Colombia’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

In 2013, Colombia surpassed Argentina to become the third-largest economy in Latin America, and was the fourth-highest recipient of foreign direct investment (FDI), with US$17.0 billion in the same year. Of the total population of 47.2 million, however, the unbanked population accounted for nearly 35% of the adult population in 2013, according to the Colombian Banking Association. The low banking penetration levels present banks and card issuers operating with growth potential. Banks have stepped in to take advantage of this large untapped market, having introduced a number of cards targeting the unbanked population. While leading card issuers pushed for growth by offering improved products, services and marketing campaigns, the government encouraged electronic payments through its financial inclusion plan. Consequently, Colombian payment cards registered healthy growth during the review period (2009–2013), and are anticipated to continue the same trend over the forecast period (2014–2018).

In terms of the number of cards in circulation, Colombian payment cards (including debit and credit cards) registered a positive growth during the review period, recording a compound annual growth rate (CAGR) of 8.05%, and increasing from 22.6 million in 2009 to 30.8 million in 2013. Growth in the industry is expected to be driven by growth in the retail sector, an increasing demand for debit and credit cards, a better regulatory framework, an increasing market for online and mobile commerce and a positive economic outlook.

In 2013, the average transaction value (ATV) in Colombia was US$121, which was the second-highest in the Latin-American region. Peru recorded the highest ATV with US$144.3, followed by Chile (US$82.4), Venezuela (US$71.4), Brazil (US$69.6) and Argentina (US$50).

Similarly, in terms of card penetration, Colombia recorded 0.7 cards per inhabitant in 2013, while Brazil, Argentina, Chile, Venezuela and Peru recorded 2.6, 1.4, 1.3, 1.1 and 0.6 respectively. In the same year, Colombia recorded 28.7 transactions per card in terms of the frequency of use, while Venezuela, Argentina, Chile, Peru and Brazil recorded respective numbers of 61.2, 42.3, 37.6, 30.2 and 23.7.

Colombian payment cards grew both in terms of transaction value and volume during the review period. In terms of transaction value, payment cards posted a CAGR of 10.10%, increasing from COP136.9 trillion (US$63.4 billion) in 2009 to COP201.1 trillion (US$105.9 billion) in 2013. It is anticipated that this value will increase at a CAGR of 3.91% over the forecast period, to reach COP246.3 trillion (US$137 billion) in 2018. In terms of transaction volume, payment cards increased from 636.2 million in 2009 to 885.2 million in 2013, at a review-period CAGR of 8.61%. This is expected to reach 1.1 billion transactions in 2018, growing at a CAGR of 4.10% over the forecast period.

Prepaid cards are gaining popularity among Colombian consumers. Banks offer a range of prepaid card variants, such as gift cards, transport cards, food cards, fuel cards and shopping cards, and do not insist on having an account with them to issue these cards. Likewise, the majority of Colombian companies offer prepaid cards to their employees as part of their salary packages, which are offered to meet food and fuel expenses. BBVA Colombia and Banco Davivienda offer Visa-branded prepaid cards called ‘Visa Vale’ to their employees. The growth of the prepaid card market has attracted new entrants. The US-based Latin American prepaid service provider NovoPayment launched its Colombian operations in 2009. The company offers three reloadable MasterCard-branded prepaid corporate cards: the Plata Combustible (money-fuel); the Plata Compras (money-purchases) cash management card; and the Plata Clásica payroll card for the unbanked population.

Scope

• This report provides a comprehensive analysis of Colombia's cards and payments industry.

• It provides current values for the industry for 2013, and forecast figures for 2018.

• It details the different economic, infrastructural and business drivers affecting the industry.

• It outlines the current regulatory framework in the industry.

• It details the marketing strategies used by various banks and other institutions.

• It profiles the major banks in the industry.

Key Highlights

• In terms of the number of cards in circulation, Colombian payment cards (including debit and credit cards) registered a positive growth during the review period, recording a compound annual growth rate (CAGR) of 8.05%, and increasing from 22.6 million in 2009 to 30.8 million in 2013. Growth in the industry is expected to be driven by growth in the retail sector, an increasing demand for debit and credit cards, a better regulatory framework, an increasing market for online and mobile commerce and a positive economic outlook.

• In 2013, the average transaction value (ATV) in Colombia was US$121, which was the second-highest in the Latin-American region. Peru recorded the highest ATV with US$144.3, followed by Chile (US$82.4), Venezuela (US$71.4), Brazil (US$69.6) and Argentina (US$50).

