According to the officials, the encapsulated product will be a closed payments component that costumers can personalise (choose whichever colours and typography) and plug into their app.
MODO’s application allows end users to centralise and view their account balances and debit or credit cards from different banks, in addition to making peer-to-peer (P2P) transfers using phone numbers without the need of a uniform bank key.
The product can be adapted and integrated into the mobile apps and wallets of any bank as the platform offers two types of service:
The product allows end users to make purchases in stores using physical and digital QR codes (in alliance with Prisma’s Payway and Fiserv’s Posnet).
Buy now, Pay Later in Argentina
While Buy Now, Pay Later (BNPL) represented 2.1% of global ecommerce in 2020 and is expected to grow to 4.2% by 2024, the numbers are much less representative in Latin America. According to BoaCompra’s Digital Renaissance in Latin America white paper, BNPL summed up only 1% of total ecommerce in the region in 2021 and should reach 3% by 2025. It is present in Latin America, but at a much smaller fraction than in other regions.
However, BNPL payment industry in Latin America has recorded strong growth, supported by increased ecommerce penetration along with impact of economic slowdown due to disruption caused by COVID-19 outbreak.
In Argentina, large banks such as
Banco Galicia are even getting in on the act. Therefore, allowing users to apply for a BNPL loan through MODO would be another way for banks to capitalise on the apps’ popularity. The app may also serve as a channel for banks to promote the use of the credit cards and other products.
Argentina’s fintech landscape
In 2021, Argentina experienced an exponential growth of the fintech industry, with approximately 302 fintechs now operating in the country. In fact, according to the Argentine Fintech Chamber (Cámara Argentina de Fintech), as of September 2021, fintech companies had received investments of USD 900 million during the first three quarters of 2021. Such investments came hand in hand with the emergence of Argentine fintech unicorns, along with the digitalisation accelerated by the COVID-19 pandemic.
In February 2022, the Central Bank regulated digital wallets. This regulation established certain obligations to be complied with by digital wallets, such as registration with the Central Bank, compliance with certain informative regimes, and implementation of certain fraud mitigation mechanisms. Thus, payment service providers that do not offer payment accounts but do provide a digital wallet service must now comply with the registration requirement, which until recently was only applicable to PSPOCPs, as well as other specific obligations.
