Fintech Department Bulletin | Fintech Legal News in Argentina | Edition No. 13.
by Daniel Levi
In this bulletin, you will find a selection of the main legal news related to the fintech and digital banking market in Argentina.
Transfers 3.0
New model for instant payments in Argentina
As anticipated in previous bulletins, the Central Bank of Argentina (BCRA) launched a complete update of the instant electronic payments system that has existed in the country to date, bringing a much more ambitious, open, and interoperable model, that intends to interconnect in equal grounds all banking accounts and non-banking payment accounts, following principles of open banking.
This new model, called “Transfers 3.0”, was approved by the Board of the BCRA on October 29th, and was regulated through Communication “A” 7153 on October 30th.
The general principles that will govern this system are the following:
• Will allow transfers and payments between bank accounts (CBU) and non-banking payment accounts (CVU) offered by PSPs, indistinctly.
• It will be an open system (transfers will be possible among any Bank/PSP to any Bank/PSP).
• It could be used for either payment to merchants or non-profit payments.
• It will admit captures with QR Code, debit or prepaid cards, contactless devices, and any other technologies available in the future.
• It will be available 24/7/365, with an operative level of 99.92%.
• Transfers will be settled in a maximum term of 15 seconds.
• Transfers could be made between accounts in Pesos (up to 15,000 UVAs daily) and between accounts in US$ (up to US$12,500 daily).
• Internal transfers must be treated equally as external transfers.
• Competition and interoperability among different schemes are promoted.
The new regulation also envisions different roles that could be assumed in the schemes that offer instant payments: Administrators, Account Providers, Authorizers, Processors, Compensators, Liquidators, Ordering Bank, Recipient Bank, Forwarder, Initiator and Acquirer. Banks and PSPs are allowed to exercise more than one role at the same time, and they will be subject to the same rules when performing similar roles.
The position of Administrator (who will be the one setting the rules and contracts for the other participants) must be authorized by the BCRA. Initially, the BCRA appointed the following companies as Administrators: COELSA, Interbanking, Prisma, and Link.
In order to ensure the interoperability, the BCRA created a Standardized Interface of Payments (IEP), that will work within the Interbanking Chamber of Means of Payments (CIMPRA), with the relevant participants of the sector. The Chamber will establish the technological standards for the interconnection, including through APIs.
Regarding costs, the merchant discount rate was capped at 0.8% and will be distributed among the different participants of the scheme, depending on the size of the merchant involved. There will be a free-of-charge tranche for the first 3 months, up to a certain revenue. Payments will be at no cost for consumers and for transfers among accounts of the same person.
The first phase of implementation of this new model is set for next December 7th, 2020, in which the main feature will be the interoperability of the QR Code. A second phase is scheduled for May 31st, 2021 and it is expected that the system will be functioning in full by November 29th, 2021.
The BCRA also amended the traditional system of electronic transfers between bank accounts (now called “Transfers in Batch”), which will have a settlement term of 24hs (for Pesos) and 48hs (for US$).
New rules for Non-Financial Providers of Credit
Lending fintechs will now be subject to the Financial Entities Law
By means of Communication “A” 7146 dated October 22nd, the BCRA imposed new measures applicable to Non-Financial Providers of Credit, defined as “those legal entities that, without being financial entities, carry out -as a main or supplementary activity- offer of credit to the general public, granting certain financings on a regular basis”.
In this respect, the BCRA established that these companies will now be subject to the Financial Entities Law (only with respect to this activity), as well as to a series of regulations issued by the BCRA (related to publicity and transparency of interest rates, protection of consumers, management of claims, among others).
The scope of this measure is quite extensive, including -among other subjects- fintech companies performing lending activities, issuers of credit cards (for financings not governed by the Credit Card Law), and home appliance sales companies that offer financings.
According to this rule, as of December 1st, 2020, all these companies must be obliged to apply for registration with the BCRA when the volume of their financings reaches an aggregate amount of AR$10 million, regardless of the source of their funding.
