Em Conversa: Digital Wallets in Argentina With Kuady

As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em Conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.

In early September payments service processor Open Payment Technologies Ltd expanded its Manx digital wallet service provider, Kuady, into Argentina. To understand why Kuady chose to enter the Argentine market, and how its services will impact the sector, we spoke to Lorenzo Pellegrino, CEO at Kuady.

Open Payment Technologies Ltd is a company incorporated in the Isle of Man under company number 136352C with its registered office at Second Floor, The Old Court House, Athol Street, Douglas, Isle of Man, IM1 1LD. Open Payment Technologies Ltd is licensed and regulated by the Isle of Man Financial Services Authority to carry on Electronic Money Transmission Services. Day to day operations in the Isle of Man are headed up by its managing director Mario Ricciardi.

Can you tell me more about the company and your role within it?

Lorenzo Pellegrino, CEO at Kuady

As the CEO of Kuady, I’m leading our mission to expand our digital wallet, which is currently live in Peru, Chile, and Argentina, with exciting plans for further growth into Africa and Europe. My focus is on driving our mission to offer user-friendly and secure financial solutions tailored to the needs of underserved markets. At Kuady we aim to bridge gaps in financial access by providing simple, effective ways for consumers to manage their money, especially in areas where traditional banking infrastructure is limited.

At the same time, we are dedicated to helping merchants leverage our payment solutions to expand their businesses and enter new markets seamlessly. Our commitment is to revolutionise financial management for both merchants and users worldwide by simplifying the financial landscape and providing a platform that adapts to their evolving needs.

What are some digital wallet trends we’re seeing in Argentina?

The digital wallet landscape in Argentina is rapidly evolving, fueled by technological innovation, and economic necessity. Digital wallets are playing a pivotal role in enhancing financial inclusion, providing alternatives to traditional banking, and addressing the country’s unique economic challenges. Key trends shaping this evolution include cryptocurrency integration, the rise of super apps, and the widespread adoption of QR payments across the country.

The adoption of digital wallets has surged, largely due to economic instability, inflation, and strict currency controls, which have led people to seek more stable, alternatives ways to manage their finances. Platforms such as Mercado Pago, Ualá, and MODO have seen widespread take-up, with reports showing that over 50 per cent of Argentinians use digital wallets regularly for payments, investments, and money transfers.

Many digital wallet platforms are designed to serve the unbanked population, offering prepaid cards, personal loans, and saving features. These wallets are increasingly acting as a gateway to financial services for millions who lack access to traditional banking.

To attract and retain more users, digital wallets are enhancing their offering all the time with rewards, discounts, and cashback programs. These incentives encourage regular usage for everything from daily purchases to utility payments and transportation.

What is Kuady doing to improve the digital wallet sector in Argentina and LatAm?

Seamless, secure transactions are crucial for everyday life and our innovative platform is designed to be a one-stop solution for every financial need.

Kuady offers an advanced, user-friendly experience that ensures secure and efficient money management – giving global organisations access to the Argentinian and other LatAm markets with seamless cross-border transactions. It acts as a payment service processor for merchants and offers the e-wallet app for customers and provides robust chargeback protection and features to boost customer acquisition, retention, and activation.

The digital wallet provides merchants with instant payouts for their customers, a feature that provides a solution for individuals who struggle to access their funds, and offers its users deposit options such as cards, online bank transfers, and electronic money vouchers.

Kuady is intuitive, secure, and accessible to all, enabling us to promote financial inclusion and empower individuals and businesses.

How does the Argentinian digital wallet sector compare to that of the rest of the world?

The digital wallet sector in Argentina has distinct characteristics compared to other global markets, shaped by its unique economic challenges, regulatory environment, and societal needs. While Argentina shares some global trends, there are notable differences from more mature digital payment ecosystems in regions like North America, Europe, or parts of Asia.

In Argentina, the widespread adoption of digital wallets is largely driven by economic instability, including high inflation and currency devaluation. Many Argentinians use digital wallets to protect the value of their savings by converting their pesos into stablecoins or US dollars.

Digital wallets also provide essential financial services to those excluded from traditional banking. In the US or Europe, use of digital wallets is primarily driven by convenience and technological innovation, rather than economic necessity. In these more stable financial systems, digital wallets enhance existing infrastructure and offer added convenience rather than serving as an alternative financial solution.

A key factor in Argentina’s digital wallet growth is financial inclusion. Many platforms target the unbanked and underbanked populations, offering services like savings, payments, loans, and insurance to people who otherwise wouldn’t have access to formal financial institutions. For example, MODO integrates with a broader network of banks, expanding its reach and functionality.

While financial inclusion is also a focus in regions like Africa (e.g., M-Pesa in Kenya), Southeast Asia, and parts of Latin America, developed markets like Europe and North America emphasize convenience, streamlining payments, and offering rewards, rather than serving as the primary tool for financial inclusion.

What are some unique challenges associated with Argentina in the digital wallets space?

The digital wallet sector in Argentina faces several distinctive challenges, including severe economic volatility, fluctuating regulatory environments, infrastructure limitations, and a highly competitive, fragmented market. While these obstacles present difficulties, they also create opportunities for innovation, especially in areas like financial inclusion, cryptocurrency, and low-cost payment solutions.

Digital wallet providers in Argentina must navigate this complex landscape with flexibility and an understanding of the local economic, regulatory, and social context.

Plans for the future (roadmap and growth plan)

At Kuady, we are dedicated to fostering a sense of community that simplifies financial management, and we see Kuady as a beacon for business growth and longevity.

Seamless, secure transactions are crucial for everyday life and our innovative platform is designed to be a one-stop solution for every financial need. With Kuady, we can realise our vision of advancing financial inclusion and giving individuals and businesses the tools they need to thrive in a global economy. It really is the partner in your pocket for merchants and users alike.

Kuady is live in Argentina, Peru and Chile, and this is just the beginning of a long and exciting journey. We’re adding more LatAm countries monthly, and expansion into Africa and Europe will follow.

Additionally, we will soon introduce the option for users to apply for prepaid cards, available in both physical and virtual formats.

Final thoughts

At Kuady, community is everything to us. People are our priority – our merchants, our customers, and our talented team. And, as an Italian who shares his heritage with millions of Argentinians, I’m so proud that Kuady is live in Argentina. Kuady is more than a digital wallet – it enables online operators to offer their consumers and affiliates the ability to store funds in both US dollars and Argentine Pesos, with a real-time currency exchange feature.

We are dedicated to driving global financial inclusion and innovation. Our expansion into Argentina marks a significant milestone in our mission to provide secure and efficient digital payment solutions worldwide. By continuously enhancing and improving our digital wallet, we’re helping to empower individuals and businesses, facilitating growth and economic stability.

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