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.
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.
Chile's retail banking and payment markets evolved positively between 2013 and 2019, reducing the unbanked population and increasing usage of electronic channels.
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.
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.
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.
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
Appendix II: Payments environment
Appendix III: Cards market
Appendix IV: Mobile payments
Appendix V: Profit pool
Appendix VI: The card networks
Appendix VII: Key retail banks and issuers
Appendix VIII: Acquiring and processing
Appendix IX: Online acquiring
Banco de Chile
Banco de Crédito e Inversiones
Banco Itaú CorpBanca
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.
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