Chile’s Cards and Payments Industry

Monday 27 January 2014, Amsterdam

The issuance of CuentaRut, by BancoEstado, is a scheme that provides bank accounts to all Chileans and has resulted in positive growth for the debit card category in particular.

Chile’s card and payment industry is expected to grow at a CAGR of 7.16% over the forecast period (2013–2017). The prepaid card category, which is expected to occupy 33.2% of the overall card payments channel by 2017 in terms of volume of cards, is expected to have the highest growth potential with a CAGR of 10.83%. The debit card category is also expected to grow positively at a forecast-period CAGR of 5.67%.

The growth of closed-loop prepaid cards is expected to be a major driver of growth in the prepaid card  category. Closed-loop prepaid cards include gift cards and prepaid store cards issued by retail outlets. Closed-loop prepaid store cards are used by customers to make regular retail purchases, and are therefore expected to contribute to the growth of the transaction value of the overall prepaid category.

Branchless banking is expected to increase the volume of payment cards over the forecast period. For instance, BancoEstado offers its services through Caja Vecinas banking terminals, allowing it to serve the Chilean population over extended hours, including Saturday and Sunday. This channel differentiates the bank from others that normally operate five hours per day, five days a week. Caja Vecinas offers all normal banking products, and enables people living in remote areas to conduct transactions through POS terminals installed in retail stores. Caja Venicas is expected to play a major role in taking card-based payments to the country’s rural population.  

By the end of December 2012, mobile penetration in Chile reached 150%, of which web-enabled smartphones accounted for 25%. Mobile penetration growth provides significant potential for contactless mobile payments.

The scope of near field communication (NFC) payments is also expected to increase in Chile, due to a rise in smartphone penetration. According to Chilean telecommunications company Entel, the sale of smartphones is expected to increase from 353 million units in 2011 to 606 million by 2015.
    
By the end of December 2012, mobile penetration in Chile reached 150%, of which web-enabled smartphones accounted for 25%. Mobile penetration growth provides significant potential for contactless mobile payments.

The scope of near field communication (NFC) payments is also expected to increase in Chile, due to a rise in smartphone penetration. According to Chilean telecommunications company Entel, the sale of smartphones is  expected to increase from 353 million units in 2011 to 606 million by 2015.