Fintech from MercadoLibre sees the Argentine central bank’s measure as an “attack”

A technical measure announced by the Argentine central bank on Monday prompted a rare public rebuke from the fintech arm of MercadoLibre Inc.in another sign of the Government’s deteriorated relations with private companies.

MercadoPago, the payments platform and electronic wallet managed by the Latin American e-commerce giant, warned that the central bank’s decision to separate platforms between debit payments and transfers means that “More than 4 million people will have difficulties depositing money into their Mercado Pago digital account”.

“This measure is a new attack on financial inclusion“, he pointed MercadoPago in a post on the social media platform xformerly known as Twitter, adding that traditional banks pressured the monetary authority to impose the new system. “It will negatively affect the experience of millions of people”.

This marks another episode in the Peronist government’s series of anti-business measures since it took power in 2019, including a web of currency controls and even a failed attempt to nationalize a soybean company.

Looking ahead to the presidential elections on October 22, the Government faces difficulties in staying in power after finishing third in the August primary elections.

More than eight million users invest in mutual funds in Argentina through the Mercado Pago electronic wallet application—almost 20% of the entire population—and, at the beginning of July, it had more than 367 billion pesos (US$ 1,400 million at that time), according to the executive director of MercadoLibre, Marcos Galperinwho republished the information on platform X. This is a significant increase compared to the three million accounts in June 2021.

Since three years ago, MercadoPago uses the systemimmediate debit”, or DEBIN, for users to send money to their accounts. Now the central bank — which said it aims to avoid cases of fraud — wants the DEBIN system to be for payments and for transfers to be made through another channel called “Pull Transfers.”

MercadoPago says that tests of the Pull Transfers system have failed in nine out of ten users, causing some users to even have to go to an ATM to confirm their identity.