Cards have been massively boosted by the CuentaRut scheme in Chile, providing bank accounts to all citizens. Open an account and getting a card is set to become even easier as the country moves towards branch banking. CI reports
In terms of the number of cards in circulation, Chile’s card payments channel grew at a compound annual growth rate (CAGR) of 15.80% during the review period (2008-2012). The channel 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%.
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Growth of closed-loop cards to positively influence the prepaid card category
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. The value of closed-loop cards grew from CLP1.1 Tn (US$2.1 Bn) in 2008 to CLP3.0 Tn in 2012, at a review-period CAGR of 26.99%. The value of closed-loop cards is expected to grow from CLP3.5 Tn in 2013 to CLP5.7 Tn in 2017, at a forecast-period CAGR of 12.85%.
Social commerce used as a platform for selling and marketing payment cards
Large-scale retail outlets and department stores are using social commerce platforms to expand their cards businesses. Outlets such as Jumbo Cencosud issue gift cards that can be used for online purchases through Facebook accounts. Issuers also use blogs and social network platforms to market their store cards. As of December 2012, there were more than 8 M Facebook users in Chile, and social networking sites are gaining popularity as the number of internet users in the country increases.
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By GlobalDataHigh mobile penetration to offer huge potential for NFC technology
NFC technology has the potential to increase the scope of payment cards in Chile. According to South Korean electronics manufacturer LG, NFC has significant potential in the healthcare, financial services and remittance sectors. In 2012, LG introduced the Optimus 4X HD smartphone, which is enabled with NFC technology, and the company expects Chile’s leading telecom operators, Entel, Claro and Movistar, to offer NFC technology in the near future. Mobile penetration in Chile is 150%, one in four mobile phone users in the country have a smartphone, and nearly half of all mobile subscribers are expected to switch to a smartphone over the forecast period. This will help to boost the popularity of NFC as a means of payment.
New business operators to increase the scope of mobile payments in the country
The high smartphone penetration in Chile has increased the scope of card-based payments through mobiles. In 2013, Chilean telecom operator Movistar introduced Pago Movil, an m-payment service that enables customers to pay bills through mobile phones. Similarly, in 2012, mobile service provider Ionix introduced the Cuenta Móvil service in partnership with Banco de Chile and Entel PCS, extending mobile wallet services to Banco de Chile customers. Another mobile wallet service in Chile is Kuapay, which offers mobile wallet services in association with leading retailers in Chile.
Kuapay enables the Large-scale retail outlets and department stores are using social commerce platforms to expand their cards businesses. Outlets such as Jumbo Cencosud issue gift cards that can be used for online purchases through Facebook accounts. Issuers also use blogs and social network platforms to market their store cards. As of December 2012, there were more than 8 M Facebook users in Chile, and social networking sites are gaining popularity as the number of internet users in the country increases.
High mobile penetration to offer huge potential for NFC technology
NFC technology has the potential to increase the scope of payment cards in Chile. According to South Korean electronics manufacturer LG, NFC has significant potential in the healthcare, financial services and remittance sectors. In 2012, LG introduced the Optimus 4X HD smartphone, which is enabled with NFC technology, and the company expects Chile’s leading telecom operators, Entel, Claro and Movistar, to offer NFC technology in the near future. Mobile penetration in Chile is 150%, one in four mobile phone users in the country have a smartphone, and nearly half of all mobile subscribers are expected to switch to a smartphone over the forecast period. This will help to boost the popularity of NFC as a means of payment.
New business operators to increase the scope of mobile payments in the country
The high smartphone penetration in Chile has increased the scope of card-based payments through mobiles. In 2013, Chilean telecom operator Movistar introduced Pago Movil, an m-payment service that enables customers to pay bills through mobile phones. Similarly, in 2012, mobile service provider Ionix introduced the Cuenta Móvil service in partnership with Banco de Chile and Entel PCS, extending mobile wallet services to Banco de Chile customers. Another mobile wallet service in Chile is Kuapay, which offers mobile wallet services in association with leading retailers in Chile. Kuapay enables the virtualization of payment card details into mobile phones, and uses the stored details to pay bills in the same year.
