Fintech threatens the card business: how does the US banks alert impact on Argentina?

A Bain & Company report warns that US traditional banks face strong pressure for the progress of virtual wallets and digital payments. What lessons can Argentina take out?

The Fintech advance puts banks in check: alert in the US that also resonates in Argentina

The latest report by the Bain & Company consultant presented a trend that increasingly worries the banks of the United States: the disruption of the business of credit and debit cards, one of its main sources of income, due to the progress of virtual wallets and other digital solutions driven by Fintech. Although the study focuses on the North American market, its conclusions open key questions for the Argentine financial system, where plastics still dominate, but are no longer alone.

According to Bain, US banks project that annual credit card revenues could reach au $ 400,000 million in 2028, 10% more than in 2023. However, to achieve that goal they must adapt to an ongoing transformation: consumers, especially the youngest, are increasing Later “(BNPL), which allows us to pay in installments without the need for a card.

“From Argentina we must learn from the new trends of consumers and act accordingly to maintain the right direction of the business,” said Gustavo Fusoni, a bain & Company partner in the country. Your statement summarizes the tone of the report: what happens in the United States can anticipate what is coming in other geographies.

What is at stake?

Historically, the cards were a centerpiece in the banking business. Not only for the income they generate in commissions and interests, but also for associated loyalty programs: flight miles, discounts on shops, exclusive tickets for shows, fees without interest, and traveler assistance services, among others. That combo seduced millions of users in both the US and in Argentina.

But the model begins to show fatigue signs. Digital wallets offer more agile solutions and adapted to current needs: ease of use, integration with social networks and e-commerce, and personalized financing options without going through a card. In Argentina, this change is already palpated: according to BCRA data, the use of wallets grew exponentially in recent years, driven by the massification of the QR and the possibility of sending money with a click.

Defense strategies

To not be left behind, the Bain report suggests four priority lines for banks:

• Improve customer experience: Customize benefits according to the user’s profile. While some prefer cashback, others value miles or fees without interest. The key is to meet the client and adjust the proposal.

• Adopt generative artificial intelligence: AI tools can improve from the creation of accounts to expense recommendations, through personalized alerts or purchase suggestions.

• Reorganize the commercial approach: Instead of dividing equipment by product (cards, accounts, etc.), focusing on the needs of users and offering integrated solutions.

• Modernize technological infrastructure: Adopt flexible platforms that allow combining products (for example, a current account with a credit card) and add new services agilely.

And in Argentina?

The Argentine financial system crosses a similar transformation, although with nuances. While the cards remain a central instrument, especially in the middle class banking segment, digital wallets gain ground and are already replacing cash and, in some cases, plastics.

The difference is that, in Argentina, the Fintech grew in the heat of the lack of bank credit and the need for alternative means of payment in a context of high inflation and exchange restrictions. Many wallets even offer the possibility of investing the balance automatically, something that the cards do not allow.

For local banks, the challenge is double: they must modernize their technological offer, but also compete with non -banking players who have another business logic, greater regulatory flexibility and a more direct connection with digital users.

Conclusion