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Argentine QR Code Interoperability Rule Delayed Due To 'Operational Issues'

September 6, 2023
The Central Bank of Argentina has postponed the implementation of a new rule that will require merchants to accept QR code payments from digital wallets developed by rival payment firms.

The Central Bank of Argentina (BCRA) has postponed the implementation of a new rule that will require merchants to accept QR code payments from digital wallets developed by rival payment firms.

The new rule, which is aimed at increasing interoperability between QR code payment processors, was scheduled to enter into force on Friday (September 1).

However, one day before the deadline, the BCRA announced that it will give an additional 45 days for companies to get ready for the new requirement.

The rule requires merchants that accept credit card payments via a QR code to accept payments made using any interoperable digital wallet, regardless of the brand of the QR code.

Acquirers and payment facilitators will also be prohibited from charging merchants different fees or applying different terms based on the brand of wallet used to make the payment.

If the acquirer or payment facilitator accepts money transfers too, they must offer businesses a single QR code that includes all payment methods.

After a consumer scans the QR code, they will be able to choose whether they want to make a money transfer or a credit card payment without having to switch the digital wallet to make the payment, the central bank explained.

“This way the payment experience will be more user-friendly, since the interoperability of QR codes was so far limited to money transfers only,” the BCRA said in May, when it published the rule.

Why the hold-up?

Announcing the delay, the central bank said the decision came “in response to a request by one of the providers due to operational issues”.

According to local news site Infobae, it was Mercado Pago that had requested the delay, after it argued that it was “not feasible” to implement the standards by the original deadline.

As quoted by Infobae, Mercado Pago said the workshops organised by the BCRA, which aimed to facilitate coordination between various players in the ecosystem, only reached an agreement for the standards in mid-August.

The new rule is believed to have the largest impact on Mercado Pago, which is the leader in providing QR code payments for merchants in Argentina.

Currently, Mercado Pago accepts card payments via QR code only if the card is registered in its own wallet. It rejects all other QR code card payments if the card is linked to other apps, such as bank wallets.

This closes out competitors, such as Modo, the digital wallet shared by large banks, which have complained about this situation for some time, Infobae said.

In May, Modo welcomed the adoption of the new rule, with CEO Rafael Soto tweeting that it “promotes competition, innovation and the freedom of choice, to the benefit of users and merchants alike”.

Digital wallets must share profit with customers

Meanwhile, in another surprise move regarding digital wallets, on August 24, the BCRA said payment service providers (PSPs) that offer payment accounts must transfer the entire profit they make for depositing their customers’ funds at financial institutions.

As reported by Vixio, digital wallets may benefit from surging interest rates, as they can hold their customers’ funds in cash with banks and in low-risk liquid assets.

For instance, in June, Wise reported a 73 percent rise in income during the last year, due to higher customer balances and higher interest rates.

The BCRA said, in Argentina, customer deposits generated profits of 121bn Argentine pesos ($345m) for PSPs..

A previous rule by the BCRA obliges payment firms to hold 100 percent of the customer funds in accounts at financial institutions, although 45 percent of them could be invested in national treasury bonds.

The new BCRA rule will apply to apps such as Mercado Pago, Ualá, Naranja X, Personal Pay and others.

Trade association Camara Fintech de Argentina reportedly blasted the announcement. In a statement to Cointelegraph, the association said the central bank had not consulted with the fintech sector prior to announcing the new requirement.

Additionally, it claimed that the move "unlevels the playing field” and is “not consistent with the genuine mission of the regulator to digitise our economy, since it makes an abrupt change in rules that discourages innovation and the creation of new fintech companies”.

Vixio reached out to Mercado Pago and the Camara Fintech de Argentina but did not receive a response by the time of publication.

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