Mercado Pago Revamps Digital Transactions in Response to Regulatory Changes from Argentine Central Bank

Mercado Pago Revamps Digital Transactions in Response to Regulatory Changes from Argentine Central Bank

Changes in the Financial Landscape

The Argentine digital payment platform, Mercado Pago, has announced a significant change to its system of depositing money into the application’s digital accounts. In response to new regulations established by the Central Bank of Argentina (BCRA), Mercado Pago will revamp its deposit methodology starting December 1, a change that is anticipated to pose “difficulties” for its customers.

Preventing Fraud and Enhancing Security

The BCRA has mandated changes in the payment and transfer system with the objective to “prevent cases of fraud that affect users.” This new set of rules, which will be applicable to financial entities and virtual wallets like Mercado Pago, is aimed at enhancing the user experience, providing better security standards, and optimizing operations. The changes will come into effect from December 1.

A New System for Payments and Transfers

The key change introduced by BCRA is to “organize the system between payments and transfers to prevent confusion among users”. Instant debits for users will now be limited to payment operations, while transfers between accounts will be handled through the “Immediate Pull Transfer system”. This system involves requests or orders for funds that allow the immediate credit of funds in the account of the requesting customer after receiving authorization or consent from the customer receiving the request.

Impact on Mercado Pago

In light of these changes, Mercado Pago will be forced to change the way money is deposited into its application’s digital accounts. The company has admitted that the new methodology will bring “difficulties” for customers. From December 1, there will be no immediate debit, a system that was implemented almost three years ago. The Immediate Debit (DEBIN), which will now be replaced by the Pull system, is claimed to be the safest transfer method with the lowest fraud index on record in the country (0.02% of total transactions).

Agreement with the Entire System

The BCRA assured that “these modifications do not alter in any point the ability of users to manage their funds among the different providers of financial products”. The monetary authority also emphasized that the modifications were agreed upon with the entire system in the payment instruments to avoid fraud. The measures were published earlier this year in the CIMPRA Bulletins, which constitute agreements reached based on consensus in the Interbank Commission of Payment Methods of Argentina.

Conclusion

The impending changes to the payment and transfer system in Argentina pose several challenges for digital payment platforms like Mercado Pago. However, these changes are designed to enhance security and reduce fraud, ultimately benefiting the users. As the new system is put into effect, it will be crucial for companies and customers alike to adapt to the changes and navigate the new financial landscape.