Payment in Argentina Emerging Technologies Analysis¶

Emerging Technologies¶

The Argentinian payment industry in 2024 and 2025 is being shaped by the increasing adoption and potential impact of several key emerging technologies. These technologies are influencing various steps of the payment value chain, from how payments are initiated and processed to how risks are managed and new services are offered.

Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are becoming increasingly crucial across the payment value chain. Their applications range from enhancing security and fraud prevention to improving operational efficiency and personalizing customer experiences. AI-powered systems can analyze vast amounts of transaction data to detect anomalies and identify potential fraudulent activities more accurately and efficiently than traditional methods. This is particularly relevant in Argentina, where card-not-present fraud rates are a concern. [Value Chain Analysis] AI can also be used to optimize credit assessment models, which is vital in Argentina's inflationary environment. Furthermore, AI can streamline back-office operations like accounts payable and reconciliation, reducing manual errors and improving efficiency. Generative AI specifically can enhance customer support and communication.

Blockchain and Tokenization: While the full-scale adoption of blockchain for core payment processing is still evolving globally, tokenization, a process often utilizing blockchain or similar distributed ledger technology, is gaining traction for enhanced security and creating new forms of digital assets. Tokenization replaces sensitive data, such as a card's primary account number, with a unique digital token, reducing the risk of data breaches. This is applicable in the Payment Initiation, Processing, and Scheme Management steps. In Argentina, there is also exploration and development in asset tokenization, including agricultural commodities, which can open new avenues for financing and investment that may intersect with the payment system. The Argentine securities regulator (CNV) launched a tokenization regime and sandbox in early 2025, signaling regulatory interest and potential for growth in this area, particularly for financial securities.

SoftPOS (Software Point of Sale) / Tap-to-Phone: This technology transforms standard smartphones or tablets into payment terminals using NFC capabilities, allowing merchants to accept contactless payments without dedicated hardware. SoftPOS significantly lowers the cost and complexity of setting up payment acceptance, making it particularly attractive for small and micro-merchants, as well as businesses in underserved areas. This directly impacts the Acceptance & Merchant Services and Payment Initiation & Authorization steps by expanding the reach of digital payment acceptance and improving convenience for both merchants and consumers. The global SoftPOS market is projected for significant growth.

Biometric Authentication: Biometric technologies, such as fingerprint and facial recognition, are being increasingly adopted for secure and convenient user authentication in payment transactions and financial services. In Argentina, there have been developments in using biometrics for identity verification, including a deal between telecommunication companies and the National Registry of Persons (RENAPER) for streamlining ID verification using fingerprints and face biometrics. Mandatory biometric checks are also being implemented for online gambling in Argentina for identity and age verification, allowing the use of digital wallets for presenting ID data. This technology primarily impacts the Payment Initiation & Authorization and Account & Instrument Provision steps by enhancing security during login and transaction approval and simplifying customer onboarding (KYC). Mastercard is also expanding its Biometric Checkout Program in Latin America.

Open Banking / Open Finance: Open Banking frameworks facilitate the secure sharing of financial data between banks and authorized third-party providers (including fintechs) with customer consent, typically through APIs. This can lead to the development of new and personalized financial products and services. While Argentina has taken some initial steps, particularly in payments interoperability with initiatives like Transferencias 3.0, a comprehensive regulatory framework for Open Banking is still in the adaptation phase compared to other countries in the region like Brazil. The concept of Open Finance, which extends data sharing to a wider range of financial products, is also being explored. Open Banking primarily impacts Account & Instrument Provision, Payment Initiation & Authorization, and potentially offers opportunities in data monetization and enhanced services across the value chain.

Cloud Computing: The adoption of cloud computing services by financial institutions and payment companies provides scalability, flexibility, and access to advanced technologies. Migrating to the cloud enables businesses to handle increased transaction volumes, improve operational resilience, enhance cybersecurity, and reduce IT infrastructure costs. Cloud infrastructure supports the development and deployment of digital payment platforms, mobile applications, and data processing capabilities across the entire value chain. Argentina has shown high digital adoption in government and business, indicating a favorable environment for cloud adoption, although regulatory quality remains an area for opportunity.

