Table of Contents
OVERVIEW
Catalyst
Summary
EXECUTIVE SUMMARY
Sizing and forecasting the payment card market in Brazil
Competitor and product developments in Brazil
Brazilian credit card consumer segments
Online, contactless, prepaid, and mobile payments
SIZING AND FORECASTING THE PAYMENT CARD MARKET IN BRAZIL
Overview
Key macroeconomic and consumer data
Macroeconomic trends and performance
Demographic and consumer trends
Sizing the payment card market in Brazil
Size and performance of the payment card market
Number of payment card transactions
Value of payment card transactions
Trends in payment card use compared to other countries
Pay later card use
Credit card balances outstanding, revolve rates, and repayment behavior
ATM and POS terminal numbers
Forecasting the payment card market in Brazil
Forecasting the pay now card market
Forecasting the revolving credit card market
Forecasting the charge card market
COMPETITOR AND PRODUCT DEVELOPMENTS IN BRAZIL
Overview
The competitive landscape
Government-owned banks dominate the Brazilian market
International banks have targeted growth in Brazil
Brazil's government has looked to open up credit cards to a larger section of the population
Key competitors
Private sector domestic banks
Government-run banks
International banks
Card issuer market shares and performance
Credit card market shares
Balances outstanding by issuing brand
Credit card premium branding and usage
Credit card product features
Leading revolving credit products and price points
Leading loyalty programs
Consumer satisfaction by credit card issuing brand
Pay now card market shares
Charge and deferred debit card market shares
Card scheme market shares and developments
Major card scheme developments
Pay now card scheme shares
Revolving credit card scheme shares
Charge and deferred debit card scheme shares
REGULATORY AND ACQUIRING ENVIRONMENT
(Untitled section)
Brazil's strictly regulated banking sector weathered the worst of the financial crisis
The recent history of retail banking regulation in Brazil
The government's stance on consumer credit and competition issues
Industry regulators
Industry associations
Credit bureau
Acquiring and processing landscape
Consumer fears about fraud do not always match up to the threat in Brazil
BRAZILIAN CREDIT CARD CONSUMER SEGMENTS
Overview
Understanding consumer profiles provides opportunities for issuers to gain market share
Datamonitor has defined two Brazilian credit card profiles
Credit card holder demographics
Credit card holding by age: little variation between age groups
Credit card holding by income range: a higher income product
Revolver/transactor breakdown: Brazilian consumers avoid credit card debt
Financial product holding: credit cards are a popular financial product
Most consumers still only have one credit card
Credit card application methods
Pre-application research: Brazilians tend not to search the market
Credit card application methods: online growth
Card switching
Likelihood of switching cards: most credit card holders are unlikely to switch
Key factors in new card selection: low interest rates are highly sought after
Consumer attitudes to credit card product features
Reasons for existing card selection: existing credit card holders tend to look for the convenient choice
Features held compared to features wanted
ONLINE, CONTACTLESS, PREPAID, AND MOBILE PAYMENTS
Overview
Online payments were an estimated $17.4bn market in 2011
Brazil is the 12th largest market in terms of potential value worldwide, and is worth $17.4bn
Credit cards account for over half of online transactions in Brazil
Mobile: popular with consumers
Mobile looks set to become a major part of the payments industry
Consumers in Brazil are very interested in mobile payment systems
NFC opportunity: potentially a global driver
A range of mobile payment systems are being trialed in Brazil
Prepaid: there are a number of interesting niche markets
Potential for prepaid to reach the underbanked population
Consumers tend to use prepaid cards for specific purposes
There are a few major prepaid brands in Brazil
Brazilian consumers do not see the need for prepaid cards
Contactless payments represent a $163bn opportunity in Brazil
There is huge potential for contactless, but the technology is unlikely to go mainstream in the near future
Brazil represents the largest potential market opportunity for contactless payments in Latin and Central America
Brazilian consumers are generally positive about contactless cards
APPENDIX
Supplementary data
Definitions
(Untitled sub-section)
Methodology
Cards and payments database
Datamonitor's FSCI has been expanded, providing improved, new, and valuable insight
Forecasting methodology
Further reading
Ask the analyst
Disclaimer
List of Tables
Table: Brazil's macroeconomic indicators
Table: Brazil's demographic and consumer trends
Table: Datamonitor's forecast for the pay now card market, 2010–15f
Table: Datamonitor's forecast for the credit card market, 2010–15f
Table: Datamonitor's forecast for the charge card market, 2010–15f
Table: Fees and rewards applicable to revolving credit cards in Brazil
Table: Electrical goods top Brazil's online purchases
List of Figures
Figure: Brazil has the highest GDP in Latin America
Figure: The Brazilian economy returned to growth in 2010 after a contraction in 2009
Figure: POS transactions are increasing in line with household final consumption expenditure
Figure: Brazil has a relatively low unemployment rate for Latin America
Figure: Brazil has the highest card penetration rate of Latin America and the other BRIC nations
Figure: Brazil had the second highest penetration of pay now cards in 2010
Figure: Brazil had a high level of card penetration per person as of 2010, and the figure is still growing
Figure: Brazil has experienced rapid growth in payment cards since 2006
Figure: The number of transactions in Brazil has been growing rapidly since 2006
Figure: Brazilian cards are increasingly likely to be used for POS transactions
Figure: Pay now cards are more frequently used for food and drink purchases than pay later cards
Figure: Pay now cards have become the most frequently used in Brazil
Figure: Frequency of use for POS transactions is increasing
