The development of Fintech in terms of means of payment has shown significant progress in Argentina recently, according to the report published by the Central Bank of Argentina (“Central Bank“) in February 2023, which gives an account of the growth of immediate transfers and the increase of payments made via transfers initiated through interoperable QR codes. The report shows that immediate transfers (“IT“) grew by 60.2% interannual in number and 7.2% interannual in actual amounts. Likewise, IT is involving accounts of payment service providers (“PSP“) (from and/or to single virtual codes or “CVU”, from its acronym in Spanish) increased by 160.1% interannual in number and 73.7% in actual amounts, reflecting a greater dynamism in transactions from financial institutions to PSP (i.e., from single banking codes (“CBU”) to CVU). Finally, the report states that there was an increase in payments with transfers initiated through interoperable QR codes compared to January 2023 (the Central Bank report estimates an increase of 4% and 3.3% in number and actual amounts, respectively).
For this reason, the Central Bank and other regulatory authorities have issued several rules related to the financial and banking activity carried out through new and innovative technologies. The following are the most relevant regulatory developments of recent times.
Transfers from digital wallets with funds from other associated accounts – Communiqué “A” 7514 – Central Bank
On May 19, 2022, the Central Bank established that digital wallets must allow customers to enroll accounts from other financial institutions or PSPs.
In this connection, the regulation provides that users will be able to make Payments by Wire Transfer or Immediate Transfer from a digital wallet using funds deposited in other associated accounts and that, along these lines, financial institutions and PSPs must offer the operating procedure. Also, the regulation provides that the administrators of electronic transfer payment schemes must adapt their processes where necessary.
In addition, the regulation contemplates the application of anti-fraud security measures, especially regarding the consent from the holder of the account from which the funds are to be debited. Such consent may be given only once at the time of enrollment of the account and only when the holder of the debited account coincides with the individual submitting the request. Finally, the regulation provides that the immediate debit operation must cover both demand and payment accounts so that DEBINs may be ordered and/or received.
Electronic certificate for time deposits and investments – Communiqué “A” 7672 – Central Bank
On January 19, 2023, the Central Bank established that all financial institutions that take in time deposits or investments through internet banking or mobile banking services must issue an electronic certificate (“CEDIP“, from its acronym in Spanish). This certificate will be the electronic instrument evidencing such placements, which will be electronically transferable, fractionable, and clearable. The Central Bank regulation clarifies that these provisions will become effective on July 1, 2023, except for the functionalities related to fractioning, transmission for trading, and collection over the counter, which shall be operative only as of November 1 of this year.
In addition, the regulation provides that the electronic certificate will be transmissible through an electronic circulation system (“SCE“, from its acronym in Spanish) administered by Compensadora Electrónica S.A. On the other hand, the regulation sets forth that the coverage provided by the deposit insurance system will comprise placements whose ownership has been acquired through the electronic transmission of the related electronic certificate via the SCE.
Finally, the regulation sets forth that the abovementioned coverage will exclude placements whose CEDIPs are transferred as of the date on which the financial institution issuer falls within any of the cases provided for in Article 49 (temporary suspension, total or partial, of operations) of the BCRA’s Charter or Section 35 bis of the Financial Institutions Law (restructuring of the institution to safeguard credit and bank deposits).
Amendment of the regulatory framework to mitigate the risk of money laundering and terrorist financing – Resolution 14/2023 – FIU
On February 2, 2023, the Financial Information Unit (“FIU“) amended the current regulatory framework for financial and exchange institutions to revise the obligations they must fulfill to manage and mitigate the risks of money laundering and terrorist financing in keeping with the international standards, good practices, and guidelines currently in force, according to the Recommendations of the Financial Action Task Force.
Among those amendments, the FIU introduced an automatic updating mechanism setting the Adjustable Minimum Wage (“SMVM”, from its acronym in Spanish) as a benchmark and set forth that reporting entities that receive monthly deposits not exceeding four SMVM will be considered low-risk customers. On the other hand, for those cases considered high risk, the regulation provides for the application of an Enhanced Due Diligence process by the Reporting Entities. It should also be pointed out that the regulation includes indicative red flags that must be considered by the Reporting Entities to determine whether a Suspicious Transaction Report should be made.
This resolution repealed Resolution 30/2017 of the FIU as of its entry into force on April 1, 2023. However, for summary proceedings that are pending as at its effective date, or for the analysis and monitoring of facts, circumstances and compliances occurred prior to that date, the former resolution will apply.
Inclusion of PSPCPs and PSIs in the Claims Information Regime and the Transparency Regime – Communiqué “A” 7699 –Central Bank
On February 15, 2023, the Central Bank included the following reporting parties to the Claims Reporting Regime (Régimen Informativo sobre Reclamos) and the Transparency Reporting Regime (Régimen Informativo de Transparencia): (i) payment service providers that offer payment accounts (“PSPCPs”), (ii) payment service providers that perform the initiation function (“PSIs”) and (iii) payment service providers that provide the digital wallet service.
As concerns the Claims Reporting Regime, the reporting entities must inform the Central Bank monthly:
- The backlog of claims at the beginning of the reporting period,
- The number of in-claims during the reporting period, and
- The number of resolved claims during the reporting period, stating:
- average resolution time in days
- number of claims resolved in favor of the user, and
- number of claims resolved against the user.
In addition, the new regulation sets forth that the information must come from the Centralized Registry of Inquiries and Claims (Registro Centralizado de Consultas y Reclamos), with the deadline for the first submission being April 24, 2023.
On the other hand, the regulation sets forth that PSPCPs must comply only with section B “Reporting on the complete fee schedule,” and section D, “Reporting of fee changes.”
