees compared to consumers.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: (37,000,000 * 0.40 * 10,000) + (600,000 * 0.50 * 80,000) = 148,000,000,000 + 24,000,000,000 = AR$ 172,000,000,000 Upper Bound: (41,000,000 * 0.60 * 30,000) + (850,000 * 0.70 * 250,000) = 738,000,000,000 + 148,750,000,000 = AR$ 886,750,000,000

Potential Annual Revenue Market Size: AR$ 172 billion to AR$ 887 billion

2. Comprehensive & Affordable Digital Solutions for Micro-Merchants and the Informal Sector

Key Assumptions and Detailed Rationale:

• A1: Estimated Number of Informal Businesses/Micro-Merchants: A significant portion of the Argentinian economy is informal (~36% of retail spend is cash - Value Chain Report), representing a large number of small businesses not fully integrated into the formal financial system. This segment is the primary target.
  • Rationale: This group currently operates largely outside the formal digital payment ecosystem.
• A2: Percentage Willing to Adopt: An estimated portion of these informal/micro-merchants would adopt digital payment solutions if they are affordable, simple, and provide clear benefits (e.g., increased sales, security, potential path to formality).
  • Rationale: Lowering costs and simplifying technology (SoftPOS, Tap-to-Phone) addresses key adoption barriers (Current Pains Analysis, Ongoing Changes Signals).
• A3: Estimated Average Annual Digital Transaction Value per Adopting Merchant: The average value of transactions these newly included merchants would process digitally per year. This will be lower than formal SMEs but represents captured cash volume.
  • Rationale: Reflects the shift from cash to digital for this segment.
• A4: Estimated Average Percentage Revenue Capture (MDR/Fees): The average percentage of transaction value captured by the payment service provider. This is expected to be lower than traditional MDRs to encourage adoption.
  • Rationale: Business model for serving this cost-sensitive segment.
• A5: Estimated Average Annual Value-Added Service Revenue per Adopting Merchant: Additional annual revenue per merchant from bundled services like simplified accounting, inventory tracking, or micro-financing leads.
  • Rationale: Provides additional monetization avenues beyond just transaction processing for a low-margin segment.

Formula: Potential Annual Revenue Market Size = (A1 * A2 * A3 * A4) + (A1 * A2 * A5)

Researched Numbers with Rationale and Sources:

• A1: Estimated Number of Informal Businesses/Micro-Merchants: Difficult to obtain a precise number. Given 36% cash in retail (Value Chain Report) and many micro-businesses, we can estimate this as a significant number of entities. Let's use a range based on the total number of businesses and informality estimates. If there are 600k-850k formal SMEs and a significant informal sector, a range of 1 million to 2 million informal businesses/micro-merchants seems plausible as a target group.
  • Source: Derived from analysis of informal economy size and number of formal SMEs (Value Chain Report).
• A2: Percentage Willing to Adopt: Estimate 30-50%, assuming affordability and simplicity are key drivers.
  • Rationale: Addresses major pain points (High Costs, Informality) and leverages new tech (SoftPOS) and simpler onboarding (KYC-lite). [INDEX], [INDEX], [INDEX]
• A3: Estimated Average Annual Digital Transaction Value per Adopting Merchant: Highly variable. Estimate AR$ 3,000,000 - AR$ 8,000,000 per year (equivalent to roughly AR$ 250k - AR$ 670k monthly).
  • Rationale: Speculative, representing a portion of their current cash turnover shifted to digital.
• A4: Estimated Average Percentage Revenue Capture (MDR/Fees): Lower than traditional card MDR (2.2-3.5%), perhaps closer to A2A QR rates (<0.8%) or slightly higher with basic service bundles. Estimate 0.7% - 1.5%.
  • Rationale: Needs to be significantly lower than traditional fees to attract this segment (Current Pains Analysis). [INDEX]
• A5: Estimated Average Annual Value-Added Service Revenue per Adopting Merchant: Could be small monthly fees for a software bundle. Estimate AR$ 12,000 - AR$ 36,000 annually (AR$ 1k - AR$ 3k monthly).
  • Rationale: Represents revenue from integrated, low-cost business tools.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: (1,000,000 * 0.30 * 3,000,000 * 0.007) + (1,000,000 * 0.30 * 12,000) = 6,300,000,000 + 3,600,000,000 = AR$ 9,900,000,000 Upper Bound: (2,000,000 * 0.50 * 8,000,000 * 0.015) + (2,000,000 * 0.50 * 36,000) = 120,000,000,000 + 36,000,000,000 = AR$ 156,000,000,000