Figure: Pay now cards dominate the value of transactions in Brazil
Figure: Brazilian cards are increasingly likely to be used for POS transactions
Figure: 15.9% of pay now transaction value is accounted for by electrical goods
Figure: Charge cards have the highest average transaction value in Brazil
Figure: Average transaction values are much greater at ATM terminals than at the POS
Figure: Brazilian pay now cards are used regularly for low values
Figure: Brazilian consumers spend less on pay now cards than other Latin American nations
Figure: Brazilian pay later usage is similar to the average of the comparison countries
Figure: Brazil has relatively low turnover per card
Figure: In all nations compared pay later cards are often used to pay for flights and hotels
Figure: The majority of credit cards in Brazil are consumers' primary credit card
Figure: Only 21% of Brazilian credit cards are used rarely or are dormant
Figure: Brazil has the largest total balances outstanding at $72.4bn
Figure: The majority of Brazilian consumers pay their credit card bills off in full every month
Figure: Population per ATM terminal in Brazil has been increasing steadily
Figure: The growth of POS terminals in Brazil has slowed since 2009
Figure: Pay now card numbers are expected to record a CAGR of 2.6% over 2011e–15f
Figure: The number of credit cards in Brazil is expected to record a CAGR of 3.9% over 2011e–15f
Figure: Charge cards are the fastest growing category in Brazil, and are set to record a CAGR of 10.7% in terms of number of cards over 2011e–15f
Figure: Itaú Unibanco was the largest issuer of credit cards in Brazil as of 2010
Figure: Itaú Unibanco processes the highest number and value of credit card transactions
Figure: International banks have the highest balances outstanding
Figure: Banco do Brasil has the highest proportion of premium branded cards at 37%
Figure: Caixa Econômica Federal had a very low primacy level among its customers
Figure: Santander has the highest frequency of use of credit card issuers in Brazil
Figure: Reward/loyalty points are the most common product feature in Brazil
Figure: Banco Bradesco had the highest level of customer service satisfaction in Brazil in 2011
Figure: Banco Bradesco had the highest level of credit card product satisfaction in Brazil in 2011
Figure: Overall 56% of consumers would recommend their credit card to others
Figure: In 2010 the two largest banks accounted for more than 50% of the pay now market
Figure: In 2010 Banco do Brasil had the highest number of transactions but not the highest value of transactions
Figure: Banco Bradesco was the market leader in charge cards with a share of 22.7% in 2010
Figure: Banco Bradesco had the highest transaction value but not the highest transactions numbers
Figure: Visa had the greatest market share for pay now cards in issue throughout 2006–10
Figure: MasterCard experienced a CAGR of 28.3% between 2006 and 2010
Figure: Visa's share of the credit card market declined to 47% in 2010
Figure: Visa had the largest share of revolving credit transaction values
Figure: New scheme Elo has already secured a 2% share of the charge and deferred debit market
Figure: MasterCard has almost achieved the same transaction value share as Visa
Figure: 15% of consumers in Brazil have had their card details stolen in a shop or restaurant
Figure: 60.2% of consumers are concerned about their card details being stolen online
Figure: 69.7% of consumers feel that their banks are doing enough to protect them from fraud
Figure: The 35–44 year old age group have the highest credit card penetration rate
Figure: 27% of credit card holders earn more than BRL50,000 per annum
Figure: 73% of credit card holders pay off their balances in full
Figure: Credit cards are the second most popular financial consumer product in Brazil
Figure: Almost half of revolvers in Brazil possess more than one credit card
Figure: 59% of credit card holders in Brazil did no prior research into their product
Figure: In-branch credit card applications dropped from 63% in 2006 to 38% in 2011
Figure: 75% of credit card holders in the 65+ age group applied online
Figure: The 35–44 age group offers the greatest opportunity for new card issuance
Figure: 16% more revolvers are concerned about getting into debt than transactors
Figure: 80% of Brazil's consumers looking to switch cards are interested in low interest rates
Figure: 33% of revolvers chose the card that was easiest for them to obtain
Figure: Low interest rates on purchases are a highly sought after but rarely held feature in Brazil
Figure: 69% of transactors want their credit card to offer loyalty and other reward features
Figure: 34% of revolvers want a credit card with cashback features
Figure: Online payments were worth an estimated $17.4bn in Brazil in 2011
Figure: Online spending in Brazil is still a relatively undeveloped market
Figure: Credit cards are the most popular method of online payment in Brazil
Figure: Brazil has the third largest proportion of online spending through credit cards
Figure: 9.7% of online spending is made using a pay now card in Brazil
Figure: The fear of fraud is the biggest barrier to consumers making online payments
Figure: 57% of those who used credit cards for online purchases stated comfort as a key factor
Figure: 76.8% of consumers in Brazil are interested in mobile payments in shops
Figure: Brazilian consumers are the most likely to adopt NFC out of all countries worldwide
Figure: Almost a quarter of Brazilian consumers own a prepaid card
Figure: 36% of prepaid card holders use them to pay for transport
Figure: Visa Vale is the most popular prepaid brand in Brazil, occupying 60% of the market
Figure: 66% of consumers in Brazil feel that they have no need for a prepaid card
Figure: Contactless payments represent a $163.1bn opportunity in Brazil
Figure: Convenience stores offer the biggest opportunity for contactless payments in Brazil
Figure: 56% of card holders in Brazil either currently use or would like to use a contactless card
Figure: 55% of contactless users regularly use the method and find it helpful
Figure: 61% those who do not own a contactless card are concerned about security