Shorter Periods for Paying Credit Card Merchants

The BCRA ordered that the period for micro-, small- and medium-sized enterprises (MSMEs) to get paid under the Law on Credit Cards be shortened. This measure will come into effect on July 1, bringing benefit to 1.5 million MSMEs.

Under Communication A7305, MSMEs—as defined by the Secretariat of Small and Medium-Sized Enterprises and Entrepreneurs—will get paid 8 business days after a credit card transaction is made, instead of the current 10 business days period.

The 10-business-day period remains unchanged for medium-sized businesses, while large companies will get paid within 18 business days, the average time between the date of the transaction on a credit card and the statement due date.

Card payment terminal providers may charge fees to MSMEs for their sales: up to 1.8% on credit cards, and up to 0.8% on debit cards —in accordance with the law.

The former BCRA’s administration acknowledged “payment aggregators”, a kind of player that was not included in the law. They serve as intermediaries between merchants and issuers of credit and debit cards. Payment aggregators charge fees on merchants that triple those established by law, while card issuers and acquirers just receive 1.8% for connecting merchants and processing payments.

Based on comparative charts, the main payment aggregator charged a 3.39% fee on merchants, rather than 1.8% as established by law. Now, it has decided to raise it on the grounds that BCRA regulations allow it to do so.

The 1.8% fee is distributed as follows: 1.3% to card issuers, and 0.5% to acquirers. This means that while acquirers receive 0.5%, payment aggregators charge over 1.5% for the same processing.

Communication A7305 to account for their rise in A7305 to account for their rise in fees. Even though they may allege an increase in financial costs, they actually have tools to absorb them instead of passing them onto merchants.

The measure also establishes that health companies, restaurants, and hotels will get paid within 8 business days, if they are micro or small businesses. The others will get paid after 10 business days.

This scheme, which streamlines the payment system, is supplemented by the cap on interest rates that banks may charge users for financing their credit card purchases.

Examples for micro and small businesses:

Credit Card Fee Law on Credit Cards Aggregator 1 Aggregator 2 Aggregator 3 Aggregator 4
8 business days 1,8% 2,99% 2,95% 3,39% 4,29%

June 29, 2021.

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