Lower-income, high inflation, and benchmarking rates on the rise. It is in this scenario that Abecs, an association that represents not only the card industry in Brazil but the electronic means of payment sector, projects a growth of 21% for 2022. A smaller increase than the 33.1% registered last year, when the industry reached BRL 2.6 trillion in transactions.
“Our perspective is to grow around 21% this year, to BRL 3.2 trillion. We are concluding a strategic planning, in partnership with a large consultancy, in which we estimate a robust annual two-digits growth for our industry until 2025,” said Pedro Coutinho, president of Abecs until March, when he will step down as CEO of Getnet and, consequently, the entity.
Also this year, the sector is likely to achieve one of its greatest goals: to account for 60% of Brazilian family spending (today, it represents 54%).
In general, growth was strongly driven by the credit modality – with an increasing share of remote and approximation transactions –although debit and prepaid transactions have also grown.
Credit cards accounted for BRL 1.6 trillion of the total amount transacted (an expressive growth of 36.6% over 2020), followed by debit cards, with BRL 916.3 billion (20.2%) and prepaid cards with BRL 117.1 billion (158.5%).
Also, according to Abecs’s data, more and more Brazilians are using cards for online and in-app purchases, in addition to other types of non-face-to-face purchases, moving BRL 569.7 billion in remote transactions in 2021, up 30.8% (read more about it here).
Cards become the third-largest individual credit portfolio in the country
Credit granted via card operations became Brazil’s third-largest consumer credit modality, behind only personal loans and real estate financing: BRL 391.8 billion were moved by the sector in 2021, more than twice as much as ten years ago. Last year, delinquency in the industry reached the lowest level of its historical series, which began in 2011: 4.3%. This is likely to change in 2022 due to the challenging economic scenario, but, according to Coutinho, default risks are not expected to return to the 8% level of ten years ago.
Interest-free installment transactions are the industry champion modality. It accounts for almost 90% of the volume transacted last year and, according to Coutinho, is not threatened by other payment methods, such as PIX (Brazil’s instant payment system), or new credit modalities, such as Buy Now Pay Later (BNPL), which arrived in the country recently with fintechs like the Colombian ADDI.
“The importance of interest-free installments payments is massive in Brazil. It is a sales weapon for retail and a purchase weapon for consumers. We have a champion product. About BNPL, well, every product is welcome in the industry. We are no longer in a world of this ‘OR’ that. We are in the world of ‘E.’ There is room for PIX, boleto (Brazil’s typical cash voucher), and credit cards. But, of course, all this has to be safe, and the consumer experience has to be spectacular,” said Coutinho.
He also stated that Abecs is working with its associates on a pilot project in the cities of Campinas and Brasília to “boost up” the digital installment plan in up to 36 months, a product that did not take off as the industry expected in the last couple of years but that it has a similar potential to installments through credit cards.