Potential Annual Revenue Market Size: AR$ 9.9 billion to AR$ 156 billion

3. Universal Interoperability Beyond Basic QR (Pull Payments, Loyalty, Refunds)

Key Assumptions and Detailed Rationale:

• A1: Total Annual Digital Payment Transaction Value: The total value of transactions flowing through the current digital payment system provides the base for estimating the impact of enhanced interoperability.
  • Rationale: Improved interoperability impacts the entire digital ecosystem, increasing volume or enabling new value capture on existing volume.
• A2: Estimated Percentage Increase in Digital Transaction Volume: Enhanced interoperability (e.g., seamless pull payments, integrated loyalty) reduces friction and encourages greater use of digital payments in scenarios currently handled by cash or more cumbersome methods.
  • Rationale: Addresses "Interoperability Hiccups" and "Operational Complexity" pains, leading to more frequent digital usage. [INDEX], [INDEX]
• A3: Estimated Percentage Revenue Captured on Incremental Volume: A small percentage of the value of additional transactions generated specifically due to enhanced interoperability could be captured by entities providing the core interoperability layer or services (e.g., clearing houses, scheme operators, platform providers).
  • Rationale: Represents the monetization of the efficiency and reach provided by deeper interoperability.
• A4: Estimated Annual Revenue from New Interoperability-Enabled Services: Revenue from services made possible or significantly easier by universal interoperability, such as cross-platform loyalty point management, unified reconciliation dashboards, or integrated financial management tools.
  • Rationale: Addresses the "Streamlined Multi-Rail Integration" unmet need and creates new revenue streams.

Formula: Potential Annual Revenue Market Size = (A1 * A2 * A3) + A4

Researched Numbers with Rationale and Sources:

• A1: Total Annual Digital Payment Transaction Value: Sum of Debit, Credit, Prepaid card transactions and Immediate Transfers value from 2024 data. AR$ 51.7 tn (Debit) + AR$ 70.6 tn (Credit) + (Prepaid growth suggests maybe AR$ 5-10 tn total) + AR$ 51 tn (Immediate Transfers Nov 2024 alone, implies >AR$ 51 tn annually from Nov-Dec spike, let's estimate AR$ 60-80 tn for full year transfers). Total A1 estimate: AR$ 180 tn - AR$ 210 tn.
  • Source: Value Chain Report on the Payment Industry in Argentina, Infobae. [INDEX], [INDEX], [INDEX]
• A2: Estimated Percentage Increase in Digital Transaction Volume: Hard to predict precisely, but reducing friction and enabling new use cases could drive significant growth, especially pulling volume from cash and checks. Estimate 5-15%.
  • Rationale: Based on the impact of similar initiatives elsewhere and the identified pain points.
• A3: Estimated Percentage Revenue Captured on Incremental Volume: This would likely be a very small percentage at the infrastructure or platform level. Estimate 0.05% - 0.15%.
  • Rationale: Reflects potential per-transaction fees for routing/clearing enhanced transactions or scheme-like fees on new flows.
• A4: Estimated Annual Revenue from New Interoperability-Enabled Services: This is highly speculative, based on potential subscription fees for unified dashboards, loyalty platforms, etc., used by merchants and potentially consumers. Estimate AR$ 5 billion - AR$ 20 billion.
  • Rationale: Represents the value of solving the "Streamlined Multi-Rail Integration" pain point.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: (180,000,000,000,000 * 0.05 * 0.0005) + 5,000,000,000 = 4,500,000,000 + 5,000,000,000 = AR$ 9,500,000,000 Upper Bound: (210,000,000,000,000 * 0.15 * 0.0015) + 20,000,000,000 = 47,250,000,000 + 20,000,000,000 = AR$ 67,250,000,000

