Latin America Prepaid Card Market Recent Registered CAGR Topped 30%, Reports BRICdata28 Jun 2012 • by Natalie Aster
The Latin American (Brazil, Mexico, Chile and Peru) prepaid card industry, including both open and closed-loop prepaid cards, registered strong growth during the review period, posting a combined CAGR of 30.04%. It is estimated that 75 million of the Brazilian population are unbanked, or do not have access to banking services. Prepaid cards provide an alternative payment platform to unbanked consumers and help increase levels of financial inclusion. The Mexican prepaid cards market has slowly gained in popularity as organized retailers and vendors began to accept prepaid cards without charging a processing fee. Furthermore, vehicle rental vendors are also using prepaid cards for their service transactions. During the review period, 47% of Chilean retailers enrolled in a gift card program, making the country the second-largest Latin American market after Mexico for prepaid cards. Chilean gift card brands include Falabella, Easy and Paris. More than 50% of the Peruvian population is still unbanked. In order to provide wider levels of financial inclusion, banks in Peru are expected to issue prepaid or debit cards rather than credit cards. The ease of obtaining prepaid cards will drive the market over the forecast period.
According to the report “Market Opportunities and Emerging Trends in the Prepaid Card Market in Latin America” by BRICdata, the use of cards as a payment system is popular in Brazil. According to Associacao Brasileira das Empresas de Cartoes de Credito e Servicos (ABECS), the total number of credit cards in Brazil increased by 13% to reach 173.3 million in 2011, while the number of debit cards increased by 7% to reach 266.3 million in 2011. Additionally 247.4 million private-label cards are in circulation. As Brazilian consumers are already familiar with the concept of payment cards, it is easier for companies to promote prepaid cards.
Market Opportunities and Emerging Trends in the Prepaid Card Market in Latin America
Published: June, 2012
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Retailers and supermarkets have launched their own prepaid cards in partnership with commercial banks or prepaid card solution companies. Mexican retailers offering gift cards include iTunes, Cinemex, Mixup, Gandhi, Lo Mejor de Mexico, Smartbox, Starbucks, California Pizza Kitchen, Chili’s, Experimenta, Bueno, todito Card, Saludo, Hablando Derecho,10 en Tareas and Xbox Live.
There are opportunities in the Chilean prepaid card market to introduce open-loop cards which have distinctive benefits for both retailers and customers alike. The open loop cards expands the usability of the card and do not restricts the user to shop from the limited retailers.
The online retailing market in Peru is projected to record a CAGR of 13.48% over the forecast period. While debit and credit cards can be used for online purchases, prepaid cards are expected to be used for online retail purchases due to the security options they provide.
More information can be found in the report “Market Opportunities and Emerging Trends in the Prepaid Card Market in Latin America” by BRICdata.
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