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This is a summary in which we have briefly described the main regulations issued so far in Argentina during the COVID-19 health emergency that affect or are related to fintech and digital banking activities.
ELECTRONIC PAYMENT INFRASTRUCTURE
Including banking and non-banking systems
By means of Communication “A” 6942 dated March 20th, 2020 (later extended by Communication “A” 6949 dated April 1st, 2020), the Central Bank of Argentina (“BCRA”) ordered the following during the social, preventive and mandatory isolation: “the Electronic Clearing Houses, the Electronic Payment System, the automated teller machines (“ATM”) and electronic funds transfer networks, the credit and debit card administrators, the acquirers and processors of electronic payment methods, payment service providers, as well as their related providers and any other market infrastructure necessary for the normal provision of services by financial entities and payment systems, must remain operative”. (View Communication “A” 6942 and Communication “A” 6949 here.)
This provision, which seems merely operational, is quite unique, given that it is the first time that the BCRA highlights the importance of both the banking and non-banking systems for the local electronic payments infrastructure.
INTEROPERABILITY BETWEEN VIRTUAL AND BANKING ACCOUNTS
Interconnection becomes mandatory
In line with the aforementioned communications, Communication “A” 6948 of BCRA, dated March 28th, 2020, provides that payment service providers that offer payment accounts (PSPs) must allow their customers to send and receive transfers of funds to and from bank accounts, payment accounts of the same PSP, and other PSPs payment accounts, using the Uniform Virtual Key (CVU). Likewise, PSPs may not delay said transfers (either to be received or sent), when made through payment structures of immediate transfer.
This provision is also quite novel, since until now the interconnection between virtual and bank accounts was not mandatory for PSPs, so while some PSPs enabled transfers to virtual or bank accounts indistinctly, others did not allow it.
It is worth remembering that, non-compliance with these rules could subject PSPs and their authorities to the same sanctions that the BCRA may impose to banks.
PAYMENT OF THE “IFE” IN VIRTUAL ACCOUNTS
In order to prevent crowding in bank premises
Through Resolution 84/2020, the National Social Security Administration (“ANSES”) established that the “Emergency Family Income” outlined by Decree 310/2020 (“IFE”) is to be paid only by bank deposits (CBU), cash drawings in Red Link ATMs, mail distribution system, or deposits in virtual wallets for beneficiaries that do not have a bank account.
An interesting point about this provision is that, originally, ANSES Resolution 8/2020 did not allow beneficiaries to collect the IFE through virtual wallets. However, after evidencing the recent crowding in bank premises to collect pensions and social security plans, ANSES changed its resolution and included theelectronic walletsas a collection method for the IFE. Notwithstanding, it is not clear so far whether ANSES will put this alternative in practice or not.
OPERATION THROUGH ATMs
During the health emergency, transactions in ATMs are free of charge and commissions
When the preventive, social and compulsory isolation was established, Decree 297/2020 exempted ATM services from quarantine. As a result, through Communication “A” 6942 dated on March 20th, 2020, BCRA ordered banks and ATM managers to adopt all necessary measures to guarantee the sufficient provisionof funds in ATMs, with the BCRA committing to guarantee the cash availability.
On the other hand, through Communication “A” 6945 dated March 26th, 2020 (later expanded by Communication “A” 6957 dated April 6th, 2020), the BCRA prohibited charges or commissions for any banking operation (deposits, withdrawals, consultations, etc.) carried out at ATMs enabled and operated in the country, until March 30th,2020.
The restriction for collection of charges or commissions for ATMs operations is without limits of amount –except as expressly agreed for security reasons and/or resulting from operational restrictions of the equipment– or number of withdrawals, nor distinctions between clients and non-clients, regardless of the type of account in which the corresponding operation is performed.
Likewise, the BCRA ordered that financial entities should make available the means so that all individuals and legal entities are able to make withdrawals for an amount that is, at least, the sum of AR$15,000 –daily accumulated-, regardless of their status as clients (or not) of the financial entity that owns the device in which the operation is performed and the network that manages it.
We highlight that these provisions of the BCRA refer only to ATMs operated by financial entities, by which we understand that they do not include ATMs operated by non-bank entities.
CREDIT CARD OPERATIONS
New caps on interest rate, extension of terms and tourism purchases
In the context of the health crisis, the BCRA continued its policy of reducing the cap on the interest rate to finance balances of credit card statements (the so-called “revolving”). Thus, through Communication “A” 6948 dated March 28th, 2020, the BCRA established that as of April 1, 2020, the new cap forbank issuersis49%nominal annual. Later, through Communication “A” 6964 dated April 10th, 2020, the BCRA reduced the cap again, setting it at43%nominal annual for balances as of April 13th, 2020. It is worth mentioning that these caps only apply to the revolving interest rate, but not to other charges, fees or taxes that usually apply to these operations.
On the other hand, regarding the payment of bank credit card statements, it was provided (by Communication “A” 6948 mentioned above) that those that expired between April 1stand April 12th, 2020 could be canceled on day 13thof the same month, for the same amount and without any extra charge.
