The challenge of digital payments during the pandemic

It was only in August that purchases with credit and debit cards in Argentina fell in real terms by 10% compared to the previous year. In this scenario, they shared an analysis of the economic situation in this country and the impact on small businesses from the Fintech BKR with Cointelegraph en Español.

“”The coronavirus pandemic hit the Argentine economy hard. In this context, the alternative of delivery, takeaway, WhatsApp organized sales or the ability to sell without the customer accessing the interior of the premises required companies to accelerate the integration of digital payment methods and all that. A resource that avoids the exchange of physical money, that requires face-to-face contact and is a means of transmitting the virus, ”they explained.

“However, The use of credit and debit card payments has declined rather than increased. The cost of commissions can become prohibitive for companies with lower sales and traditionally lower profit margins. It wasn’t until August, when the quarantine was gradually eased, that purchases with credit and debit cards fell by 10% year-on-yearl ”they added

The challenge of digital payments during the pandemic
The challenge of digital payments during the pandemic

The Central Bank of the Argentine Republic set a timetable for reducing card fees in 2017 so that they decrease year on year. In 2020, companies will pay up to 0.9% plus VAT for each direct debit transaction. And they can pay up to 9% for credit transactions, depending on the term for which they want to receive the money. The fee cut clearly failed to take into account the emergence of a global pandemic like the coronavirus and its devastating impact on the economy.

The possibility of accessing processes with digital wallets is more closely related than ever to the possibility that the retailer has no costs to use them and offer them to consumers. One solution to these traits is that proposed by BKR, the Argentine fintech specializing in financial inclusion, which saw the number of companies in their wallets increase by 18% amid a pandemic.

“”The zero cost ability for participating businesses and end users of the application is based on no credit. It only works with a balance, an amount that can come from a transfer or digitally from another wallet or from deposits made through Rapipago, ”they explained.

On the other hand, it should be taken into account that 50% of the shops linked to BKR belong to the catering trade, while 20% clothing and the remaining 30% are distributed among supermarkets, kiosks and beauty and personal care products.

Francisco Chaves, Institutional Relations Manager at BKR said:

“We were particularly close to the billing companies suffering from the Covid-19 crisis. We put together parts for social networks and supported them with best practices to reinvent or remove delivery.”

Additionally, they said the average food service ticket is $ 350, which shows how the wallet is mainly used for individual payment at general lunch. In beauty, the average ticket costs $ 400, and in kiosks, it costs $ 250.

The fact that the BKR network does not charge a commission on the transactions made by QR has had a significant impact on entrepreneurs operating with even lower profit margins amid the coronavirus crisis.

Francisco Chaves stated:

“Let’s take into account that there are companies and / or entrepreneurs who have to sell volume and whose products are low in margins and the transaction fees and product delivery affect their profitability.”

In addition, he emphasized that all operations with the BKR network have a “zero” commission for the trade and for the customer. “This means that both the customer and the business do not pay any commission when one person sends money to another person or when it is paid for in a business,” they told BKR.

“Trading saves the cost of payment commission and financial costs due to the availability of funds. If you sell 1000 pesos, you will get 1000 pesos, “they added.

With the wallet you can pay by simply scanning the QR code without manipulating cash and most importantly regarding the recording: “no bank transfer is required”.

Those who have this application can receive money or transfer money to the place they want at the time and place they choose. They assured from BKR that this happens without paying commission or maintenance costs.

On the other hand, this mode enables access to a control panel for companies. It allows to register the information about collections, management, sale of the day, accumulated sale, balance and transfers. It is free to trade and becomes an act of technology transfer in itself to a sector that does not have easy access to these solutions to manage its trade.

“Until recently, all of these operations were only possible with the purchase of administration and sales software, which also incur maintenance costs. The development of virtual wallets enables companies today to operate directly with no loss of profitability, ”they concluded.

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