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Puerto Rico Country Report

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  • Published Date: August 2020

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

In February 2020, the island finalised the restructuring of 24 percent of its total debt, a boon for a long-hampered economy. Card payments value is estimated to reach 22 percent of consumer spending in 2021, while debit cards in issue grew by a third between 2014 and the end of the decade. P2P service ATH Móvil reached the one-million user mark in 2019, equivalent to 17 percent of total payment cards in issue.

This is what you will learn from this Puerto Rico cards market report:

  • How the island's constitutional status affects cards and payments
  • Where cash fits in the payments mix
  • What growth rates have been seen in mobile payments
  • Why there is scope for more debit cards
  • How cards have fared in the ongoing recession

Puerto Rico Cards and Payments Market | Key Facts

  • Puerto Rico's economic growth followed a similar pattern as the American economy until 2009, but lower investment, natural disasters and government debt have mired the island in a recession that has now lasted 13 years and counting.
  • The US Federal Reserve regulates the financial market and sets interest rates; the currency in circulation is the US dollar.
  • The banking system has experienced a drastic consolidation, going from ten retail banks in 2007 to four in 2019.
  • Between 2013 and 2019, the proportion of adults with a formal bank account grew from 70 to 73 percent.
  • Over the same period, the value of consumer electronic payments has continued to gain ground over cash and cheque payments, rising from a 35 percent market share to 43 percent in 2019. Cash remains the most popular consumer payment instrument.
  • Net interest income from credit cards reached 47 percent of total card revenue in 2019. Verisk Financial Research (VFR) estimates that profit per card will decrease in 2020 due to the COVID epidemic.
  • Visa dominates the credit cards network market in terms of cards in issue and billed volume.
  • Banco Popular is the top-ranked credit card and debit card issuer in Puerto Rico, with 68 and 79 percent market shares respectively as of December 2019.
  • Banks in this market engage directly in merchant acquiring, with Banco Popular dominating.

Puerto Rico Payments Research | Report Contents

Key Topics
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Card Market 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 cards metrics
Credit cards profitability indicators
Debit cards numbers
Debit cards metrics

Appendix IV: Mobile payments

Mobile proximity payment metrics

Appendix V: Profit pool

Profit pool

Appendix VI: The 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

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

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 number of POS transactions

Appendix IX: Online acquiring

Online merchant acquirer market share

Puerto Rico Country Report | Selected Extracts

Demographics and Economy:
The island-based Commonwealth of Puerto Rico is an unincorporated territory of the United States with 3.19 million residents as of the end of 2019, a decrease of 11% since six years before.

Payments Environment:
Puerto Rico's financial system is stable and operates within an interconnected payment framework that includes the Fedwire, CHIPS and ACH funds transfer systems.

Cards market:
The card and payments infrastructure in Puerto Rico is advanced by Latin American standards. Point-of-sale networks began in the 1980s and there are currently 1.27 POS terminals per 100 adults, which compares favourably to other countries such as Colombia (1.31) and Mexico (1.15).

Mobile Payments:
In 2014, Evertec launched a low-value P2P payment service called ATH Movil, available to financial institutions' customers in Puerto Rico, including Banco Popular, FirstBank and several credit unions.

Profit Pool:
With profit per card at $71 at the end of 2019, this market performs above the regional average. Profitability has rebounded strongly due to higher billed volume and higher MSCs along with lower operating cost to revenue.

Card Networks:
At the end of December 2019, Visa and Mastercard had a combined market share of 87% of credit cards in issue and of billed volume. Despite the presence of Visa Debit and Maestro debit cards, the national ATH debit card scheme has a strong presence in terms of both cards numbers and total billed volume.

Key Retail Banks and Issuers:
The cards market is highly competitive due to the lack of cross-border barriers with the United States allowing penetration of the market by registered foreign card issuers.

Acquiring and Processing:
Banks in Puerto Rico engage directly in merchant acquiring and have built up coverage to embrace over 23,000 affiliated merchants. Banco Popular dominates the market, followed by FirstBank.

Online Acquiring:
Puerto Rico's B2C market approximately doubled in billed volume between 2016 and 2019. According to the island's Sales & Marketing Executives Association, over one million individuals made online purchases during 2019.

Regulatory and Markets Information:
The Dodd-Frank Wall Street Reform and Consumer Protection Act that came into effect near the beginning of the last decade brought the most significant changes to financial regulation in
the United States, and with it Puerto Rico, since the 1930s.

Payments Report | Entities Referenced

A Toda Hora
ACH
American Airlines
Apollo Global Management
ATH
ATH Móvil
Automated Clearing House
Banco BBVA Puerto Rico
Banco Popular
Banco Santander Puerto Rico
CHIPS
Claro
Clearing House Interbank Payment System
Diners Club
Discover Financial Services
Doral Bank
Eurobank
Evertec
FDIC
Fed
Federal Deposit Insurance Corporation
Fedwire
FirstBank
Google Pay
JetBlue
Mastercard
OCIF
Oriental Bank
R-G Premier
Sales & Marketing Executives Association
Samsung Pay
Santander
Scotiabank
US Federal Reserve
Visa
Westernbank

MORE NORTH AMERICA CARDS & PAYMENTS RESEARCH

Available for 72 markets, Verisk Financial Research Country Reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit. A dedicated team of analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and experts.

See more North America Country Reports or explore the full range of financial research reports for 72 cards and payments markets worldwide.

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