Financial Inclusion Almost Complete, Claims Argentina’s Central Bank

April 28, 2023
A new study by the Central Bank of Argentina finds that almost the entire country has a bank account or a payment account, while the bank hails record highs for electronic payments in the country.

A new study by the Central Bank of Argentina (BCRA) finds that almost the entire country has a bank account or a payment account, while the bank hails record highs for electronic payments in the country.

The BCRA’s financial inclusion report finds that 99.3 percent of Argentine adults, or 35.1m people, own a bank account or a payment account, up from 27.8m in 2019.

The central bank says the increase is largely due to younger people aged between 15 and 24, who had a lower representation in terms of account ownership, opening a new account for the first time.

Additionally, 54.5 percent of the adult population, or 19.2m, have financing from the wider financial system.

The report also highlights that there has been a significant increase in the number of payment accounts in the last three years across all age groups.

The Central Bank notes that in the youngest age group, between 15 and 19, there is an almost equal spread between those that have a bank account, those that have a payment account and those that have both. This seems to indicate that “the financial inclusion of very young people begins with one or another account indistinctly”.

Argentina has a relatively youthful population, with roughly 30 percent of adults aged between 15 and 30. As a result, they represent an important market segment demanding financial services in the country.

Fintech firms, particularly those that offer payment services and credits, also contribute to the adoption of non-financial credit providers among this population segment.

“Access to a payment account usually works as a gateway to other financial services, such as access to investment, credit or insurance,” the Central Bank says.

The BCRA also applauds the increase in access points to financial services, another indicator of the progress made in financial inclusion. According to the Central Bank, around 92.5 percent of the adult population lives in towns or cities with a financial services access point.

“These conditions favour the acceptance of electronic payments by local businesses and money transfers between individuals,” the BCRA said.

Payments growth

BCRA figures show all-time highs in the use of electronic payments.

On average, Argentinians make roughly 18 transactions per capita each month (213 annual transactions per capita). While this is below leading regional markets, such as Brazil and Chile, according to VIXIO analysis, the Central Bank says this is triple pre-pandemic volumes.

Those digital payment methods that are zero or lower cost, including instant payments, are also growing fast, the BCRA said.

“The high adoption of mobile phones across the population, the advancement of banking applications and the generational change in the clients of financial institutions would be some of the factors that explain this phenomenon”, according to the Central Bank.

Although the BCRA says these numbers are hitting new records in the country, they still dwarf the figures of developed countries. There are roughly 44 non-cash transactions per capita per month in the UK and around 27.7 in the EU.

As reported by VIXIO, many Argentinians are looking for alternative ways to pay as the country is facing three-digit inflation. In February, inflation passed 100 percent for the first time since the end of hyperinflation in the early 90s.

The use of cryptocurrencies is one such alternative, which may not only help Argentinians fight the devaluation of money but is also increasingly used to make payments.

Several crypto companies have partnered with Mastercard and Visa in the past year, enabling their users to pay by crypto at merchants on the networks of the card giants.

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