Potential Annual Revenue Market Size: AR$ 9.5 billion to AR$ 67.3 billion

4. Data-Driven SME Financing Embedded in Payment Services

Key Assumptions and Detailed Rationale:

• A1: Estimated Number of SMEs: The total number of formal SMEs in Argentina.
  • Rationale: This is the target segment for embedded financing.
• A2: Percentage Underserved by Traditional Financing: A significant portion of SMEs find it difficult to access traditional bank credit due to stringent requirements or high interest rates.
  • Rationale: This addresses the "Funding Constraints" and "Affordable Working-Capital" pains. [INDEX]
• A3: Percentage Willing to Use Embedded Financing: The estimated portion of underserved SMEs willing to access financing offered directly through their payment service provider, leveraging their transaction history.
  • Rationale: Convenience, speed, and potentially more accessible terms compared to traditional channels would drive adoption.
• A4: Estimated Average Annual Financing Amount per Adopting SME: The average amount of credit or working capital provided per year to these SMEs through embedded financing solutions.
  • Rationale: Represents the scale of financing needs addressed.
• A5: Estimated Average Annual Net Revenue Margin: The average percentage margin captured by the financing provider (payment company or partner) on the financing amount, after accounting for funding costs and potential losses.
  • Rationale: Business model for lending.

Formula: Potential Annual Revenue Market Size = A1 * A2 * A3 * A4 * A5

Researched Numbers with Rationale and Sources:

• A1: Estimated Number of SMEs: 600,000 - 850,000.
  • Source: Various reports on the Argentinian economy and business landscape. (e.g., CEPAL reports, local business chambers - general knowledge).
• A2: Percentage Underserved by Traditional Financing: Given high interest rates (>110% annual) and bank requirements, a large portion of SMEs are underserved. Estimate 50-70%.
  • Rationale: Direct consequence of the "Funding Constraints" pain point. [INDEX]
• A3: Percentage Willing to Use Embedded Financing: Assuming solutions are accessible and terms reasonable, a good portion would adopt. Estimate 40-60%.
  • Rationale: Addresses the need for affordable and accessible working capital.
• A4: Estimated Average Annual Financing Amount per Adopting SME: This is highly variable based on business size and need. Estimate AR$ 5,000,000 - AR$ 15,000,000 (e.g., revolving credit lines or short-term loans).
  • Rationale: Speculative, representing typical working capital needs for SMEs.
• A5: Estimated Average Annual Net Revenue Margin: This needs to cover funding costs, risk, and profit. Given high local rates, margins could be significant but also reflect risk. Estimate 10% - 25% (net of funding and risk).
  • Rationale: Based on potential interest income less cost of capital and expected losses.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: 600,000 * 0.50 * 0.40 * 5,000,000 * 0.10 = AR$ 60,000,000,000 Upper Bound: 850,000 * 0.70 * 0.60 * 15,000,000 * 0.25 = AR$ 134,437,500,000

Potential Annual Revenue Market Size: AR$ 60 billion to AR$ 134.4 billion

5. Advanced AI-Powered, User-Centric Security & Fraud Prevention as a Service

Key Assumptions and Detailed Rationale:

• A1: Total Annual Digital Payment Transaction Value: The total value of transactions represents the volume exposed to fraud risk.
  • Rationale: Fraud losses are a percentage of transaction value, and prevention spending is related to this.
• A2: Estimated Percentage of Transaction Value Lost to Fraud: The current rate of fraud losses across the payment ecosystem, particularly high for CNP transactions.
  • Rationale: This is the core problem being addressed, representing a cost to the industry. [INDEX]
• A3: Estimated Percentage Reduction in Fraud Losses: The potential effectiveness of advanced AI solutions in preventing or detecting fraud compared to current methods.
  • Rationale: Represents the value proposition of the AI security services.
• A4: Estimated Percentage of Potential Fraud Reduction Value Captured: The portion of the value of prevented fraud that is captured as revenue by providers of AI security services (either through fees or cost savings shared).
  • Rationale: Business model for security services - either charging a fee based on volume/features or a share of savings.
• Simplified Approach: Alternatively, estimate the total current spending on fraud prevention and estimate the potential increase or shift in spending towards advanced AI services. Let's use this approach as quantifying "value captured" is harder.
  • A1 (Simplified): Estimated total annual spending by Argentinian payment ecosystem players on fraud prevention.
  • A2 (Simplified): Estimated percentage of this spending that could shift to or be supplemented by advanced AI security services.
  • A3 (Simplified): Estimated potential increase in overall spending on fraud prevention driven by the need for more effective AI solutions.
• Simplified Formula: Potential Annual Revenue Market Size = A1 (Simplified) * A2 (Simplified) + A3 (Simplified)

