Latin America Advisor

Financial Services Advisor

A Daily Publication of The Dialogue

Will Payment Card Transactions Keep Seeing Big Growth?

Payments using credit or debit cards in Brazil could grow as much as 20 percent this year, according to industry group Abecs. // File Photo: QuoteInspector.com.

Credit- and debit-card transactions in Brazil are expected to grow as much as 20 percent this year, according to industry group Abecs. Last year, card payments grew 8.2 percent, an increase largely driven by a government aid program to help low-income residents weather the economic effects of the pandemic. Will the trend of increasing payment card usage continue in Brazil, and will other Latin American countries see similar growth? Has the pandemic dealt a major blow to the use of cash in the region? After the pandemic ends, what factors will most influence the growth of payment card usage in the region?

Steven Sandretto, partner at Holland & Knight LLP: “While the spike in credit- and debit-card transactions in Brazil over the past year can largely be attributed to the pandemic, the underlying driving forces for card usage, such as growth in e-commerce and the fintech revolution, should continue long after the pandemic has ended. As e-commerce continues to grow in Brazil and throughout Latin America, card transactions should continue to rise. Notably, almost a third of the Brazilian population does not have a bank account, and access to credit is limited. The fintech revolution is changing this, and as more of the population has access to bank accounts and credit and debit cards, usage should continue to rise in the foreseeable future. For example, one driving force for debit-card payments in 2020 was the government aid program to assist low-income residents affected by the pandemic. In connection with this program, state-owned bank Caixa Econômica Federal created digital accounts linked to virtual debit…”

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About the Financial Services Advisor

Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.


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Erik Brand

Publisher
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E. ebrand@thedialogue.org

Gene Kuleta

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Anastasia Chacón González

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Diana Roy

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