The Cards and Payments Industry in Argentina: Emerging Trends and Opportunities to 2019

Argentina is a steadily growing open economy in Latin America. Robust economic conditions, high GDP growth and liberal economic policy encourage foreign investment in Argentina’s banking sector.

During the 2001 economic crises in Argentina, the banking sector suffered considerably due to the policy of taking deposits in Argentine pesos and lending in dollars. After 2001, money started to go out of Argentina, deposits decreased and capital devalued, resulting in the disproportionate devaluation of deposits and loans. Banks were forced to offer devalued pesos to collect dollar loans back, resulting in huge losses. Small banks were forced to close or merge, and many foreign banks ceased operations in Argentina, leaving only a few large foreign banks. Argentina’s banking sector is therefore dominated by state-owned banks, and local private banks.

The government of Argentina allows 100% FDI in the banking sector, encouraging foreign banks to enter the market. Most foreign banks begin operations in Argentina as wholly owned subsidiaries of parent banks. The presence of foreign banks is intensifying competition in the cards and payments industry, providing more choice and better service for customers at a competitive price. Major foreign banks in Argentina include Citibank Argentina, HSBC Argentina, BNP Paribas Argentina and Standard Bank Argentina.

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 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.

Argentina’s national payment system is governed by the Financial Institutions Act, the Checks Act and regulations framed by the BCRA. Argentina’s government set up the Argentinean Interbank Committee for Payment Means (CIMPRA) to better manage and develop the national payment system. CIMPRA consists of the BCRA, banks, banking associations and automated clearing houses.

The report brings together GlobalData’s research, modeling and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages.

Scope

• Analyzes of the key economic, infrastructural and business drivers affecting the Argentinean cards and payments industry

• Detailed insights into payment instruments, including: check payments, credit transfers, direct debits, payment cards and cash transactions

• An overview of Argentina’s key alternative payment instruments

• Values for Argentina's cards and payments industry in 2014, and forecast figures to 2019

• An outline of the current regulatory framework in the industry

• Insight on the strategies adopted by various banks and other financial institutions

• Profiles of major banks in Argentina's cards and payments industry

Key Highlights

• What fiscal restrictions on credit and debit card purchases were introduced by the Argentinean government to control a drop in foreign currency reserves? How is this likely to impact the industry to 2019?

• What restrictions has the central bank of Argentina, Banco Central de la República Argentina (BCRA), imposed on interest rates for personal loans and credit cards in an effort to increase consumer spending and to restrict lenders from charging high interest from consumers? How is this initiative anticipated to impact banks’ profitability? What is the likely response from banks as a result?

• Gain insight into the developments around American Express and the launch of EMV cards in Argentina. How is the implementation of EMV expected to positively impact on the cards and payments market over the forecast period?

Reasons to buy

• Make strategic business decisions in each category of Argentina's cards and payments industry utilizing GlobalData’s top-level historic and forecast market data

• Identify the key market trends and growth opportunities in Argentina's cards and payments industry and align your strategy to those which offer you the best opportunity to grow your market share

• Assess the key regulations governing Argentina's cards and payments industry and address those which may have a negative effect on your revenues

