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Chile Country Report

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  • Published Date: June 2020

A comprehensive overview of the cards, payments and consumer banking market in Chile, with clearsighted commentary backed by relevant data.

With the number of POS terminals having more than doubled in the latter half of the decade just ended and four in ten card-present transactions now contactless, card spend is set to overtake cash at the point of sale. In almost every dimension change is well underway: the merchant acquiring market was opened to competition in 2017, while CuentaRUT has surpassed 60 per cent market share of debit cards in issue and significantly expanded banking reach. Even before the pandemic, e-commerce turnover had doubled between 2016 and 2019.

What you will learn from this Chile cards market report:

  • Why the Chilean POS is exceptional in the region.
  • How profitability differs for bank-issuers and retailer-issuers.
  • The innovations that have been transformative.
  • How acquiring has been reinvented.
  • What new regulations have meant for prepaid.

CHILE CARDS AND PAYMENTS REPORT | KEY FACTS

  • Sound economic policies, maintained consistently over nearly four decades, have positioned Chile as one of the most stable and prosperous nations in Latin America.
  • Electronic payments have been gaining ground over cash and cheque payments, rising to half of the value of consumer payments.
  • Regulatory changes introduced three years ago have been making the acquiring and open-loop prepaid card businesses more efficient, far-reaching and competitive.
  • Chile is one of the few Latin American markets where contactless payments are widespread.
  • E-commerce is growing rapidly in 2020 as consumers shift their shopping online in response to the pandemic lockdown.
  • CuentaRUT, BancoEstado's basic bank account, has dramatically increased financial inclusion and debit card ownership since its introduction in 2007.
  • Retailers have historically enjoyed a strong influence in the credit cards market. Several banks have acquired retailer card portfolios to grow their own cards business.
  • Until December 2017, Transbank, a processing company owned by major banks, was the sole payment cards acquirer in Chile.
  • Competitors to Transbank are emerging, with both domestic banks and international processors entering the market.

Chile Payments Research | Report Contents

Excerpts from the Chile card payments Country Report

Demographics and the economy
GDP growth slowed down to a 2.5% average between 2013 and 2018. The restrictions resulting from the Covid-19 emergency will also reduce growth in 2020, with a contraction of 4.5% expected.

Payments environment
Chile's retail banking and payment markets evolved positively between 2013 and 2019, reducing the unbanked population and increasing usage of electronic channels.

Cards market
There were 38.8 million bank-issued payment cards at the end of 2019: 17.17 million credit cards and 21.65 million debit cards. This means that there was an average of 2.53 payment cards per adult in Chile at the end of 2019.

Mobile payments
As of December 2019, BancoEstado holds a 62% debit cards market share of debit cards in issue, creating a strong opportunity for the development of P2P payments in Chile.

Profit pool
Net interest income is the main source of revenue and represents around 46% of total bank-issued credit cards revenue in Chile in 2019; VFR estimates that it will decrease to 43% in 2020.

The card networks
Credit cards are widely accepted in Chile, with Mastercard and Visa having the largest acceptance by number of merchants. Debit cards are widely accepted for POS and ATM transactions and are issued under the Mastercard, Maestro, Visa Electron, CuentaRUT and private label brands.

Key retail banks and issuers
Retail-banking competition is dominated by around half-a-dozen players who dominate the issuing space. To succeed in this market, international players need a focused strategy, either through a joint venture with a high-profile partner or through a large-scale acquisition.

Acquiring and processing
Under a new regime, issuers can negotiate MSCs with merchants, thus breaking the existing vertical integration between Transbank issuers. In the absence of this integration, the government partially created conditions to attract new competitors into this business.

Online acquiring
Between 2013 and 2019, B2C e-commerce sales in this market grew by about 2.8 times, reaching some $6.1 billion in 2019. This represents 9.1% of the estimated 2019 total payment cards purchase volume.

Regulatory and other cards market information
In March 2020, lawmakers in Chile decided that payment card liability should be transferred to issuers. Once new regulations come into force, EMV migration should accelerate.


Appendices: Chile Card Payments Data

Appendix I: Demographics and the economy

  • Demographic and economic indicators
  • Ownership of key consumer devices
  • Internet usage by population

Appendix II: Payments environment

  • Access points
  • Account penetration
  • Consumer payment trends
  • B2C e-commerce payment methods

Appendix III: Cards market

  • Total cards payment metrics
  • Contactless cards metrics
  • Credit card numbers
  • Total credit card data metrics
  • Credit cards profitability indicators
  • Debit cards numbers
  • Debit cards metrics
  • Prepaid/e-money cards metrics

Appendix IV: Mobile payments

  • Mobile proximity payment metrics
  • Mobile P2P payments

Appendix V: Profit pool

  • Profit pool

Appendix VI: The card networks

  • Networks' credit card market shares
  • Networks' credit card numbers
  • Networks' credit card billed volume
  • Networks' number of credit card transactions
  • Networks' average credit card transaction value
  • Credit card interchange fees by network
  • Networks' debit card market shares
  • Networks' debit card numbers
  • Networks' debit card billed volume
  • Networks' number of debit card transactions
  • Networks' average debit card transaction value
  • Debit card interchange fees by network (signature debit cards: exempt)
  • Debit card interchange fees by network (signature and PIN debit cards: regulated)

Appendix VII: Key retail banks and issuers

  • Key credit card issuers market shares by credit card numbers
  • Key issuers market shares in credit card outstandings
  • Key debit card issuers market shares by debit card numbers
  • Key private label card issuers market shares by credit card numbers

Appendix VIII: Acquiring and processing

  • Merchant acquirer credit card market share
  • Credit card merchant service charges
  • Merchant acquirer debit card market share
  • Debit card merchant service charges
  • Credit card issuer/issuing processor relationships
  • Credit card acquirer/acquiring processor relationships
  • Credit card issuing processor market shares by card numbers
  • Credit card acquiring processor market shares by the number of POS transactions

Appendix IX: Online acquiring

  • Online merchant acquirer market share

Chile Payments Trends | Entities Referenced

American Airlines
American Express
Apple Pay
Banco Consorcio
Banco de Chile
Banco de Crédito e Inversiones
Banco Falabella
Banco Itaú CorpBanca
Banco Ripley
Banco SudAmericano
BancoEstado
BankBoston
BBVA
BCI
CajaVecina
Car
Casa Ximena
Citi
Citibank
Cocha
Cofisa
Compraquí
Coopeuch
CorpBanca
CuentaRUT
Delta
Diners Club
Divesa
Enjoy
Evo Payments
Falabella
Hites
Iberia
Itaú
Krealo
La Polar
LATAM
Lider
Linio
Magna
Mastercard
Multicaja
Netflix
Nexus
PagoRUT
Presto
Redbanc
Redcompra
Ripley
Samsung Pay
Santander
Scotiabank
Security
Sodimac Homecenter
Spotify
SumUp
Tottus
Transbank
Tricard
Uber
Unicard
UnionPay
Viajes Falabella
Visa
Walmart
Webpay
WhatsApp

MORE LATIN AMERICA CARDS & PAYMENTS REPORTS

Verisk reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in Latin America. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with Latin American industry executives and experts.

See more Latin America Country Reports or explore the full range of payments research reports available for 72 markets.

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