Researched Numbers with Rationale and Sources:

• A1: Total Annual Digital Payment Transaction Value: AR$ 180 tn - AR$ 210 tn.
  • Source: Value Chain Report on the Payment Industry in Argentina, Infobae. [INDEX], [INDEX], [INDEX]
• A2: Estimated Percentage of Transaction Value Lost to Fraud: CNP fraud rate is 0.13% of value (Value Chain Report). Total fraud might be slightly higher across all channels. Estimate 0.15% - 0.25% of total value.
  • Source: Value Chain Report on the Payment Industry in Argentina. [INDEX]
• A3: Estimated Percentage Reduction in Fraud Losses: Advanced AI could potentially reduce detectable fraud by a significant margin. Estimate 30-60%.
  • Rationale: Based on industry potential for AI in fraud detection.

• A4: Estimated Percentage of Potential Fraud Reduction Value Captured: Highly speculative. Let's use the simplified spending approach instead.

• A1 (Simplified): Estimated total annual spending on fraud prevention by Argentinian FIs, PSPs, and processors. This includes software, hardware, manual review teams, chargeback costs not recovered. Difficult to find a direct number for Argentina. Based on global benchmarks (often 5-10% of revenue or a fixed cost per transaction/volume for security), applied to the Argentinian context. Let's estimate AR$ 15 billion - AR$ 40 billion annually.

  • Rationale: Based on estimated operational costs and industry benchmarks for security spend.
• A2 (Simplified): Estimated percentage shift/supplementation towards advanced AI services. Estimate 40-70%.
  • Rationale: Reflects the move away from older systems and adoption of new AI solutions.
• A3 (Simplified): Estimated potential increase in spending as AI provides better ROI on fraud prevention. Estimate AR$ 5 billion - AR$ 15 billion annually.
  • Rationale: Reflects the need to invest more in advanced tech to combat rising fraud.

Calculated Potential Addressable Market (Annual Revenue for AI Security Services):

Lower Bound: 15,000,000,000 * 0.40 + 5,000,000,000 = 6,000,000,000 + 5,000,000,000 = AR$ 11,000,000,000 Upper Bound: 40,000,000,000 * 0.70 + 15,000,000,000 = 28,000,000,000 + 15,000,000,000 = AR$ 43,000,000,000

Potential Annual Revenue Market Size: AR$ 11 billion to AR$ 43 billion

6. Offline and Connectivity-Resilient Payment Solutions for Rural & Underserved Areas

Key Assumptions and Detailed Rationale:

• A1: Estimated Number of Micro-Merchants/SMEs in Rural/Underserved Areas: Businesses in areas with limited connectivity are the primary target for acceptance solutions.
  • Rationale: These businesses currently rely heavily on cash due to infrastructure gaps (Value Chain Report, Current Pains Analysis). [INDEX]
• A2: Estimated Number of Adults in Rural/Underserved Areas: Individuals in these regions are the target for user-side solutions.
  • Rationale: These individuals face barriers to using digital payments consistently (Current Pains Analysis).
• A3: Percentage of Rural Micro-Merchants Willing to Adopt: The estimated portion of rural businesses that would adopt digital acceptance if reliable, connectivity-resilient solutions were available and affordable.
  • Rationale: Addresses the "Rural Connectivity & Offline-Capable Solutions" pain. [INDEX]
• A4: Percentage of Rural Adults Willing to Use: The estimated portion of rural adults who would use digital payments more frequently if connectivity issues were mitigated.
  • Rationale: Addresses the "Rural Connectivity & Offline-Capable Solutions" pain from the consumer side.
• A5: Estimated Average Annual Revenue per Adopting Rural Micro-Merchant: Annual revenue generated per merchant from transaction fees and potentially hardware/service fees for offline-capable solutions.
  • Rationale: Business model for serving this segment.
• A6: Estimated Average Annual Revenue per Adopting Rural Adult User: Annual revenue generated per user, potentially from basic account fees or transaction fees if applicable, though likely low.
  • Rationale: Represents the value captured from enabling consumer-side digital payments.

