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The Argentine Central Bank established, through Communication "A" 6859, that Payment Service Providers (PSP) must hold the funds credited by their clients in their payment virtual accounts, immediately available at the client's request.

PSPs are those legal entities that, without being financial entities, participate in the retail payment scheme, within the overall framework of the payment system, by offering payment accounts. Payment accounts are virtual accounts offered by a PSP to its clients to order and/or receive payments.

Based on the new requirement, the PSPs shall deposit the funds credited by their clients - at all times - in bank accounts denominated in Argentine pesos opened in a local financial entity. The only exception to this legal principle is when, upon the express request of the client, the funds credited in payment accounts may be transferred to “investment funds” (fondos comunes de inversión) in Argentina.

In addition, to make payments in their own behalf (e.g., payment of suppliers, payment of salaries, etc.), the PSPs must have a bank account different to the one used to credit clients' funds also opened in a local financial entity. In other words, the PSPs must segregate their own funds from the funds of the clients.

The PSPs and their directors and supervisory authority (órgano de fiscalización) will be liable under the sanctions set forth in Sections 41 and 42 of the Law on Financial Entities and concordant provisions, for breaches to the obligations imposed by Communication "A" 6859.

The PSPs have until January 31, 2020 to adequate to the mentioned regulation.

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