Companies mentioned

Banco Galicia

Banco Santander Río

Banco Nación

Banco Provincia

Banco Francés

Visa

MasterCard

Cabal

Tarjeta Naranja

American Express

Diners Club

Table of Contents

1 Definitions and Methodology

1.1 Definitions

1.2 Methodology

2 Key Facts and Events

3 Executive Summary

4 Payment Instruments

4.1 Current Payment Environment

4.2 Alternative Payment Instruments

4.2.1 PayPal

4.2.2 Pagofacil

4.2.3 Rapipago

4.2.4 Paysafecard

4.2.5 MercadoPago

5 Regulations in the Cards and Payments Industry

5.1 Regulatory Framework

5.2 Anti-Money Laundering (AML)

5.3 Foreign Direct Investment (FDI) Regulations

6 Analysis of Cards and Payments Industry Drivers

6.1 Demographic Drivers

6.2 Economic Drivers

6.3 Infrastructure Drivers

6.4 Business Drivers

7 Market Segmentation

7.1 Market Segmentation and Targeting

7.1.1 Consumer cards

7.1.2 Commercial cards

8 Payment Cards

8.1 Payment Cards Analysis

8.1.1 Volume and value of payment card transactions by type

8.1.2 Personal vs commercial cards

9 Debit Cards

9.1 Debit Card Market Analysis

9.1.1 Debit card transaction volumes and values by channel

9.1.2 Debit card scheme and issuer shares in terms of transaction value

10 Credit Cards

10.1 Credit Card Market Analysis

10.1.1 Credit card transaction volumes and values by channel

10.1.2 Credit card scheme and issuer shares in terms of transaction value

11 Charge Cards

11.1 Charge Card Market Analysis

11.1.1 Charge card transaction volumes and values by channel

11.1.2 Charge card scheme shares in terms of transaction value

12 Commercial Cards

12.1 Commercial Card Market Analysis

13 Card Issuers

13.1 Banco de Galicia y Buenos Aires

13.2 Banco Santander Río

13.3 Banco de la Nación Argentina

13.4 Banco de la Provincia de Buenos Aires

13.5 BBVA Banco Francés

14 Prepaid Cards

14.1 Prepaid Card Market Analysis

15 Merchant Acquiring

15.1 Merchant Acquiring Market Analysis

16 Appendix

16.1 Tables

16.2 Contact GlobalData

16.3 About GlobalData

16.4 GlobalData’s Services

16.5 Disclaimer

List of Tables

Table 1: Key Definitions

Table 2: Annual Average Exchange Rate

Table 3: Argentina – Key Facts, 2014

Table 4: Regional Benchmarking of Argentine Payment Cards, 2014

Table 5: Argentina – Mode of Entry of Foreign Banks

Table 6: Argentina – Cards for High-Income Consumers, 2015

Table 7: Argentina – Cards for Travelers, 2015

Table 8: Argentina – Cards for Students and Young Population, 2015

Table 9: Argentina – Cards for Shoppers, 2015

Table 10: Argentina – Commercial Cards Comparison and Key Features, 2015

Table 11: Argentina – Payment Instrument Transaction Values (ARS Billion), 2010–2014

Table 12: Argentina – Payment Instrument Transaction Values (US$ Billion), 2010–2014

Table 13: Argentina – Payment Instrument Transaction Volumes (Million), 2010–2014

Table 14: Argentina – Number of Payment Cards in Circulation by Type (Million), 2010–2019

Table 15: Argentina – Volume of Payment Card Transactions by Type (Million), 2010–2019

Table 16: Argentina – Value of Payment Card Transactions by Type (ARS Billion), 2010–2019

Table 17: Argentina – Value of Payment Card Transactions by Type (US$ Billion), 2010–2019

Table 18: Argentina – Personal and Commercial Card Transaction Volumes ( Million), 2010–2019

Table 19: Argentina – Personal and Commercial Card Transaction Values (ARS Billion), 2010–2019

Table 20: Argentina – Personal and Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 21: Argentina – Number of Debit Cards in Circulation (Million), 2010–2019

Table 22: Argentina – Debit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 23: Argentina – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 24: Argentina – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 25: Argentina – Number of Debit Cards in Circulation by Scheme (Thousand), 2010–2014

Table 26: Argentina – Debit Card Transaction Values by Scheme (ARS Billion), 2010–2014

Table 27: Argentina – Debit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 28: Argentina – Debit Card Transaction Values by Issuer (ARS Billion), 2010–2014

Table 29: Argentina – Debit Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 30: Argentina – Number of Credit Cards in Circulation (Million), 2010–2019

Table 31: Argentina – Credit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 32: Argentina – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 33: Argentina – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 34: Argentina – Number of Credit Cards in Circulation by Scheme (Million), 2010–2014

Table 35: Argentina – Credit Card Transaction Values by Scheme (ARS Billion), 2010–2014

Table 36: Argentina – Credit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 37: Argentina – Pay Later Card Transaction Values by Issuer (ARS Billion), 2010–2014

Table 38: Argentina – Pay Later Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 39: Argentina – Credit Card Balances Outstanding by Issuer (ARS Billion), 2010–2014

Table 40: Argentina – Credit Card Balances Outstanding by Issuer (US$ Million), 2010–2014

Table 41: Argentina – Number of Charge Cards in Circulation (Thousand), 2010–2019

