Argentina Congress Removes Workers’ Option To Deposit Salaries In Wallets

TLDR

• Argentine law now requires salaries to be deposited in traditional bank accounts.
• Banks lobbied heavily to block the digital wallet salary option.
• 75% of Argentines already use digital wallets daily for payments.
• Study shows 9 out of 10 workers wanted the option for wallet deposits.

Argentina’s Congress has removed the option for workers to receive their salaries through digital wallets. This change comes as part of labor reform legislation promoted by President Javier Milei’s party. The decision maintains the requirement to deposit wages into traditional bank accounts.

Digital wallets have grown in popularity in Argentina, driven by limited access to banks and public distrust of the financial system. Despite this, lawmakers excluded the provision allowing wallet deposits after pressure from banking groups.

Banks’ Influence on the Labor Reform Bill

Banking associations played a key role in removing the digital wallet salary option. Banks argued that allowing wallet deposits could create legal and financial risks.

Banco Provincia, a leading Argentine bank, stated, “Digital wallets do not have a regulatory, prudential or supervisory framework equivalent to banks.” Lawmakers cited these concerns when negotiating the bill.

Fintech companies disagreed with the banks’ claims. Lemon, a digital wallet provider, said, “All Payment Service Providers are regulated and supervised by the Central Bank of Argentina… digital wallets were the gateway to financial services for millions of people.

Public Preference for Wallet Deposits

Despite the law change, surveys show strong public support for digital wallet salary deposits. A study by Isonomía found that 9 out of 10 Argentines wanted the choice to deposit salaries in wallets.

Digital wallets such as Mercado Pago, Modo, Ualá, and Lemon are widely used, particularly among independent workers and those in the informal sector. The study also showed that 75% of Argentines already use these apps daily.

Historical Context and Wallet Growth

The popularity of digital wallets in Argentina stems from decades of financial instability. Past events, like the 2001 deposit freeze known as the “corralito,” and repeated banking restrictions, have reduced trust in traditional banks.

With limited access to banking, many Argentines turned to digital wallets for financial services. Non-bank providers now serve millions of users, often acting as their first point of entry into the formal digital financial system.

Political Negotiations Behind the Decision

The provision allowing wallet salary deposits was cut from the labor reform during negotiations to secure broader support. President Milei’s party reportedly removed it to maintain good relations with banks.

Maximiliano Raimondi, CFO of Lemon, said, “The exclusion of Article 35 from the labor reform eliminated the possibility for Argentinians to freely choose where to receive their salary.” The move leaves traditional banks as the primary channel for wage deposits.

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