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What Fintech have been doing in terms of financial inclusion

Traditional banking and technology based financial companies commonly referred to as fintech maintain a war that seems to have no end.

The camera that groups these companies, where Mercado Pago stands out, came out to respond with harsh criticism from the banks, who have been insisting for some time now for regulatory asymmetries, both from the Central Bank and the AFIP, which his judgment inclines the court in favor of fintech.

Fintech highlight what they have been doing in terms of financial inclusion and, in a challenging tone, they mark their achievements with the hashtag #NoLoHizoUnBanco.

In a statement, they point out that from the Argentine Chamber of Fintech they believe it is appropriate to reiterate, as they have been doing since our foundation in October 2017, that only through collaboration with the traditional financial system can they face the challenges of financial inclusion with the that the current Argentine reality challenges them.

Last week the criticisms of the banks were reflected in a report by FIEL, which states that the market should operate without regulatory or tax distortions that impose advantages or disadvantages artificially on one technology or another.

Discriminatory treatment for different niches or segments

FIEL’s work highlights alleged tax distortions, such as discriminatory treatment for different niches or segments. This would be the case, for example, of tax or regulatory advantages in favor of fintechs, in such a way as to encourage them to enter the informal customer segment or facilitate informal transactions in general. But inhibit the presence there of regulated financial entities. Thus reducing competition in both formal and informal segments.

The most common example cited by banks: an operation with a credit card applies tax withholdings (Gross Income, VAT if applicable, Profits), while an operation carried out by other means of payment is exempt from those withholdings made by account and order of the AFIP.

The fight has turned into a heavyweight fight. On the one hand, national and foreign banks that look increasingly distrustful of Mercado Libre and fintech in general.

In front, Mercado Libre, a company that today is worth more than 30,000 million dollars in the stock market, more than all the local banks together.

Also published on Medium.

Published inFintech
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