Payment in Argentina Customer Challenges and Pains Analysis¶

Challenges and Pains faced by Customers¶

Based on the analysis of the provided reports, the customers in the Argentinian payment industry, categorized as individual consumers (B2C) and businesses/merchants (B2B), face several significant challenges and pains. These issues impact their ability to fully utilize and benefit from the evolving electronic payment ecosystem.

A primary challenge for both B2C and B2B customers is the prevailing Inflationary Environment. For individual consumers, high inflation rapidly erodes purchasing power, making financial planning difficult and influencing payment decisions, often driving a preference for financing options like installments. Businesses, particularly merchants, struggle with frequently adjusting pricing, managing the declining real value of electronic payment fees (like MDR), and facing increased costs for working capital in a high-interest rate environment.

Infrastructure Gaps present a significant barrier, especially for customers located outside major urban centers. Limited access to reliable internet and mobile connectivity in rural and less urbanized areas restricts the ability of both consumers and businesses to engage in digital transactions, hindering the adoption of mobile wallets, QR codes, and online payment acceptance. [Source: Value Chain Analysis] This digital divide limits market reach for businesses and access to convenient payment methods for individuals.

The enduring High Level of Informality in the Argentinian economy means a substantial portion of transactions still occur in cash. This impacts formal B2B customers (merchants) by limiting the potential volume of electronic sales and creating an uneven playing field with informal competitors. For B2C customers, it necessitates carrying cash for transactions with informal vendors and reduces the overall transparency and benefits of a digitized economy. [Source: Value Chain Analysis]

While regulatory efforts have pushed for greater connectivity, Interoperability Issues persist as a pain point. Although initiatives like Transferencias 3.0 have improved instant transfers and QR code compatibility, there are still "hiccups" in seamless integration, particularly for functionalities beyond basic push payments, such as pull payments and integrated loyalty programs. [Source: Value Chain Analysis] This complexity can be frustrating for B2C users navigating different apps and QR codes and burdensome for B2B merchants who may need to manage multiple systems or relationships to accept all relevant digital payment methods.

Security and Fraud Risks are a constant concern for customers. Argentina's card-not-present fraud rate is notably higher than the regional average. [Source: Value Chain Analysis] This poses a direct threat to B2C customers through potential financial losses and identity theft. For B2B customers (merchants), it leads to increased chargebacks, financial costs, and potential damage to their reputation, requiring ongoing investment in security measures.

The High Costs and Fees associated with electronic payments remain a pain point, particularly for B2B customers. The Merchant Discount Rate (MDR) and other fees charged by acquirers and PSPs can represent a significant operational expense for businesses. [Source: Appendix - Commercial Relationships] For B2C customers, while basic accounts and some digital wallet services may have low or no fees, costs such as annual credit card fees and high interest rates on revolving credit can be burdensome.

Regulatory and Policy Volatility, characterized by frequent changes in regulations from bodies like the BCRA, creates uncertainty for businesses operating in the payment space. [Source: Value Chain Analysis] This requires B2B customers to constantly adapt their systems and compliance procedures, which can be costly and time-consuming. While less direct for B2C customers, this volatility can indirectly impact the availability and features of payment services.

For B2B customers, especially smaller businesses, Access to Financing can be a bottleneck. High local interest rates make it expensive to secure the capital needed to invest in necessary payment acceptance infrastructure or develop innovative payment solutions. [Source: Value Chain Analysis]

Finally, the Complexity of Managing Multiple Payment Options is a notable pain for B2B merchants. As the payment landscape diversifies with cards, various digital wallets, and different QR code standards, businesses face the operational challenge and cost of integrating and managing multiple acceptance solutions to cater to customer preferences.