Before this new regulation, the registration requirement was only applicable when the volume of financings reached AR$20 million, and just for purposes of accessing banking funding.
The registration with the BCRA will not authorize these companies to perform financial intermediation, to capture deposits from the public, or to advertise activities or use names that are reserved for banks.
The non-financial providers of credit will also need to provide to the BCRA, on an annual basis, a report of compliance prepared by an independent auditor.
By being subject to the Financial Entities, both the companies and their authorities may be imposed similar sanctions as the ones applying for banks, in case of breach of these regulations.
Exhibition of Means of Payment
It is clarified in which cases advertising is for marketing or informative purposes
By means of Resolution No. 449/2020 dated October 23rd, 2020, the Secretariat of Internal Commerce set forth that all providers of goods and services must inform in their facilities and websites all the means of payment that they accept, either electronic or otherwise.
To this end, merchants must post signs and/or other identification material, in both their windows, cashiers, and websites, with a precise and clearly visible exhibition of the accepted means of payment.
The resolution also clarifies that any signs, logotypes or similar material which area does not exceed 300 cm2 will be considered exclusively of an informative purpose for consumers.
This clarification is relevant, as it may help to solve long discussions between organizers of means of payments and certain local tax authorities about when to consider that a sign or post has marketing purposes (and thus may be taxable) and when not.
Program for “Collaborative Production of Knowledge-Based Economy”
Financial aid will be given to innovative projects
Through Resolution No. 240/2020, the Secretariat of Industry, Knowledge-Based Economy and External Trade Management, created the program “Collaborative Production of Knowledge-based Economy”, in order to provide financial assistance to certain projects.
According to the Resolution, the main objective of the program is to provide financial assistance to innovative projects that (i) combine at least two activities comprised in the recently amended Law for the Promotion of the Knowledge-Based Economy (save certain exceptions); (ii) promote the reactivation of the economic activity; and (iii) are carried out by two or more legal entities in a collaborative and joint manner.
Benefits such as access to loans at subsidized rates of up to AR$100 million, as well as Non-Refundable Contributions (NRA) of up to AR$24 million, may be granted.
This is one of the first regulations issued in our country that seem to foster and be inspired by the global tendency of open innovation.
Court declares the seizure of a digital wallet
On a Mercado Pago’s account
By a resolution dated September 17th, 2020, the First Chamber of the Civil and Commercial Court of Appeals of Lomas de Zamora solved in favor of a request for a precautionary measure to declare the seizure of a digital wallet in the case “M. R. E. C/ M. L. A. on a collection of fees”.
The Court held that there is no doubt that Fintech companies, without being subject to the BCRA’s control, carry out banking and financial activities, and that they have disruptively generated new paradigms, trends, and changes to which justice and its operators must adapt.
Following this line of argument, the tribunal held that, given that Fintech companies (in this case, the providers of payment accounts) can manage, intervene, participate, and/or intermediate in the trade of goods, credits, values, and assets of third parties, those constitute common collateral for creditors of the holder of the account and, therefore, can be subject to liens and encumbrances in favor of such creditors.
New Impulse to the “SMEs Electronic Invoice”
An Open Trade System is implemented
By means of Resolution No. 103/2020, the Secretariat of Small and Medium-Sized Enterprises (SMEs), under the National Ministry of Productive Development control, established new measures that have the effect of further promoting the use of electronic invoices by SMEs.
For such purposes, the BCRA was authorized to implement the “Open Trade System for Electronic Credit Invoices for SMEs” as a tool for the over-the-counter circulation, negotiation, transmission, and cancellation of Electronic Credit Invoices.
As a consequence, financial institutions must promptly adapt their systems so that the SMEs Electronic Credit Invoices can be managed as electronic checks.
For further information or clarification on these issues, please do not hesitate to contact us.
Sincerely,
Daniel Levi
María Shakespear
Pablo J. Torretta
Luciana Liefeldt
Belén Astelarra
Franco Montiel
This bulletin contains summaries of standards that are published and referred to. They are in no way complete or imply legal advice. If you require legal advice, please contact us.