Key facts:
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The Central Bank and large companies promote digital payments through mobile applications.
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Cash is a “common enemy,” according to the former president of the Central Bank.
With the argument of reducing the costs of issuing and using cash, the Central Bank of Argentina (BCRA) and major companies in the country encourage the growth of mobile applications for payments.
The fact was mentioned during two talks organized days ago by the Newspaper Clarín under the title “The world that comes: pay without touching the money”. There were Maria Paula Arregui (MercadoPago), Pierpaolo Barbieri (Ualá), Ignacio Giménez Zapiola (Bimo), Javier Cesari (Fiserv), Federico Cofman (Payway), Eduardo Hecker (national Bank), Brian Anthony (Banco Macro), Gabriela Saavedra (KPMG) and Sandra Yachelini (PAE).
From the business field, the idea of limit the use of cash she was defended by Yachelini. The executive of Pan American Energy, a hydrocarbon producer, says that, at gas stations, ” 46% of operations are still carried out in cash.” The handling of tickets, according to the engineer, represents “the second most important cost after the staff”.
During the dialogues, statistics from the Argentine Fintech Chamber were mentioned. This entity maintains that there are 14 million CVU (virtual accounts) created in the South American country, whose population is 45 million people. Anyway, the numbers show that the use that is given to these digital wallets of fiat money is reduced. “Informality around cash is common in all countries in the region,” says Cesari.
According to Barbieri, founder of the Ualá wallet, the low use of these payment methods is not a matter of culture or habits, but rather of the lack of incentives for users. “If we do not bet on honest, open and interoperable competition, we promote the status quowhich is cash, ” said the businessman. He adds that incentives could include the elimination of taxes on small digital transactions.
Giménez Zapiola, from Bimo, agrees with Barbieri and adds that, according to him, the private sector can also contribute to the creation of these incentives: “people value discounts and sales, that is already impregnated in the DNA of Argentines.”
The representative of the state banking sector on the panel, Eduardo Hecker, mentioned that, although the State tries to prioritize the use of digital bank accounts for the payment of subsidies, for example, the Emergency Family Income (IFE), most people withdraw cash through ATMs.
Central Bank of Argentina: “cash is the enemy”
By the Central Bank of Argentina, at the end of last year was presented the protocol “Transfers 3.0” that connect to the different payment applications for all of them to be interoperable.
With the launch of this system, CriptoNoticias reported that the then president of the BCRA, Carlos Houtbeigt, he had called cash ” the common enemy.”
From certain sectors committed to financial privacy they protested against these sayings. Among them, lawyer Camilo Jorajuría de León who wrote on that occasion: “the desire of regulators, local and worldwide, is the Chinese model. Maximum population control with zero privacy.”
Is that digital payment methods they link people with a transaction history. What may be convenient to track cases of financing illicit activities is considered, by some people, as a violation of the right to privacy and could be used for other purposes by governments.
In addition ,according to the consultancy Decisio, “to assume that the mere fact of digitizing payments will result in a low use of cash, can be an error; on the contrary, it can contribute to the stratification stage component of an asset laundering process”.
“Reducing the use of cash for common transactions will certainly help minimize the risks of money laundering. However, the fact that both virtual wallets and prepaid cards are suitable vehicles for the commission of such crimes cannot be ignored. Regional typologies account for this reality. ( … ) Remember that one of the ways to deposit money in these instruments is through cash loads in collection companies”
Decisio, consulting company.
Fight against cash in the world
Argentina is not an isolated case and proposals to limit or eliminate the use of cash, they have been raised in different parts of the world with the same arguments in all cases.
One of the most advanced nations in this fight against cash is China. Its digital yuan, which is still in the testing phase, could completely replace banknotes in the medium or long term. It is a centralized payment system, controlled by a government entity and in which, according to the director of the Central Bank of the Asian nation, “privacy is not possible”.
The European Union also has plans to launch a digital euro. On the subject, the member of the Board of Directors of the Bank of Europe, Fabio Panetta, said days ago that tracking all payments is important ” because there are problems in the field of money laundering, terrorist financing and tax evasion.”