Prioritized table of challenges and pains.¶

Priority	Challenge/Pain	Detailed Description	Primary Customer Impact
1	Inflation	Erodes purchasing power for consumers; complicates pricing, financial planning, and working capital for businesses.	B2C & B2B
2	Informality	Significant portion of transactions occur in cash, limiting electronic adoption, reducing transparency, and creating unfair competition for formal businesses.	B2C & B2B
3	Security and Fraud Risks	High card-not-present fraud rate poses financial risks and reputational damage to both consumers and merchants.	B2C & B2B
4	Infrastructure Gaps	Limited connectivity in rural areas restricts access to and adoption of digital payment methods for individuals and businesses.	B2C & B2B
5	Interoperability Issues	Fragmentation and "hiccups" in seamless integration across different payment instruments, platforms, and functionalities (e.g., pull payments).	B2C & B2B
6	High Costs/Fees	Significant operational costs for businesses (MDR, terminal fees); annual fees and interest rates for consumers.	B2C & B2B
7	Regulatory and Policy Volatility	Frequent changes in regulations create uncertainty and require costly system updates and compliance efforts for businesses.	B2B (Indirect B2C)
8	Complexity of Managing Multiple Options	Merchants need to integrate and manage various acceptance solutions to cater to diverse payment methods.	B2B
9	Funding Constraints	Difficulty and high cost for businesses, particularly SMEs and fintechs, to access financing for investment in payment technology and infrastructure.	B2B (Indirect B2C)

Correlation with Value Chain¶

The challenges and pains faced by customers are directly or indirectly linked to the various steps and players within the Argentinian payment value chain:

Inflation: Impacts the economic value flowing through the entire chain, affecting the revenue models of Issuers (interest income), Acquirers/PSPs (real value of MDR), and the transaction behavior at the Payment Initiation and Acceptance & Merchant Services steps.
Informality: Primarily exists outside the formal electronic payment value chain, limiting the addressable market for players in Account & Instrument Provision and Acceptance & Merchant Services. It highlights a gap where the value chain is not fully capturing economic activity.
Security and Fraud Risks: Are relevant at multiple steps. Payment Initiation & Authorization is where fraud can occur. Transaction Processing involves fraud detection systems. Scheme Management sets security standards, and Account & Instrument Provision requires secure account management. These risks increase operational costs and influence the services offered by Processors, Scheme Managers, Issuers, and Acquirers.
Infrastructure Gaps: Directly impede the Payment Initiation & Authorization step in underserved areas and limit the reach of Acceptance & Merchant Services and Technology & Infrastructure Provision players in deploying necessary hardware and connectivity.
Interoperability Issues: Stem from the Scheme Management and Network Operation layer, where different schemes and networks may not fully integrate. This creates friction at the Payment Initiation & Authorization and Acceptance & Merchant Services steps, impacting the user experience for B2C and operational efficiency for B2B customers.
High Costs/Fees: Are a direct outcome of the commercial relationships and business models defined by players in Account & Instrument Provision (Issuers), Acceptance & Merchant Services (Acquirers/PSPs), and Scheme Management & Network Operation (Scheme fees). Market concentration among certain players can contribute to these costs.
Regulatory and Policy Volatility: Originates from the Regulation & Oversight step (BCRA), influencing the rules and requirements across all other steps, from Account & Instrument Provision and Scheme Management to Transaction Processing and Acceptance & Merchant Services.
Complexity of Managing Multiple Options: Is a pain for merchants (B2B) related to the Acceptance & Merchant Services step, driven by the need to accommodate the diverse instruments provided at the Account & Instrument Provision step and the varying requirements of different Scheme Management entities.
Funding Constraints: Primarily affects players in the Technology & Infrastructure Provision, Account & Instrument Provision (e.g., fintechs), and Acceptance & Merchant Services segments, limiting their ability to invest in improving the value chain and offering better services to customers.

In conclusion, the challenges and pains experienced by customers in Argentina's payment industry are not isolated but are deeply interconnected with the structure, functionality, and interactions of the various participants and steps within the payment value chain. Addressing these issues requires a holistic approach that considers the impact across the entire ecosystem.

References¶

Americas Market Intelligence. E-commerce en Argentina: estadísticas y datos 2023. https://americasmi.com/es/blog/e-commerce-argentina-estadisticas/
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/
Infobae. La Argentina es el país de América Latina donde más se usan las billeteras digitales para pagar en los comercios. https://www.infobae.com/tecno/2024/12/04/la-argentina-es-el-pais-de-america-latina-donde-mas-se-usan-las-billeteras-digitales-para-pagar-en-los-comercios/
Final Customers Identification
Value Chain Analysis
Appendix - Commercial Relationships (from Value Chain Analysis)
Appendix - Bottlenecks and Challenges (from Value Chain Analysis)
Appendix - Players Analysis (from Value Chain Analysis)