Latin America is a hotbed of payment fintechs with successful start-ups like Mercado Pago, PagSeguro, and Rappi offering free digital accounts, but credit card volume has lagged behind the rest of the world. What are the causes? The analysis presented in Mercator Advisory Group’s latest research report, Credit Cards in Latin America and the Caribbean: Financial Inclusion with Risk and Opportunity, recognizes opportunity but warns that infrastructure can be a limiting factor in this 20-country market.
Readers will understand the challenges that bank card issuers face and how card network revenue has lagged in the market. The report’s author explains how banks and vendors can navigate the changing market.
“Most adults in Latin America have a Mercado Pago or PagSeguro free digital account,” comments the author of the research report, Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group. “That does not mean everyone has a bank account, but new payment options make it easy to transact outside of the banking realm. Yet strong domestic and global credit card issuers operate in the market.” He continues: “There is plenty of room for growth, but risk management must contend with high default rates, unacceptable fraud levels, and a credit model that is not designed to let households comfortably revolve consumer credit card debt. Interest rates are sky high to offset operational and fraud risk.”
This research report contains 31 pages and 15 exhibits.
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