Central Bank Digital Currency (CBDC): While the Central Bank of Argentina (BCRA) has stated that issuing a CBDC is not an immediate priority, it continues to research the possibility. A CBDC would represent a digital form of the national currency issued and backed by the central bank. If implemented in the future, a CBDC could fundamentally impact the Settlement step of the value chain, potentially offering a new, low-risk settlement asset. It could also influence Account & Instrument Provision and Payment Initiation by providing alternative digital currency options.

Potential Value Chain Impact and Industry Opportunities and Challenges¶

Emerging Technology	Potential Impact on Value Chain Steps	Industry Opportunities	Industry Challenges
Artificial Intelligence (AI/ML)	Processing: Enhanced fraud detection, improved efficiency. Regulation: Better compliance tools. Account Provision: Improved credit scoring. Initiation/Account Provision: Personalized user experiences, automated support.	Reduced fraud losses, lower operational costs, more accurate risk assessment, improved customer satisfaction, new data monetization avenues.	High implementation costs, need for skilled personnel, data privacy concerns, ensuring fairness and transparency in algorithms, adapting to evolving fraud tactics.
Blockchain and Tokenization	Processing/Scheme Management: Enhanced security through data tokenization. Account Provision: Creation of new digital asset classes (e.g., tokenized assets). Settlement: Potential for new settlement mechanisms (longer term).	Increased security and reduced data breach risks, new financing and investment opportunities through asset tokenization, potential for increased transparency in certain transactions.	Regulatory uncertainty surrounding crypto assets and tokenization, technical complexity of implementation, need for industry standardization, limited public understanding and adoption.
SoftPOS / Tap-to-Phone	Acceptance & Merchant Services: Lower cost of acceptance infrastructure, wider reach to SMEs and informal sector. Initiation & Authorization: New methods for contactless payment initiation at the point of sale.	Expansion of the digital payment acceptance network, increased financial inclusion for micro-merchants, reduced hardware costs for businesses, enhanced customer convenience.	Dependence on NFC-enabled devices (primarily Android currently), security concerns with off-the-shelf hardware, need for robust software security and certification (MPoC).
Biometric Authentication	Initiation & Authorization: Enhanced security and convenience for transaction approval. Account & Instrument Provision: Streamlined and secure customer onboarding (KYC). Regulation: Support for identity verification mandates.	Improved security and reduced identity fraud, faster and more seamless user authentication, increased customer trust, compliance with regulatory requirements for identity verification.	Privacy concerns related to biometric data collection and storage, potential for false positives or negatives, need for robust and secure biometric systems, user acceptance and accessibility.
Open Banking / Open Finance	Account & Instrument Provision: Enables third parties to offer services based on shared financial data. Initiation & Authorization: Potential for new payment initiation services by third parties. All Steps: Opportunities for data-driven insights and personalized services.	Development of innovative financial products and services, increased competition and consumer choice, improved financial inclusion through data-driven offerings, potential for new revenue streams through data utilization (with consent).	Lack of a comprehensive regulatory framework in Argentina, technical challenges in API development and standardization, ensuring data security and privacy, building trust among participants and consumers regarding data sharing.
Cloud Computing	Technology & Infrastructure Provision: Scalability, flexibility, cost efficiency, access to advanced tech. All Steps: Supports digital platforms and services.	Reduced IT infrastructure costs, improved scalability and performance, enhanced operational resilience and disaster recovery, faster deployment of new services, access to advanced analytics and AI tools.	Regulatory uncertainty regarding data localization and cloud service provider oversight, security concerns related to storing sensitive financial data in the cloud, vendor lock-in risks, need for skilled cloud expertise.
Central Bank Digital Currency (CBDC)	Settlement: New form of central bank money for settlement. Account Provision/Initiation: Potential new digital currency for public use (longer term).	Potential for a safer and more efficient settlement asset, could foster innovation in payments and financial services built on CBDC infrastructure, potential for increased financial inclusion.	Significant technical and operational challenges for the central bank and participants, potential impact on the existing financial system and commercial banks, need for robust security and privacy frameworks, public acceptance and understanding.

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