In the first issue of Progreso published in November 2014, we analysed Law 19.210 on electronic money and how it might help promote financial inclusion amongst the least well-off in society, who were not catered for by the traditional banks.

Two years later, the Uruguay executive branch is introducing amendments to that Law, to encourage a greater degree of traceability to transactions, bring more formalisation into the economy and introduce greater security for the population and commercial transactions. The most significant changes are:

E-money issuers (article 2)

The Law adds that financial intermediaries and institutions registered as issuers by the Uruguay Central Bank may issue electronic money.

Social benefits and compensation (articles 13 and 19)

Regarding the payment of remuneration to university professionals and self-employed workers in locations with less than 2,000 inhabitants, it postpones the deadline for incorporating online payment of salaries until there are touchpoints from which they can withdraw the money (automatic teller machines, financial correspondents or analogous).

It also states that social and other benefits may only be paid using e-money instruments that can guarantee the funds are not being used for other purposes. Moreover, the beneficiaries of food benefits are entitled to request issuance of up to one additional e-money instruments, in the name of their parents, children or partners.

Impossibility of embargo (article 21)

This article refers again to localities with less than 2,000 inhabitants, where the deadline for incorporation of e-money can be extended until there are touchpoints from which to withdraw the money in cash. Moreover, for domestic workers, this deadline can be extended until 31st December 2017.

Specifications of payment instruments (articles 24 and 25)

These articles add that institutions must provide e-money services to pay remuneration, fees, social benefits, etc, without discrimination or charge, for all those entitled to be paid food benefits certified by a judge that request payment by accreditation in an account of a financial intermediation institution or in e-money instruments.

E-money accounts must meet the minimum requirements of enabling domestic transfers to the same or other financial intermediary or e-money issuer, through diverse media, such as automatic consultation terminals, mobile devices or websites.

It declares that these requirements will come into force on 1st May 2017, empowering the Executive Branch of the government to extend this period by up to a maximum of 6 months.

It also establishes that the minimum conditions will be applicable to local e-money entities, and that the conditions on withdrawal of funds and the making of transfers referred to in article 25 will not be applied to food benefits.

Other regulated payments (articles 35, 36, 37, 39, 40, 41, 43 and 46)

All payments regulated under articles 35, 36, 37, 39, 40, 41, 43, after 1st July 2017, will be subject to restrictions on the use of cash. The law makes it mandatory to make certain kinds of transactions only by online transfer as e-money (rents, sub-rents and loans for the use of properties; divestments and other real-estate business; purchase of motorised vehicles; national taxes; etc)-.

Likewise, it amends the fines for failure to comply with the foregoing articles, setting a ceiling for these fines at:

1. 25% of the amount paid or received by means other than those permitted, or
2. 10,000 Indexed Units* (34,900 Uruguayan pesos approx.. equivalent to USD 1,200 approx.)

Equivalence of card and cash payment (article 64)

Finally, the Law determines that merchants and suppliers deciding to accept debit cards or e-money instruments may not charge a higher price than they would charge for a cash transaction, or place a minimum limit for acceptance of e-money payments.