Card Payments in Argentina: Central Bank Said to Plan Lower Costs for Shops

ARGENTINA · ECONOMY

Card payments in Argentina could cost shops less under a central bank plan to open a market for card receipts. El Cronista, a Buenos Aires business daily, reported on Monday 28 September that the bank had invited firms to run it.

The idea is that banks and payment firms bid against each other to pay shops early for their card sales. Infobae and Clarín had described the same plan in early September, but no official rule exists yet.

Argentina’s central bank is reported to want shops to sell their card receipts to the cheapest lender. Illustrative photo: Hloom Templates, CC BY 2.0, via Wikimedia Commons.

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What the central bank is planning

The Banco Central de la República Argentina (BCRA), the country’s central bank, wants to turn credit-card receipts into a tradable asset. In Argentina these receipts are called cupones, or coupons, and each one records money a card issuer owes a shop.

Under the plan, shops would upload their coupons to a digital platform. Banks and other lenders would then bid, and the shop could take the lowest discount, El Cronista reported.

The central bank would own the infrastructure and act as its regulator. Companies chosen by the bank would operate it, and every coupon created in the national payments system would be recorded there.

Why shops pay so much today

When a customer pays by credit card, the shop does not receive the money at once. It waits between 8 and 18 days for the payment to arrive, Infobae reported on 1 September.

Shops that need cash sooner ask their processor for an advance and pay a discount for it. Three processors dominate this business, Clarín reported: Fiserv, a US financial technology company, Payway, and Mercado Pago, the payments arm of MercadoLibre.

Bankers told El Cronista on 12 September that the discount on these advances runs at around 50% a year. They estimated it could halve once more lenders compete for the business.

For comparison, the government itself paid 29.36% a year on a fixed-rate Treasury note sold on 28 September, El Destape reported. In other words, a small shop pays far more for two weeks of cash than the state pays to borrow.

How big the card market is

Card payments in Argentina are a large, everyday flow of money. Central bank data for July show 176.2 million credit-card payments worth 10.6 trillion pesos (US$6.9 billion), Clarín reported.

Dollar figures use the central bank’s official wholesale rate, Communication A3500, of 1,528.76 pesos per dollar on 28 September. About 20.9 million of July’s card payments were made in instalments, Infobae reported.

Each instalment would become its own coupon, so a three-part purchase creates coupons due at 30, 60 and 90 days. The shop could sell one, two or all three of them early, Clarín explained.

Who is behind it and how far it has got

Clarín reported on 7 September that the central bank, led by Santiago Bausili, is working with the CNV, Argentina’s securities regulator. The newspaper tied the plan to a wider capital-markets reform that Congress must still approve.

On 3 September the bank’s vice-president, Vladimir Werning, said that reform seeks “greater financial flexibility for commerce”. He did not mention card coupons by name in that speech.

According to El Cronista, CIMPRA, an interbank committee on payment methods, sent a call to payment firms on 18 September. Firms joined a register last week and now have 15 working days to submit proposals, a period the bank can extend.

These procedural details, reported only by El Cronista, could not be independently confirmed. The central bank has published no statement on the plan, which the newspaper’s headline called secret.

The backdrop: a difficult week for markets

Argentina’s markets had a difficult Monday, with JP Morgan’s country-risk index rising to 628 points, a six-month high, Infobae reported. The index measures the extra yield investors demand to hold Argentine dollar bonds instead of US Treasuries.

That day’s debt auction is covered in Argentina’s Treasury Refinances US$5.6 Billion of Peso Debt as Markets Fall. El Destape, a pro-opposition news site, wrote that the government was facing its worst financial week of the year.

The coupon plan predates this slide, since Infobae described it on 1 September. The two share a backdrop, however: credit in Argentina is expensive, and bank lending is shrinking.

Bank loans fell 0.4% after inflation in August, said Quantum, the consultancy of economist Daniel Marx. Card and personal loans fell 1.3% after inflation.

Supporters and doubters

Mario Grinman, head of Argentina’s Chamber of Commerce and Services (CAC), said his group discussed coupons with central bank officials months ago. “We consider it would be beneficial,” he told El Cronista, because coupon backing sharply reduces default risk.

Analyst Mauro Mazza told the same newspaper the coupon rate could fall to around 25%, close to electronic cheques. He expects shops to offer 12, 24 or even 36 interest-free instalments again.

An unnamed large-bank chief executive told the same daily that the processors “are trying to stop this rule from coming out”. Fiserv, Payway and Mercado Pago were not quoted in these reports, and their position is not known.

Critics of the government point to the wider economy. El Destape wrote that President Milei’s mixed messages left markets with an image of a government disconnected from an economy in recession.

The CAC’s own consumption index fell 1.1% year on year in August, El Destape reported. The coupon plan addresses what shops pay for money, not how much their customers spend.

A second idea from the financial industry

Capital-market firms in Buenos Aires have floated a complementary idea, El Cronista reported on 28 September. They would pack coupons into trusts and investment funds, arguing that their high credit quality could bring even lower rates.

They also want the scheme to cover debit cards, bank transfers and QR-code payments, not only credit cards. The central bank has not said whether it will adopt these ideas.

What comes next, and what it does not mean

Payment firms now have 15 working days to hand in proposals, the business daily reported. After that the central bank must still choose operators, write the rules and connect the banks.

The wider capital-markets reform must also pass Congress, Clarín reported. When lawmakers will debate it is not known.

The plan is not a cap on what cardholders pay on their own card debts. Rates would come from lenders’ bids, not from a central bank decree, as Infobae and Clarín described it.

Nor does it guarantee cheaper money for shops. Infobae noted that the result depends on who may take part, how the market is regulated and how openly rates are set.

Frequently Asked Questions

What is a credit-card coupon in Argentina?

It is the record of a card sale, showing that the card issuer owes the shop money. The shop is paid 8 to 18 days later unless it sells the coupon early at a discount.

Why would a coupon market lower costs for shops?

The card issuer is a bank, so the risk of non-payment is very low, the central bank argues. Today three processors buy most coupons, and open bidding by many lenders is meant to push the discount down.

When will the new system start?

No start date has been announced. Payment firms have 15 working days to present proposals, El Cronista reported, and the central bank can extend that period.

Does this change anything for visitors who pay by card?

Not directly, because cardholders pay the same way as before. The change concerns how shops are paid, though one analyst expects more interest-free instalment offers if costs fall.

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