- The BRL 2 trillion amount does not consider the BRL 600.00 emergency funds paid monthly to 64 million Brazilians in 2020;
- Card transactions drew BRL 609.6 billion in the last quarter of 2020.
The volume of purchases paid with credit, debit and prepaid cards in Brazil ended 2020 at BRL 2 trillion, an 8.2% increase in comparison with 2019. Data is from the entity representing the sector, Abecs.
“The card industry showed a consistent recovery during the year, even disregarding emergency funds,” points out Pedro Coutinho, president at the association.
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The BRL 2 trillion amount does not consider the BRL 600.00 emergency funds paid monthly to 64 million Brazilians in 2020, informed Abecs. When considering the amount as part of the sector’s report, the growth recorded in 2020 is 11.1%, rather than 8.2%. According to Coutinho, emergency aids accounted for BRL 52.6 billion in the payment methods industry during 2020, and BRL 16.7 billion in the fourth quarter alone.
The 8.2% growth of the card industry, according to the association, surpassed the sector’s expectation, which, despite the economic impacts brought by the pandemic in Brazil, showed a strong recovery in the second half of the year. In January, Abecs had previously estimated growth around 8% for the card’s sector in 2020 and 14.8% increase, or revenues of BRL 607.3 billion, to 2020’s Q4 alone.
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As announced by the association on Tuesday, card transactions drew BRL 609.6 billion in the last quarter of 2020, up 15.3% compared to the same period of 2019. As a result, digital payments increased their share of consumption by Brazilian households to 46.4%, compared to 43% in 2019’s fourth quarter.
Coutinho says that one of the guidelines of the card sector is to reach 2022 with a share of about 60% in the payment methods industry. “We believe that this year the [card] industry will be able to reach 50% of transactions, which means half of households consumption transacting by cards.”
Abecs also reported that the card industry represented last year 30.9% of the country’s GDP. In 2019, this figure was 28%.
“We had an atypical year, like most segments, but we managed to end the period with more than 8% increase. Despite the challenges, the sector showed its capacity for innovation and inclusion, helping consumers and shop owners to make their transactions viable with the convenience and security of digital payments, via e-commerce, digital wallets, applications, contactless transactions, among others,” says Coutinho.
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For 2021, Abecs forecasts the volume of purchases paid with credit, debit and prepaid cards to reach growth between 18 and 20% over the last year.
Prepaid cards reach once again three-digit growth
Among payment methods, debit cards performed above the average in 2020, reaching BRL 762.4 billion, a 14.8% growth. Credit cards, on the other hand, hit BRL 1.18 trillion in transactions, up 2.6%. Prepaid cards saw the fastest growth rate, as they moved BRL 45.3 billion in the year, 107.4% more in the year-over-year comparison.
As for the number of transactions, 23.3 billion payments with cards were recorded over 2020, 3.6% more than in the previous year.
As travel was one of the sectors hardest hit by the pandemic and social isolation measures, spending by Brazilians abroad had a sharp reduction of 60%, recording the lowest result in 16 years: BRL 16.8 billion (US$ 3.46 billion). Purchases made by foreigners in Brazil fell 48.3%, accounting for BRL 10.6 billion (US$ 2.16 billion).
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E-commerce already represents almost 22% of all card payments
With more people at home and resorting to e-commerce during the pandemic, the use of cards on online transactions, via apps or other types of non-face-to-face purchases surged 32.2% in 2020, accounting for BRL 435.6 billion in spending. This number places card payments on online transactions with a 21.78% share of all payments carried out with cards in 2020.
In the last quarter of 2020, for every three credit card transactions in Brazil, one was a non-face-to-face purchase.
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Contactless payments: debit gains ground
The volume of purchases with contactless payments hit BRL 41 billion in 2020, an amount 469.6% higher than that recorded in 2019.
As Abecs reported, contactless transactions with debit cards represented a BRL 19.5 billion spending, followed by credit cards, with a BRL 18.8 billion purchases volume and the prepaid card, with BRL 2.7 billion.
The card industry recently increased the purchase limit for consumers with no pin required, which went from BRL 50 to BRL 100, in July, and from BRL 100 to BRL 200, in December.
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“The new value of BRL 200.00 will cover 80 to 90% of debit transactions,” points out Abec’s president. In addition to commerce in general, contactless payments have been implemented in other segments in the country, such as public transport and road tolls.
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With the new value of BRL 200, we will cover more than 80% of all transactions that will be carried out with cards in the coming months,” Coutinho points out. “This number will grow a lot. In general, card issuers have over 70% of their [customer] bases with an NFC-enabled card. In 2021, the number will have a much greater representation, perhaps 5x what we are seeing today.”