Pandemic effect: Argentina is one of the countries that has reduced the use of cash the most, although it remains among the highest

Argentina was among the countries that reduced the use of cash the most during the new payment scenario induced by the COVID-19 pandemic, following the trend in Latin America, although it remains among the highest. Over the past 4 years, the number of operations with Tickets when paying in person from stores increased from 44% to 37%, while operations with e-wallets increased from 4% to 11% of the total..

In Argentina, “preferences for cash declined significantly in 2020 as more consumers chose to use debit cards and mobile wallets.; for online purchases, credit cards are always preferred ”, explains the Global Payments Report, an annual report edited by Worldpay, a FIS Fintech company.

The study, which explains the trends and provides data on more than 40 countries and their habits when choosing the method of payment. In the case of Argentina, 37% of cash payments are less than Mexico (45%) and Peru (44%) but more Brazil (35%), Colombia (34%) and Chile (31 percent).

Cash was the staple of Latin American commerce, capturing the majority of spending, but it declined in the region: 31.3% in Argentina, 24.9% in Brazil and 36.8% in Mexico

Regarding the region’s behavior: “The use of cash at the point of sale in Latin America fell by 34.7% due to the pandemic, from 58.2% of operations in 2019 to 38% in 2020. The Cash was the basis of Latin American commerce, capturing the majority of spending, but down in the region: 31.3% in Argentina, 24.9% in Brazil and 36.8% in Mexico. The pandemic has accelerated the decline in liquidity in more than three years. “

The most used cards

The Worldpay report reveals more data on the activity of payment methods in Argentina. In physical commerce, the cake was distributed between 37% cash, 21% credit cards, 23% debit bank cards, 11% electronic wallets, 2% prepaid cards, among other means.

In e-commerce, 39% of payments were made by credit card, 25% by digital wallets, 17% by debit card, and 6% by wire transfer.

It also details how the card trade is distributed in Argentina. According to the Worldpay report, 61% of transactions correspond to Visa, 27% to Mastercard, 4% to American Express, 3% to Naranja, 3% to Cabal and 1% to other brands. In the 2017 edition of the report, the cast was somewhat different: Visa with 59%, Mastercard with 24%, American Express with 7% and Naranja with 5%.

In 2020, the use of cash has dropped “dramatically” and the pandemic has tested its supremacy while changing business operations. “Quarantines and social distancing requirements have resulted in an economic contraction across the region and a marked reduction in the volume of in-store transactions: the drop was 13.2% in Argentina, 12.6% in Colombia, 9, 8% in Mexico and 8.8% in Brazil. The report said.

Who replaced the cash during payment? Credit and debit cards, merchant financing (such as non-bank cards) and in particular mobile wallets. Other media such as prepaid cards have also developed.

For the region, Worldpay estimates that the decline in liquidity will continue, regardless of the evolution of the pandemic and its effects on trade. By 2024, it projects a 36% reduction in cash usage and will cede the most preferred payment location to the hands of cards and mobile wallets.

By 2024, it projects a 36% reduction in cash usage and that it will cede the most preferred payment location to the hands of cards and mobile wallets.

In the world

At the global level, the data in the report collects the multiple reasons that push a consumer to choose one or the other means of payment, where the economy is mixed with historical, cultural, technological and regulatory issues. In this mosaic of factors that differ in each country, a new one has arrived that has crossed everyone: the coronavirus.

“The pandemic has accelerated the decline in liquidity over three years, exceeding our previous projections for 2023 in 2020. Cash was used by 20.5% of physical commerce, 32.1% less than in 2019“The report noted.

The decline was repeated in all regions: 21.9% in North America, 33.6% in Europe, 34.7% in Latin America and 36.6% in Asia-Pacific. Some countries had historically low levels of cash use, such as Canada (5.4%), Norway (4.5%), United States (11.9%), Australia (8%), Hong Kong (8%) o Sweden (8%).

E-wallets retained much of the money lost, increasing their share from 19.5% in 2019 to 25.7% of transactions in 2020. “The pandemic has sparked a wave of interest in contactless payment methods, accelerating the already growing use of mobile wallets,” the report notes.

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