Visa and MasterCard account for 69% of the 2.9 billion payment cards issued in the nine countries in the Americas, and this share continues to increase.
RBR’s study reveals that although Visa is the largest card scheme in the Americas, MasterCard gained ground in 2014 with an increase of 1.3 percentage points, compared to Visa’s 0.3 percentage point rise. Private label cards still account for a significant share of cards in the region as a whole, but this is declining.
Visa’s strong position in the USA gives it a considerable lead in the region
Visa is the largest card scheme in the Americas with 43% of cards in circulation, compared to 27% for MasterCard. These shares are up from 42% and 25% respectively in 2013, while those pertaining to all other schemes remained stable or fell during 2014. The number of MasterCard cards rose more quickly than their Visa counterparts in all the countries surveyed in the region except for Canada and Colombia.
Visa’s high regional share is largely a result of its strong position in the USA (where over half of the region’s cards are issued) and here it accounts for 48% of the card base versus MasterCard’s 24%. According to the RBR study, Visa is also the largest scheme in Argentina, Chile, Mexico and Peru, while MasterCard leads in Brazil, Canada, Colombia and Venezuela.
Share of Cards by Scheme in the Americas, 2014
Source: Global Payment Cards Data and Forecasts to 2020 (RBR)
A number of major deals will shape the competitive landscape over the next few years
In Argentina, MasterCard’s gain in share was largely thanks to increased debit card issuance by large Maestro issuer Banco de la Nación Argentina, and in Chile it was because of the addition of the MasterCard logo to several retailers’ private label cards. In Brazil, the second largest cards market in the region, major bank Itaú Unibanco signed a 20-year agreement with MasterCard in March 2015 to issue predominantly MasterCard cards. This may help MasterCard to maintain its momentum in the country, where it currently enjoys a slender lead over Visa.
In the USA, Discover-branded Walmart and Sam’s Club co-branded cards were converted to MasterCard in 2014, and Citigroup decided to issue mainly MasterCard consumer cards from 2015, a deal which also affects subsidiary Banamex’s portfolio in Mexico. However, Costco and USAA this year announced moves to Visa from Amex and MasterCard respectively. RBR notes that it is therefore difficult to predict which scheme will fare best in the US market in the coming years.
A sizeable private label sector remains
Private label cards hold a significant share of the regional market with 23% of all cards compared to just 7% at a global level. Brazil, Chile and the USA have particularly important private label sectors. According to RBR, many Latin American markets have large retailer-owned banks which issue their own cards, and these remain popular with customers who may not meet the income requirements for a bank pay-later card.
Domestic scheme cards are present in three major markets
RBR’s research shows that domestic schemes make up just 3% of cards in the region, however they are important in Canada and Brazil, and to a lesser extent in Mexico. Most debit cards in Canada are domestic-only Interac cards. Meanwhile in Brazil there are a significant number of domestic Elo prepaid, debit and credit cards as well as a small number of cards linked to other domestic card schemes. Elo entered the market in 2011 and has seen impressive growth since then, with more than 50 million cards in circulation at the end of 2014 and 85 million by December 2015. Elo is the result of a joint venture between Banco do Brasil, Bradesco and Caixa Econômica Federal (CAIXA) and is aimed at low-income customers and those claiming benefits.
Carnet, Mexico’s domestic scheme, is operated by one of the country’s main processing centres Prosa, and is issued by smaller banks across Mexico. Like Brazil’s Elo, these cards are offered to lower-income customers, and those in receipt of state benefits and social payments. Domestic schemes’ shares are continuing to rise in Brazil and Mexico.
Visa and MasterCard are gaining share at the expense of private label cards
RBR’s study shows that Visa and MasterCard account for a growing proportion of cards in the Americas, mainly at the expense of private label cards, which are being rebranded in several countries. While Elo and, to a lesser extent, Carnet are increasing their presence in Brazil and Mexico respectively, the vast majority of payment cards issued in the Americas will continue to carry a Visa or MasterCard brand. The various deals that have taken place over the last two years demonstrate the intensity of the competition between these schemes.