Argentina, the Country of Cash Only
In Argentina, 60% of traders consider cashing the most convenient means of payment. Beyond the constant growth of electronic forms of payment, various reasons support the preference for cash.
The tax pressure on electronic media is one of the causes of the preference for cash by merchants.
Despite the growth in the use of electronic means of payment, fueled by the pandemic, many Argentines want to see bills when paying or accepting money. In Argentina, a large part of transactions, particularly those in the informal economy, continue to be carried out in this way.
According to a survey of Oh Panel, a research company, 94% of small businesses require cash payments for their normal operation. The survey also reveals that a large portion of daily transactions in Argentina takes place with cash. Usually such purchases mainly occur in local shops (81%). Additionally, they occur payment for services (25%), the purchase of clothing (27%), or fuel loads (36%).
Argentines position themselves as the least optimistic regarding the contribution of cash to the development of the economy.
Banking is very low in Argentina
Luis Secco, an economist, stated that the use of cash would not disappear. Even though the use of digital means of payment increases.
Considering the high informality and the huge low-income population in Argentina, it is difficult for banknotes to disappear because banking is very low.
Secco mentioned that although technology and smartphones allowed a significant increase in the availability and use of electronic means of payment, cash is the exclusive means of payment. It cannot be ignored that, unfortunately, the size of the informal economy has been growing. This is mainly as a result of the quarantine.
All in all, there are challenges the country is facing. This is greatly due to the inability to access a good connection, cash is left as a means of payment. Also, older people don’t use electronic devices.
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