An expert overview of the cards, payments and consumer banking market in Brazil, with in-depth commentary backed by substantial key market data.
Electronic payments, after a false start in the form of mobile money, have come a long way with total value on course to match that of cash in 2021. The key factor is smartphone penetration, with three-quarters of e-commerce transactions now carried out on the devices.
On the cards front, debit-based purchases will exceed 45 percent of total card purchases in 2021, with contactless gaining ground after an initial period of low take-up. Domestic scheme Elo is now the largest debit card network.
The authorities have been very active – breaking down the acquiring duopoly over the course of a decade and mandating Open Banking processes – while the new instant payments platform, Pix, has caught the popular imagination.
How the pandemic affected the payments environment.
The role played by the boleto in Brazil.
Why correspondents remain vital.
Which drivers matter in the Brazilian cards market.
How acquiring stands after market reforms.
TABLE OF CONTENTS
Demographics and the economy
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Brazil Card Payments Data
Appendix I: Demographics and the economy
Appendix II: Payments environment
Appendix III: Brazil Cards market
Appendix IV: Profit pool
Appendix V: The card networks
Appendix VI: Key retail banks and issuers
Appendix VII: Acquiring and processing
Appendix VIII: Online acquiring
Demographics and Economy
According to official statistics, the percentage of the Brazilian population living in urban areas went from 81% in 2000 to 86% in 2020, creating a substantial housing demand.
Technology has transformed the Brazilian market, especially in the retail payments environment. For example, VFR estimates that electronic payments value will match cash transactions value in 2021.
According to the central bank, there are almost 584 million payment cards in issue at the end of 2020, of which 218 million are credit cards and 366 million debit cards.
Mobile banking is increasingly becoming a key channel for contracting financial products and making transactions, with a sharp growth in accounts and insurance products.
Despite high interest rates that discourage borrowing via card, Brazil remains a very profitable market with room for further development. Profit before tax was estimated to be around $6.6 billion for 2020.
As domestic scheme Elo gains momentum, issuing new cards and migrating a portion of the sizeable private-label store cards market, the Brazilian credit cards landscape is likely to continue changing ... As of 2020, Elo was the largest debit card network in terms of cards in issue and the second-largest in billed volume.
Key Retail Banks and Issuers
Over the past five years, digital bank Nubank's sustained growth has changed the credit card market landscape by becoming the third-largest issuer ... other digital banks in the market are: Banco Pan, C6 Bank, Banco Inter, Agibank, Next and Banco Original.
Acquiring and Processing
The combined market share held by Cielo and Rede has decreased by a significant margin over the last decade; however, the pair continue to lead this merchant-acquiring market with a combined 60% market share of total acquired billed volume.
Total card not present (CNP) billed volume in 2020 reached an estimated $87.39 billion, with credit card billed volume accounting for 88% of the total ... The adoption rate of information technology by Brazilian consumers has been a key driver for this extraordinary growth.
Regulatory and Markets Information
Banks operating in Brazil belong to an industry group, the Federacao Brasileira de Bancos (Febraban). Uniting public, privately owned and foreign-owned financial institutions, Febraban lobbies the government, works with regulators on current issues, sets industry standards and provides sectoral information.
Banco Central do Brasil
Banco del Buen Ayre
Banco do Brasil
Banco do Nordeste do Brasil
Banco Nacional de Desenvolvimento Econômico e Social
Banco Nossa Caixa
Banpará e Banco Fibra
Boa Vista Serviços
Caixa Econômica Federal
Carrefour Soluções Financeiras
Check Forte Processamento de Dados
Comiss£o de Valores Mobiliários
Companhia Brasileira de Soluções e Serviços
Confederaçao Nacional de Dirigentes Lojistas
Conselho Monetário Nacional
Discover Financial Services
Federaçao Brasileira de Bancos
Fidelity National Information Services
Fidelity National Systems
Fidelity Processadora e Servicios
Gestora de Inteligência de Créditos
Japan Post Bank
LATAM Airlines Brasil
Mercantil do Brasil
Minha Casa Minha Vida
Pao de Açúcar
Programa de Alimentaçao do Trabalhador
Sistema de Pagamentos Brasileiro
Sumitomo Mitsui Banking Corporation
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