Five months of POS terminal freedom

The Brazilian POS terminal exclusivity ended in July. Today, we are five months in and it is interesting to see what has changed on the market.

These changes of course affect the big players on the Brazilian card processing market. More companies means increased competition and this puts pressures on the rates. Since the second trimester of the year Cielo has lowered the average rates on its cards from 1,24% to 1,21%.

Cielo isn't waiting for the competition to come and is partnering up with various banks and regional card companies. 

Partnerships

Banks:  Caixa Econômica Federal and banco Safra

Card processors: 

• Amex, third player on the Brazilian market with transactions worth R$ 25 bilhões
• Sorocred e Ticket, regional player from the São Paulo state
• Policard, regional player from the Minas Gerais state. They use WALK Platform, our solution for application development, to power part of  their POS terminal network.

These deals mainly involve shared transaction processing on terminals. Especially in the periferies of the big cities, working together with these regional players might be a good way to quickly get some new business.

The joint-venture that Cielo started with mobile provider Oi in September shows that there also are other opportunities on the horizon. Mobile payments will become a key growth industry in the years to come. Especially because of the large part of the Brazilian population that doesn't have bank accounts but do have cellphones. A partnership between a card processor and mobile carrier surely will give the banks a run for their money. 

A Portuguese article on the subject can be found here.

If you have got any other information on changes on the Brazilian payment market, please share them in the comments!

Comments

[Anabelet Ramirez]

Hi! I find the information you posted very interesting!! I thought that Cielo an Redecard were acquirers, but you mention they are processors. I guess I am not so clear on the players in the Brazilian market. Could you clarify, pls?

[Plano Bê]

Hi Anabelat!
Glad you like the article, always nice to get positive feedback.

Cielo and Redecard are card processors, they operate their own network of pos terminals. On the Brazilian market, everybody was basically creating their own network, on national as well as regional levels. By opening up the market and making every pos terminal available for other card brands, there is a possibility that in the coming months they will become card acquirers.

Hope this clarified things a bit.