Buy-now-pay-later schemes help people get around soaring inflation, but they're now being banned for foreign travel as the country enters negotiations to pay off some of its debt. It's not good news for travel agencies, or pent-up travelers.
Argentina’s new measures designed to limit inflation will hit locals’ travel plans, denting business for outbound travel agents and tour operators by prohibiting use of credit cards to book travel outside the country.
The country’s central bank wants to curb access to hard currency, ahead of negotiations with the International Monetary Fund over $40 billion in payments owed, according to reports. By preserving its currency, it can help defend the value of the peso. The country is battling inflation of around 50 percent.
The move comes as authorities are expected to step up negotiations with the International Monetary Fund over above $40 billion in payments owed.
One of those measures affects consumers, because credit card operators will be banned from financing payments through installment plans if intended for tourism abroad, including hotels, air tickets, and car rentals.
Buy-now-pay-later schemes are growing in popularity around the world, particularly as a means to incentivise people to start traveling again. In Argentina, setting prices allows them to lock in prices before inflation pushes them higher.
With the peso, the local currency, so devalued, individuals and companies have turned for paying for other goods and services in installments. The clampdown began on Thursday, one day before the Black Friday sales began.
The Argentine Federation of Travel and Tourism Business Associations is considering taking legal action against the government, according to reports. It said prohibiting the sale of trips abroad in installments is “discrimination” and has a “full impact on the sector, especially hitting the smaller agencies.”
— Paula Krizanovic contributed to this report.
Photo credit: Buenos Aires, Argentina. Nestor Barbitta / Unsplash