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News tagged as "payment instruments"
December 17, 2013

Tecnocom Report on Payment Trends, 2013

Tags: payment instruments, Latin America, Spain | by Afi, Analistas Financieros Internacionales

Tecnocom and Afi have presented their 2013 Tecnocom Report: Trends in Payment Instruments on 16 December. This is the third edition of a study that has become a benchmark for followers of payment developments in Spain and Latin America.

The presentation ceremony was presided by Ladislao Azcona, president of Tecnocom, and was attended by Javier Rey, managing director of banking and insurance at Tecnocom; Emilio Ontiveros, president of Afi; Álvaro Martín, director of international affairs at Afi; Miguel Angel Prieto, director of business development at Tecnocom; and Javier Martín, CEO of Tecnocom.

Executive summary

December 12, 2012


Tags: payment instruments, Latin America, Spain | by Álvaro Martín Enríquez
The TECNOCOM Report on Trends in Payment Instruments 2012 was presented yesterday. The Report was commissioned to Afi, Analistas Financieros Internacionales S.A., founding member of remEX.  

Let us start with a few “Highlights of the Tecnocom Report 2012” and an invitation to read the full document here.  



Over the past twelve months, some of the trends flagged in our first Tecnocom Report gained traction, while other new developments emerged. The intensity and scope of the changes being wrought by technological innovation, the effort being made by governments to foster the use of electronic payment instruments, the attempts by sector players to build a new mobile payments ecosystem and ongoing shifts in consumer preferences prompt the need to analyze where the industry is headed in Latin America and Spain. 

One of the issues most commented on by the executives working in the payment instruments industry across Latin America is regional financial development, often underpinned by significant support from the authorities. The launch of basic savings accounts and the switch from cash to electronic instruments for the settlement of government support (G2P) payments are two good examples of how the financial sector is reaching out to the masses. Retailers, meanwhile, have played a key role in extending the use of electronic payment instruments in several countries. At present we are witnessing migration away from private label cards to international payment gateways. 

Executives in the Spanish payments industry stress that despite the profound economic crisis engulfing the country, which is taking a toll on consumer spending and driving a reduction in the number of active cards, payments using electronic instruments continue to rise as the cash substitution phenomenon continues. This gradual shift is logical in a country that is highly banked and in which credit cards are more often seen as a payment instrument than as a financing tool. 

On both sides of the Atlantic, the executives interviewed believe that it will take several more years for NFC technology to take significant hold. However, many see contactless technology as a first step, and one that will be a reality in Spain in the near term and in Latin America in the medium run. Notably, even before NFC takes off, we are witnessing a race by all sorts of players (international payment brands, telecommunications operators, banks, Internet companies) to launch e-wallets. Against this backdrop, it is hardly surprising that the executives interviewed for this report highlighted the importance of newcomers to the market, which include recently-created brands such as China Union Pay, the Chinese market leader, which has also been flexing its muscles in broader Asia of late. 

One of the trends common to all the countries analyzed, particularly Spain and Portugal, is the significant decline in the use of checks, the most expensive non-cash instrument from a processing standpoint. The gradual decline of the check contrasts with the dynamic growth in credit transfers, which have achieved notable prominence. In fact, credit transfers accounted for 77.9% of total payment transactions by value (USD9.38 billion) in Latin America in 2011. This growth has been largely powered by the development of automated clearinghouses (ACH) that process the electronic fund transfer orders placed by the banks or their clients, natural and legal persons alike. Growth in direct debits, however, has lagged; this form of payment barely surpassed USD21 billion in 2011.




Analyzing these payment transaction figures by volume reveals that cards take precedence, being used in more than half of electronic transactions (specifically 59.2% for the six Latin American countries analyzed). This phenomenon is attributable to growth in card usage but also to an increase of cards in circulation, particularly in Brazil.

The most important factors contributing to this surge in Latin America include growth in employment and GDP per capita, a growing culture of finance among lower-income earners, driven by the efforts and campaigns conducted by governments, banks and retailers, and the progress made on financial inclusion. On the latter front, countries such as Brazil, Colombia and Mexico have championed noteworthy and large-scale initiatives to ensure that government transfers to households under various social welfare programs take the form of electronic payments.  

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Initiative financed by: Initiative financed by AECID
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