While cash has traditionally been the most preferred payment method in Argentina, consumers are now gradually embracing electronic payments, according to GlobalData. The leading data and analytics company notes that the rise in e-commerce and contactless payments amid the COVID-19 pandemic will drive card payments, which are expected to grow to reach ARS16.8 trillion ($199.8bn) by 2024.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The COVID-19 outbreak is acting as a catalyst to the growth of electronic payments in Argentina. Although the pandemic has impacted consumer spending – in turn affecting the payments industry – overall there has been a rise in card payment at the expense of cash.”

While GlobalData expects Argentinians to begin splashing out with their cards in the future, this payment method is already seeing robust growth – a 45.5% rise expected by the end of 2021, reaching ARS6.8 trillion ($80.6bn).

Sharma continues: “This near-term growth is supported by the government’s promotion of payroll cards and the lowering of both interchange fees and merchant service charges. Further, sellers have been encouraged to install point-of-sale (POS) terminals in their stores. These changes will both give shops the means to offer digital payments and give customers a wider choice.”

As an example, Sharma points out that the government extended the Ahora credit card-based installment program until 31 July 2021, enabling credit card holders to purchase products in three, six, 12 and 18 interest-free installments. In addition to in-store purchases, the program has been extended to online purchases. From January to April 2021, 20.1 million transactions worth ARS232.4bn ($2.8bn) were made via the program.

The rise in online spending has also benefitted other electronic payments methods such as mobile wallets and contactless.

Sharma adds: “Even for shopping in-store for essentials, consumers are gradually moving from cash payments to digital payments such as contactless payments.”

To support the move to digital, Sharma notes that the contactless payment limit in Argentina was doubled from ARS2,000 ($23.79) to ARS4,000 ($47.58).