Formula: Potential Annual Revenue Market Size = (A1 * A3 * A5) + (A2 * A4 * A6)

Researched Numbers with Rationale and Sources:

• A1: Estimated Number of Micro-Merchants/SMEs in Rural/Underserved Areas: Defining "rural/underserved" is challenging. Let's estimate a portion of the total SME/micro-merchant population is in areas with connectivity issues. If there are 1.6M-2.85M total businesses (formal & informal est.), and 4G coverage is 66% in some rural areas (Value Chain Report), a significant portion operates with connectivity challenges. Estimate 300,000 - 700,000 businesses.
  • Source: Derived from total business estimates and connectivity data for rural areas (Value Chain Report). [INDEX]
• A2: Estimated Number of Adults in Rural/Underserved Areas: Similarly, estimate a portion of the adult population lives in areas with connectivity issues. Argentina's population density varies greatly. Estimate 5 million - 10 million adults.
  • Rationale: Based on general knowledge of Argentina's geography and population distribution, and connectivity gaps. [INDEX]
• A3: Percentage of Rural Micro-Merchants Willing to Adopt: Assuming solutions work, interest should be high to overcome cash limitations. Estimate 40-60%.
  • Rationale: Direct solution to a major operational barrier.
• A4: Percentage of Rural Adults Willing to Use: Assuming solutions are reliable and accessible (e.g., offline QR on basic smartphones), adoption could be significant. Estimate 50-70%.
  • Rationale: Desire for convenience and access to digital economy benefits.
• A5: Estimated Average Annual Revenue per Adopting Rural Micro-Merchant: Lower transaction volumes than urban, potentially higher hardware/maintenance cost if specialized devices are needed. Estimate AR$ 60,000 - AR$ 180,000 annually.
  • Rationale: Reflects lower volume but potentially higher cost-to-serve or value from enabling sales.
• A6: Estimated Average Annual Revenue per Adopting Rural Adult User: Likely minimal per-user revenue from transaction fees on low-value payments or basic account maintenance. Estimate AR$ 500 - AR$ 2,000 annually.
  • Rationale: Reflects low-value transactions typical in some rural contexts and focus on inclusion over high per-user revenue.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: (300,000 * 0.40 * 60,000) + (5,000,000 * 0.50 * 500) = 7,200,000,000 + 1,250,000,000 = AR$ 8,450,000,000 Upper Bound: (700,000 * 0.60 * 180,000) + (10,000,000 * 0.70 * 2,000) = 75,600,000,000 + 14,000,000,000 = AR$ 89,600,000,000

Potential Annual Revenue Market Size: AR$ 8.5 billion to AR$ 89.6 billion

7. Cross-Border Payment Solutions Tailored for Argentinian SMEs and Freelancers

Key Assumptions and Detailed Rationale:

• A1: Estimated Number of SMEs Involved in Cross-Border Trade: A portion of formal SMEs are involved in importing or exporting.
  • Rationale: These are the primary business targets facing high costs and complexity in cross-border payments.
• A2: Estimated Number of Freelancers Involved in Cross-Border Work: A growing segment earning income from international clients.
  • Rationale: These individuals face significant challenges in receiving international payments.
• A3: Estimated Average Annual Cross-Border Payment Value per Trading SME: The average value of international transactions (inbound and outbound) processed by these SMEs annually.
  • Rationale: Represents the transaction volume base for revenue calculation.
• A4: Estimated Average Annual Cross-Border Payment Value per Freelancer: The average value of international payments received or sent by freelancers annually.
  • Rationale: Represents the transaction volume base for freelancer-focused solutions.
• A5: Estimated Percentage Revenue Captured on Cross-Border Volume: The percentage of the transaction value captured by the service provider through FX spreads, transaction fees, or related service fees. These are typically higher than domestic fees.
  • Rationale: Business model for cross-border payment providers.
• A6: Estimated Average Annual Value-Added Service Revenue per SME/Freelancer: Additional annual revenue from services like multi-currency accounts, compliance assistance, or integrated invoicing for international payments.
  • Rationale: Provides additional monetization and value proposition beyond just transaction processing.

