(Food-Beverage-News.Com, May 03, 2018 ) Efforts by CBB for discouraging the use of checks Numerous efforts have been taken by the CBB for the encouragement of consumers for switching to card payments. It is actively discouraging the use of checks and is promoting card products in the rural and interior regions of the country by building partnerships with the domestic development bank BNDES. Social benefits and pensions are now distributed through prepaid checks now, in place of the conventional check used previously.
The use of checks has declined exponentially in the last decade as a consequence of the substitution by electronic payment options, majorly cards. The share of check payments in the overall cards and payments industry has declined by more than 10 percent since the introduction of cards. The levy of stringent controls on checking accounts and tough punitive actions against the issuers of bad checks have also played a significant role in the reduction in demand for checks as a payment option.
E-commerce expansion
The market growth in e-commerce is an important factor leading the expansion of the payment card market in Brazil. E-commerce is benefiting from the expanding middle class population in the country. Online sales are recording double digit growth numbers due to the increasing digitalized populace of the country, which is fluent with the usage of the internet. Debit and credit cards are dominating the online shopping segment through the provision of lucrative promotional offers such as discounts, coupons, and free shipping. The benefits of high convenience and low costs brought about by online retail are projected to bring in more customers and are also expected to increase the demand for cards.
Growth of private-label cards
There are positive growth aspects for private-label cards, specifically in the access gained to unbanked and under banked customers as a consequence of their proximity to customers and penetrating marketing strategies applied by card issuers. There cards are projected to experience a positive growth as they are liable to any annual fees and also have very low risk levels. Their subjection to fraud is also limited by their low reloadable limits. Carrefour, Pernambucanas, Casa Bahia, and Ponto Frio, are some of the examples of private label cards
Rise in the sales value of retail
The expansion in retail sales is also expected to exponentially boost the growth of the card payments channel. This is primarily due to the increasing adoption of cards to pay for fuel, food, shoes, apparel, provisions, automobiles, and furniture. These sectors have either expanded or have displayed steady growth. Retail sales are expected to grow at a robust CAGR of 10 percent during the forecast period. The valuation is further expected to increase, with the rising per capita incomes of the country. Further, there is a huge potential and space for the expansion of the card-based payments in hypermarkets and supermarkets, particularly in the apparel and fabrics department. This is majorly owing to the large volume of sales in these segments. Retailers have started to accept both debit and credit cards at POS terminals and are also expected to promote card use in these markets.