Table 42: Argentina – Charge Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 43: Argentina – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 44: Argentina – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 45: Argentina – Number of Charge Cards in Circulation by Scheme (Thousand), 2010–2014

Table 46: Argentina – Charge Card Transaction Values by Scheme (ARS Million), 2010–2014

Table 47: Argentina – Charge Card Transaction Values by Scheme (US$ Million), 2010–2014

Table 48: Argentina – Number of Commercial Cards in Circulation (Million), 2010–2019

Table 49: Argentina – Commercial Cards Transaction Value (ARS Billion), 2010–2019

Table 50: Argentina – Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 51: Argentina – Number of Prepaid Cards in Circulation (Million), 2010–2019

Table 52: Argentina – Prepaid Card Transaction Values (ARS Billion), 2010–2019

Table 53: Argentina – Prepaid Card Transaction Values (US$ Billion), 2010–2019

Table 54: Argentina – Merchant Acquirers’ Transaction Volume by Card Type (Million), 2010–2019

Table 55: Argentina – Merchant Acquirers’ Total Transaction Value (ARS Billion), 2010–2019

Table 56: Argentina – Merchant Acquirers’ Total Transaction Value (US$ Billion), 2010–2019

Table 57: Argentina – Merchant Acquirers’ Transaction Volume (Million), 2010–2014

Table 58: Argentina – Merchant Acquirers’ Transaction Value (ARS Billion), 2010–2014

Table 59: Argentina – Merchant Acquirers’ Transaction Value (US$ Billion), 2010–2014

Table 60: Argentina – Retail Outlets and Merchant Accounts (Thousand), 2010–2019

List of Figures

Figure 1: Argentina – Payment Instrument Shares by Transaction Value (%), 2010 and 2014

Figure 2: Argentina – Payment Instrument Shares by Transaction Volume (%), 2010 and 2014

Figure 3: Argentina – Total Population and Structure, 2014

Figure 4: Argentina – Economic Indicators, 2010–2019

Figure 5: Argentina – Number of ATMs, POS Terminals and Commercial Bank Branches

Figure 6: Argentina – Retail Sales and E-Commerce Values (US$ Billion), 2010–2014

Figure 7: Argentina – Cards and Payments Industry Segmentation by Card Type, 2015

Figure 8: Argentina – Growth in Payment Cards Transaction Value and Number of Cards in Circulation by Type, 2010–2019

Figure 9: Argentina – Volume and Value of Payment Card Transactions by Type (%), 2010–2019

Figure 10: Argentina – Personal and Commercial Cards, Transaction Volume and Value (%), 2010–2019

Figure 11: Argentina – Growth in Debit Cards Transaction Value and Number of Debit Cards in Circulation, 2010–2019

Figure 12: Argentina – Pay now, Average Interchange Fees: Intra-Network Transactions (%), 2010–2014

Figure 13: Argentina – Pay now, Average Merchant Service Charge: Domestic Transactions (%), 2010–2019

Figure 14: Argentina – Debit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 15: Argentina – Debit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 16: Argentina – Growth in Credit Card Transaction Values and Number of Credit Cards in Circulation, 2010–2019

Figure 17: Argentina – Pay later, Average Interchange Fees: Intra-Network Transactions (%),

Figure 18: Argentina – Pay later, Average Merchant Service Charge: Domestic Transactions (%),

Figure 19: Argentina – Credit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 20: Argentina – Credit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 21: Argentina – Growth in Charge Cards Transaction Value and Number of Credit Cards in Circulation, 2010–2019

Figure 22: Argentina – Charge Card Transaction Volumes and Values by Channel, 2010–2019

Figure 23: Argentina – Charge Card Scheme Shares in Terms of Transaction Value (%), 2014

Figure 24: Argentina – Number of Commercial Cards in Circulation and Transaction Value, 2010–2019

Figure 25: Argentina – Number of Prepaid Cards in Circulation and Transaction Value, 2010–2019

Figure 26: Argentina – Merchant Acquiring Transaction Volume and Value, 2010–2019

Figure 27: Argentina – Merchant Acquirers’ Market Shares in Terms of Transaction Volume and Value (%), 2014

Figure 28: Argentina – Number of Retail Outlets and Total Merchant Accounts (Thousand), 2010–2019

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