Formula: Potential Annual Revenue Market Size = ((A1 * A3) + (A2 * A4)) * A5 + ((A1) + (A2)) * A6

Researched Numbers with Rationale and Sources:

• A1: Estimated Number of SMEs Involved in Cross-Border Trade: Difficult to isolate. Let's estimate 10-20% of formal SMEs are actively involved in cross-border trade. Estimate 60,000 - 170,000 SMEs.
  • Source: Derived from total SME numbers (600k-850k) and general knowledge of export/import activity.
• A2: Estimated Number of Freelancers Involved in Cross-Border Work: Hard to quantify the informal/gig economy segment precisely. Estimate 200,000 - 500,000 individuals.
  • Rationale: Growth in the global freelance economy and remote work trends suggests a significant number.
• A3: Estimated Average Annual Cross-Border Payment Value per Trading SME: Highly variable by SME size and sector. Estimate AR$ 50,000,000 - AR$ 200,000,000.
  • Rationale: Speculative, representing moderate international trade activity.
• A4: Estimated Average Annual Cross-Border Payment Value per Freelancer: Varies based on income. Estimate AR$ 5,000,000 - AR$ 15,000,000.
  • Rationale: Speculative, representing income earned from abroad.
• A5: Estimated Percentage Revenue Captured on Cross-Border Volume: Cross-border fees/FX margins are higher than domestic. Estimate 1.5% - 3.0%.
  • Rationale: Based on typical cross-border payment pricing models.
• A6: Estimated Average Annual Value-Added Service Revenue per SME/Freelancer: Could include platform fees, compliance tools, etc. Estimate AR$ 20,000 - AR$ 80,000 annually.
  • Rationale: Represents potential revenue from bundled services.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: ((60,000 * 50,000,000) + (200,000 * 5,000,000)) * 0.015 + (60,000 + 200,000) * 20,000 = (3,000,000,000,000 + 1,000,000,000,000) * 0.015 + 5,200,000,000 = 4,000,000,000,000 * 0.015 + 5,200,000,000 = 60,000,000,000 + 5,200,000,000 = AR$ 65,200,000,000 Upper Bound: ((170,000 * 200,000,000) + (500,000 * 15,000,000)) * 0.030 + (170,000 + 500,000) * 80,000 = (34,000,000,000,000 + 7,500,000,000,000) * 0.030 + 53,600,000,000 = 41,500,000,000,000 * 0.030 + 53,600,000,000 = 1,245,000,000,000 + 53,600,000,000 = AR$ 1,298,600,000,000

Potential Annual Revenue Market Size: AR$ 65.2 billion to AR$ 1,298.6 billion (Note: The wide range reflects significant uncertainty in estimating SME/freelancer cross-border activity values and the impact of FX volatility on revenue capture).

8. Payment-Linked ESG (Environmental, Social, Governance) Solutions

Key Assumptions and Detailed Rationale:

• A1: Estimated Number of Digital Payment Users (Consumers): The base of consumers using digital payments.
  • Rationale: These are the individuals who could potentially use ESG-linked features in their payment apps.
• A2: Estimated Number of Digital Payment Accepting Merchants: Businesses that already accept digital payments.
  • Rationale: These merchants could potentially integrate and promote ESG-linked payment features.
• A3: Estimated Percentage of Consumers Interested in ESG Features: The portion of digital payment users interested in features like carbon footprint tracking or micro-donations at checkout.
  • Rationale: Reflects the emerging ESG consciousness trend (Consumption Trends Analysis). [INDEX]
• A4: Estimated Percentage of Merchants Interested in Offering ESG Features: The portion of digital payment accepting merchants willing to integrate or promote ESG-linked features, potentially for reputational benefit or to attract conscious consumers.
  • Rationale: Reflects the emerging trend of businesses using digital payments to signal formality and transparency (Consumption Trends Analysis). [INDEX]
• A5: Estimated Average Annual Revenue per Engaged Consumer: Potential annual revenue from engaged consumers, likely small and perhaps from micro-donations facilitated, premium reporting, or affiliation with "green" products.
  • Rationale: Monetization potential on the consumer side for non-transactional features.
• A6: Estimated Average Annual Revenue per Engaged Merchant: Potential annual revenue from engaged merchants, possibly through platform fees for integrating ESG data, showcasing certifications, or enabling consumer micro-donations.
  • Rationale: Monetization potential on the merchant side for value-added services.

