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Argentina’s payments industry has said that a system to make credit card payments via a QR code provider is not yet ready, despite the country’s central bank saying that consumers should now be able to use it.
On May 1, a regulatory mandate came into effect for consumers to be able to make QR code payments using credit cards linked to any digital wallet.
But Mercado Pago, one of Argentina’s largest payment companies, has said it has still not enabled the service due to wrangling with issuers and rival wallets over fees, even though the technology is in place.
As noted by the central bank, the mandate prohibits acquirers and payment aggregators from discriminating on fees or settlement times based on the brand of the wallet used to make credit card payments.
Mercado Pago, Argentina’s largest digital wallet and QR code provider, has said that after two rounds of proposals, the majority of digital wallets and issuing banks have not accepted its terms of use.
“We are sitting at the negotiating table ready to discuss the conditions, as we always were,” the company said in a statement quoted by local media. “This requires dialogue and the definition of reasonable conditions. We hope that this obstacle will be resolved soon.”
Not only are stakeholders struggling to agree on costs, but Mercado Pago also said that fraud prevention, user security, intellectual property and data protection are proving to be points of contention.
Mercado Pago has more than 8m users in Argentina, and in 2018 it became the first Argentine company to launch a QR code payment system. It also claims to have invested $33m in building out its QR code system prior to launch.
“This has allowed hundreds of thousands of businesses to charge electronically for the first time, in an unprecedented advance of financial inclusion throughout the country,” the company said.
Repeated delays and failure to launch
The disagreements within the industry will come as a disappointment to the central bank, which has made QR code interoperability for credit card payments a priority over the past year.
As covered by Vixio, the central bank’s deadline for the implementation of the scheme has been pushed back numerous times.
It was first scheduled to enter into force on September 1, 2023, and was later pushed back to February 1, 2024.
The drive towards full QR interoperability for all payment methods began with a central bank initiative known as Transferencias 3.0.
Backed by an updated regulatory framework, the rollout of Transferencias 3.0 began in late 2020 and was declared “complete” in November 2021.
As planned, Transferencias 3.0 allowed for users of any digital wallet to make transfer payments using any QR code. However, the initiative did not cover credit cards.
“This produced confusion and poor payment experiences for both customers and businesses, forcing people to pay with a wallet that is the same brand as the QR displayed by the business,” said the central bank.
In May last year, to extend QR code interoperability to credit card payments, the central bank adopted Communication "A" 7769.
Since Communication "A" 7769 was introduced, the central bank said the entire payment industry has been working on the “necessary adjustments”.
However, as can be seen from Mercado Pago’s latest statement, the full range of stakeholders have yet to agree on how the costs of the new scheme should be shared.