Section B must be submitted monthly and must detail the universe of fees corresponding to commissions and fees for products and/or services offered to users of financial services:
- Name of the institution,
- Month in which the fee schedule is in effect,
- Fees, and
- Increases notified to customers.
On the other, section D is reported if there is a novelty and must state:
- Fee increases and/or reductions,
- Commission additions for new products and/or services to be marketed, and
- Any change in fees.
Finally, the due date for the first submission of the monthly reporting was set at March 14, 2023 (with the fees that will be in effect during April 2023).
Compliance report by PSPCPs and PSIs – Communiqué “A” 7712 – Central Bank
On March 7, 2023, the Central Bank informed that PSPCPs and PSIs must submit a compliance report prepared by professionals or associations of registered professionals and certified by the Professional Council of Economic Sciences in which they are registered, without being a requirement that they be registered in the register of auditors referred to in the “Minimum Standards on External Audits for Financial Institutions.”
The special compliance report must be prepared following the template that the Central Bank will duly provide and certify compliance with the “Protection of Users of Financial Services” standards applicable according to the type of payment service provider concerned. Finally, the regulation provides that the report must be submitted annually to the Superintendence of Financial and Exchange Institutions (“SEFyC”).
In this regard, and following Communiqué “A” 7712 mentioned above, on March 17, 2023, the Central Bank announced that due to the complaints and claims the agency receives daily from users and consumers, PSPCPs and PSIs will become subject to its monitoring of regulated institutions. With the monitoring tool, the Central Bank seeks to encourage financial institutions, credit card issuers, and non-financial credit providers to implement preventive actions, enhance the protection of the basic rights of financial service users, and minimize incidents that may harm them. This policy is framed within the search for three basic “3P” objectives:
- Protect users of financial services from the actions of financial institutions,
- Prevent situations of frequent errors or non-compliance within the institutions, and
- Promote best practices for the benefit of users.
Revision of the minimum thresholds above which financial institutions and digital wallets must report transactions to the controlling agency – RG 5348/2023 – AFIP
The Federal Administration of Public Revenues (Administración Federal de Ingresos Públicos, “AFIP“), through General Resolution 5348/2023, revised the minimum amounts from which financial institutions and digital wallets must automatically report to the controlling agency all activities in accounts, time deposits, and card transactions.
As of May 1, 2023, the Resolution established that, in respect of accounts reported by the AFIP to exceed two hundred thousand pesos (AR$ 200,000), the following must be reported to the AFIP: (i) the accumulated amounts credited to accounts monthly, (ii) the total accumulated amount of monthly cash withdrawals, (iii) the account balances as of the last business day of the reporting month that are equal to or greater than AR$200,000 -in absolute values- in that month, and (iv) the total accumulated amount of time deposits placed during the reporting month.
In addition, when the accumulated amounts of domestic consumptions with a cardholder’s and/or additional cardholder’s debit cards -excluding cash withdrawals and any other sum not entailing consumption- are equal to or greater than one hundred and twenty thousand pesos (AR$ 120,000) in a month, they must be reported to the AFIP.
Also, parties that administer, manage, control, or process asset movements through electronic or digital management platforms for the account and order of individuals and legal entities residing in the country or abroad, including PSPCPs, must report, within the reporting period, the total income or expenses equal to or greater than one hundred and twenty thousand pesos (AR$ 120,000). They must also report the account balances as of the last business day of the monthly reporting period that are equal to or greater than AR$200,000 -in absolute values- in that month.
Lastly, when the credit or debit transactions in the accounts reported by the AFIP are bank and/or virtual transfers, the reporting institutions must report only such transactions for an amount equal to or greater than AR$ 400,000 (AR$ 400,000).
PSPCPs may not carry out or facilitate transactions with cryptoassets – Communiqué “A” 7759 – Central Bank
On May 4, 2023, the Central Bank established that PSPCPs may not carry out transactions with their customers nor facilitate them with digital assets -including crypto assets and those whose yields are tied to the variations they register- that are not authorized by a competent domestic regulatory authority or by the Central Bank of the Republic of Argentina.
The regulation sets forth that PSPCPs may not carry out this type of transactions by themselves or offer to initiate them from their applications or web platforms.
This measure seeks to mitigate the risks that transactions with this type of asset might pose to the users of financial services and to the national payment system in general.
Also, the regulation equates the rules that PSPCPs and financial entities must observe in relation to digital assets. The latter had already been subject to a similar restriction since May 2022, issued through Communiqué A 7506.
Tourists will be able to pay with electronic wallets at an exchange rate that will be based on financial dollars – Communiqué “A” 7762 – Central Bank
On May 4, 2023, the Central Bank established that, as from May 5, payments made by non-residents through electronic wallets or any other payment modality that implies an immediate debit in an account in a financial entity abroad or in a virtual account in a company abroad will be exempted from the requirement of settlement in the foreign exchange market. electronic wallets or any other payment modality that implies an immediate debit in an account in a financial entity abroad or in a virtual account in a company abroad will be exempt from the requirement of settlement in the foreign exchange market. Foreign operators of these wallets must reach agreements with local administrators in order to transfer to their financial users the benefit of making payments with QR in stores throughout the country.
According to the provisions of Communication “A” 7630, so far, the following service operations were benefited with this same measure:
- Charges for consumption made by non-residents using debit, credit, purchase or prepaid cards issued abroad.
- Charges for any type of tourist service in the country contracted by non-residents, including those contracted through wholesale and/or retail travel and tourism agencies in the country.
- Charges for transportation services of non-resident passengers with destination in the country by land.
