Cash has long been king at Argentina’s bars and restaurants. Its reign may be ending.
As Bloomberg News reported Saturday (Aug. 10), card tipping had been rare in the South American nation, leading many patrons to carry big wads of cash.
Now, however, tipping is going digital amid a surge in FinTech activity, with Argentina now home to 312 such companies in 2023, up from 72 in 2017, the report said, citing data from the Inter-American Development Bank.
According to Bloomberg, Latin America eCommerce goliath MercadoLibre’s payments business Mercado Pago has come up with a new function in its app for tipping.
“The spread of digital payments and decline of cash use started to negatively impact the amount of tips waiters received,” Agustin Onagoity, senior director for Mercado Pago Argentina, said in a statement to Bloomberg. “Our users and gastronomy workers really demanded a tips solution.”
The report also quotes Pedro Filippini, a Buenos Aires barista who lets customers send tips to his Mercado Pago account, finding the tips there tend to be more generous than cash gratuities, as those can depend on the amount of paper money a customer has with them.
He added that he prefers digital payments but can still see the need for cash as people are struggling. Cell service costs have ballooned, leading to situations where it’s harder to access Mercado Pago.
This is happening at a time when — as noted here earlier this year — the rise of digital tipping is transforming how consumers show gratitude for service.
“This shift toward digital gratuity represents more than just convenience — it’s a reflection of broader societal changes, impacting both employee retention and transactional consumer experiences,” PYMNTS wrote.
In addition, that report said, the implementation of digital instant payouts for hospitality staff has been shown to improve morale and job satisfaction in the service industry, addressing longtime challenges in staff retention and leading to higher retention rates.
As Matt Tuchband, CEO of mobile tipping platform TipQwik, said in “Tap and Tip: Travel and Hospitality Embrace Digital and Instant Payments,” a joint PYMNTS Intelligence and Ingo Payments research study, the ability to tip via smartphone throughout a property can reduce turnover by making sure staff who normally do not get tips included on a bill, such as housekeeping and porters.
In addition, “It provides a simple option for guests to show their appreciation at any time without fumbling for cash,” Tuchband said.