Formula: Potential Annual Revenue Market Size = (A1 * A3 * A5) + (A2 * A4 * A6)

Researched Numbers with Rationale and Sources:

• A1: Estimated Number of Digital Payment Users (Consumers): Use the financially active adult population estimate: 37 - 41 million.
  • Source: Derived from population and CBU+CVU data. [INDEX], [INDEX]
• A2: Estimated Number of Digital Payment Accepting Merchants: Use the estimate for formal SMEs (600k-850k) plus a portion of digitally adopting informal merchants (300k-700k * 30-50% adoption = 90k-350k). Estimate 700,000 - 1,200,000 merchants.
  • Rationale: Represents businesses currently addressable by digital payment providers.
• A3: Estimated Percentage of Consumers Interested in ESG Features: This is a nascent market. Estimate 5-15%.
  • Rationale: Based on emerging trends and surveys (ITC 2024). [INDEX]
• A4: Estimated Percentage of Merchants Interested in Offering ESG Features: Likely starts small, potentially among larger or consumer-facing businesses. Estimate 3-10%.
  • Rationale: Based on merchants beginning to use payments to signal transparency (Consumption Trends Analysis). [INDEX]
• A5: Estimated Average Annual Revenue per Engaged Consumer: Very low, potentially based on facilitating micro-donations or small data service fees. Estimate AR$ 200 - AR$ 800 annually.
  • Rationale: Highly speculative, reflects minimal monetization potential per user for these features currently.
• A6: Estimated Average Annual Revenue per Engaged Merchant: Could involve a small monthly fee for platform integration or reporting. Estimate AR$ 10,000 - AR$ 40,000 annually.
  • Rationale: Speculative, reflecting potential platform fees for value-added services.

Calculated Potential Addressable Market (Annual Revenue):

Lower Bound: (37,000,000 * 0.05 * 200) + (700,000 * 0.03 * 10,000) = 370,000,000 + 210,000,000 = AR$ 580,000,000 Upper Bound: (41,000,000 * 0.15 * 800) + (1,200,000 * 0.10 * 40,000) = 4,920,000,000 + 4,800,000,000 = AR$ 9,720,000,000

Potential Annual Revenue Market Size: AR$ 580 million to AR$ 9.7 billion (Note: This is the smallest estimated market, reflecting its early stage.)

References

• Banco Central de la República Argentina. Medios de pago electrónico. https://www.bcra.gob.ar/PublicacionesEstadisticas/Medios_pago_electronico.asp
• Economía Solidaria. Argentina aumentó a casi 200 millones de cuentas CBU+CVU en 2024. https://www.economiasolidaria.com.ar/noticias/economia-solidaria/argentina-aumento-a-casi-200-millones-de-cuentas-cbu-cvu-en-2024
• Infobae. Fuerte cambio en los medios de pago: las transferencias inmediatas de dinero aumentaron casi 50% en 2024. https://www.infobae.com/economia/2024/12/19/fuerte-cambio-en-los-medios-de-pago-las-transferencias-inmediatas-de-dinero-aumentaron-casi-50-en-2024/
• Value Chain Report on the Payment Industry in Argentina. (Provided Knowledge)
• Payment in Argentina Current Pains Analysis. (Provided Knowledge)
• Payment in Argentina Consumption Trends Analysis. (Provided Knowledge)
• Ongoing Changes Signals Analysis. (Provided Knowledge)
• International Trade Centre (ITC). Driving Economic Growth in Argentina Through Digital Transformation. https://www.intracen.org/news-and-events/news/Driving-economic-growth-in-Argentina-through-digital-transformation/