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Argentine fintech groups welcomed the possibility for workers to be able for the first time to deposit their wages in virtual wallets. However, lawmakers removed that provision, a move widely seen as favoring the interests of traditional banks.
President Javier Meli’s party agreed to exclude the article during negotiations to gain wider support for the project, although opinion polls indicate that a majority of Argentines favor the freedom to choose where to deposit their salaries.
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Lack of trust in banks drives portfolio adoption
Argentine law today stipulates that workers’ wages must be deposited in… Traditional bank accounts. Despite this law, he rose Adoption of digital wallets in Argentina significantly in recent decades.
This growth partly reflects limited access to banking services. A 2022 central bank survey showed that only 47% of Argentines had a bank account, mainly due to a deep distrust of traditional systems.
She pointed Decades of financial instabilityincluding the 2001 Corralito deposit freeze, persistent inflation and repeated restrictions on access to funds, undermined public confidence in banks and accelerated the shift toward cash and cash savings.
She replied Digital wallets managed by fintech companieswhich is operated by non-bank payment service providers, expands access to financial services throughout Argentina.
Platforms such as Mercado Pago, Modo, Yoala and Limon are now among the most used. Many users who do not have traditional bank accounts rely on these apps as their first entry point into the formal digital financial system.
For this reason, the leaders of the fintech sector welcomed the provision that would have allowed Argentines to deposit their salaries directly in virtual wallets. However, this provision was removed from the draft labor reform bill before it was even discussed in Congress.
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Maxi Miliano Raimondi, CFO of Limon, told beINCrypto that the exclusion of article 35 from the labor reform eliminated the possibility of Argentines freely choosing where they receive their salary. In practice, the obligation to channel salaries through traditional banks has been maintained, due to strong pressure from this sector.
Raimondi added that citizens have already shown their preference: about 75% of transfers in Argentina are carried out through CVUs used by digital wallets. Millions of people receive their salaries in banks only because regulations require them, and then move their money to fintech companies in search of better products, lower costs and higher returns.
Political negotiation is in the interest of the banks
The banking associations renewed their lobbying campaigns this week. She sent letters to senior senators explaining her objections to allowing salaries to be deposited in digital wallets.
They argued that digital wallets lack adequate regulation, pose potential systemic risks, and may deepen financial exclusion.
Banco Provincia, a leading Argentine bank, noted in a statement that digital wallets do not have a regulatory, prudential or supervisory framework equivalent to that of banks, and that their approval will generate legal, financial, patrimonial and systemic risks that directly affect employees and the operation of the financial system.
Fintech organizations have rejected the allegations, stating that these claims are not true.
Maximiliano Raimondi, CFO of Lemon, said in a statement that all payment service providers (PSPs) are regulated and supervised by the Central Bank of Argentina (BCRA). He stressed that digital wallets were the gateway to financial services for millions of people who were able to open a virtual account easily and for free, and access better financial solutions.
A recent study by the consulting company Isonomia showed that 9 out of 10 Argentines want the option to choose where to deposit their salaries. She said this trend was stronger among freelancers and those working in the informal sector. The report also revealed that 75% of Argentines use digital wallets every day.
Ultimately, the banking sector prevailed before the bill reached a Senate vote. According to reports, the government removed the provision to avoid straining relations with banks and to improve the chances that the law will finally be passed.