Likewise, through Communication “A” 6964, it was established that the unpaid balances due to maturities operated between April 13thand April 30th, 2020 must beautomatically refinancedfor at least one year, with a grace period of 3 months and in 9 equal and consecutive monthly installments, to accrueonly compensatory interest, without any extra charge. These refinanced balances may be prepaid, totally or partially, at any time and at no cost –except for the compensatory interest accrued until prepayment- when the client so requires.
Regarding offshore purchases with credit cards, it is worth noting that, by Communication “A” 6940 dated March 19th, 2020, the BCRA increased theminimum capitalrequirement for financial entities, by providing that the weighting factor for credit risk exposures for purchases made in installments with credit cards for air tickets and other tourist services rendered abroad should rise to 1250%.
It should also be noted that, by means of Communication “A” 6948 already mentioned, the BCRA ordered that financial entities should continue to deliver debit, credit and purchase cards by post, adopting the appropriate (health) security measures.
FOREIGN RESTRICTIONS FLEXIBILITY
Cash withdrawals, remittance deposits and remote operation
In order to facilitate assistance to Argentine citizens abroad, the BCRA softened some exchange restrictions.
In this sense, by means of Communication “A” 6948 dated March 28th, 2020, the BCRA expanded the limit from US$ 50 to US$ 200 for cash withdrawals from foreign ATMs in non-bordering countries.
Likewise, by the same communication, individuals were enabled to transfer foreign currency from local accounts to remittance accounts abroad (which could include, for example, PSPs virtual accounts abroad), for up to the equivalent amount of US$ 500 per calendar month. For this, the client must present an affidavit stating the purpose of assistance to an Argentine resident abroad due to the COVID-19 pandemic.
It is also worth mentioning that, through Communication “A” 6942 dated March 20th, 2020, the BCRA enabled financial and exchange entities to continue operating remotelyin theforeign exchange market among themselves and with their clients.
DIRECT DEBITS AND REVERSALS
Restrictions on collection of loans continue and means for reversals are expanded
Communication “A” 6948 of BCRA dated March 28th, 2020, provides for further details regarding limitations on the use of interbanking direct debit established by Communication “A” 6909 dated February 19th, 2020 (with the clarifications of the announcement made on February 20, 2020).
In the first place, the prohibition to use the interbanking direct debit in the collection of loans remains in force, but with the exception of debits ordered by second-degree commercial banks (that is, wholesale banks that only receive deposits from the financial sector or, in the case of public banks, from international credit organizations, large investors or web term deposits).
Secondly, it is established that financial institutions must enable their clients the possibility to send stop-debits, cancellations and reversals with respect to direct debits in their accounts, through electronic means of either mobile banking, telephone banking and Internet banking.
OPERATIONS WITH ECHEQs
Specific provisions
Due to the urgencies for liquidity faced by SMEs and to permit them withdrawing cash during the health emergency, the BCRA clarified through Communication “B” 86958 dated April 1st, 2020 that ECHEQs (checks generated by electronic means) are allowed to be issued in favor of the same issuer.
On the other hand, due to the problems caused by the suspension and sudden reopening of the checkclearingsystem (Communication “A” 6944 of March 24, 2020), as well as the impossibility in many cases of presenting or paying checks during the mandatory quarantine, the Executive Branch suspended until April 30th, 2020 the collection offines, as well as the disqualification and closure of bank accounts, due to the rejection of checks for lack of funds (Decree 312/2020, as per Communication “B” 87015 of the BCRA). BCRA, through Communication “A” 6950 dated April 1st, 2020, extended theperiod for the presentationof common checks and deferred payment checks by 30 days, as well as admitting a second presentation for checks rejected due to “lack of funds”, except in the case of ECHEQs for which the latter possibility does not apply.
PROVISIONS FOR PUBLIC ATTENTION
Remote operations and care of non-bank providers
From the beginning of the compulsory quarantine, through Communication “A” 6942 dated March 20, 2020 (as amended by Communication “A” 6944 of March 24, 2020), the BCRA established that all financial entities should remotely continue to provide the services that they usually furnish, including for the constitution of term deposits, granting of financing and services related to the payment system.
Likewise, after verifying the problems generated by the lack of public attention for the payment of different services, by means of Communication “A” 6958 dated April 6th, 2020, the BCRA ordered that non-banking issuers of credit or purchase cards, and the other non-banking credit providers registered with the BCRA, must enable their operating houses to serve the public attention from April 13th, 2020 until April 17th, 2020, through the electronic appointment system.
It is worth noting that, through Communication “B” 11980 dated March 27, 2020, the BCRA had already clarified that there were no limitations to the normal operation of extrabanking services at retail shops such as supermarkets, pharmacies, gas stations or other entities expressly excepted from the mandatory quarantine, so that these complementary activities to the banking system are enabled to continue operating.
REFLECTIONS ON FINTECH AND DIGITAL BANKING REGULATION
How can they help during the COVID-19 crisis?
On March 27, Abogados.com published an article written by our partners Daniel Levi and María Shakespear, titled How fintech and digital banking regulation can help in the Coronavirus crisis, in which they reflect on the benefits that fintech and digital banking instruments can generate to solve problems of the health crisis, as well as the important role that regulation policy plays so that these benefits produce the desired effects.
By clicking on this link you can access the full article in its English version.
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