• Similarly, in terms of card penetration, Colombia recorded 0.7 cards per inhabitant in 2013, while Brazil, Argentina, Chile, Venezuela and Peru recorded 2.6, 1.4, 1.3, 1.1 and 0.6 respectively. In terms of the frequency of use, Colombia recorded 28.7 transactions per card in the same year, while Venezuela, Argentina, Chile, Peru and Brazil recorded respective numbers of 61.2, 42.3, 37.6, 30.2 and 23.7.

• Colombian payment cards grew during the review period, in terms of both transaction value and volume. In terms of transaction value, payment cards posted a CAGR of 10.10%, increasing from COP136.9 trillion (US$63.4 billion) in 2009 to COP201.1 trillion (US$105.9 billion) in 2013. It is anticipated that this value will increase at a CAGR of 3.91% over the forecast period, to reach COP246.3 trillion (US$137 billion) in 2018. In terms of transaction volume, payment cards increased from 636.2 million in 2009 to 885.2 million in 2013, at a review-period CAGR of 8.61%. It is expected to reach 1.1 billion transactions in 2018, growing at a CAGR of 4.10% over the forecast period.

Reasons to buy

• Make strategic business decisions using top-level historic and forecast market data related to Colombia's cards and payments industry and each market within it.

• Understand the key market trends and growth opportunities in the industry.

• Assess the competitive dynamics in the industry.

• Gain insights in to the marketing strategies used for selling various card types in Colombia.

• Gain insights into key regulations governing the industry.

Companies mentioned

Bancolombia

Banco Davivienda

BBVA Colombia

Banco de Bogotá

Banco Caja Social

Banco Colpatria

Citibank

MasterCard

Visa

Diners Club

American Express

Table of Contents

1 Key Facts and Top Events

2 Executive Summary

3 Payment Instruments

3.1 Current Payments Environment

3.2 Alternative Payment Instruments

3.2.1 Mobile payments

3.2.2 PayPal

3.2.3 Click2Pay

3.2.4 ClickandBuy

3.2.5 Ukash

3.2.6 Neteller

3.2.7 Skrill

4 Market Attractiveness and Future Prospects of Cards and Payments

5 Analysis of Cards and Payments Industry Drivers

5.1 Demographic Drivers

5.2 Economic Drivers

5.3 Infrastructure Drivers

5.4 Business Drivers

6 Emerging Consumer Attitudes and Trends

6.1 Market Segmentation and Targeting

6.1.1 Consumer cards

6.1.2 Corporate cards

6.2 New Product Launches

6.3 Travel Spending

6.3.1 Outbound trips volume and spending

6.3.2 Inbound trips volume and spending

7 Payment Cards

7.1 Payment Cards Instrument Analysis

7.1.1 Number of cards in circulation by card type

7.1.2 Transaction volume by card type

7.1.3 Transaction value by card type

7.1.4 Personal vs commercial cards

8 Debit Cards

8.1 Debit Cards Market Analysis

8.1.1 Number of debit cards in circulation

8.1.2 Debit cards transaction volume by channel

8.1.3 Debit cards transaction value by channel

8.1.4 Number of debit cards in circulation by scheme

8.1.5 Debit cards transaction value by scheme

8.1.6 Debit cards issuers market shares

8.1.7 Debit cards comparison

9 Credit Cards

9.1 Credit Cards Market Analysis

9.1.1 Number of credit cards in circulation

9.1.2 Credit cards transaction volume by channel

9.1.3 Credit cards transaction value by channel

9.1.4 Number of credit cards in circulation by scheme

9.1.5 Credit cards transaction value by scheme

9.1.6 Credit cards issuers market share

9.1.7 Credit cards comparison

10 Commercial Cards

10.1 Commercial Cards Market Analysis

10.1.1 Number of commercial cards in circulation

10.1.2 Commercial cards transaction value

10.1.3 Commercial cards comparison

11 Regulations in the Cards and Payments Industry

11.1 Regulatory Framework

11.2 Anti-Money Laundering (AML)

11.3 Foreign Direct Investment (FDI) Regulations

12 Card Fraud Statistics

12.1 Card Fraud Analysis

13 Card Issuers

13.1 Bancolombia

13.2 Banco Davivienda

13.3 BBVA Colombia

13.4 Banco de Bogotá

13.5 Banco Caja Social

14 Card Schemes

14.1 Visa

14.2 MasterCard

14.3 American Express

14.4 Diners Club

15 Prepaid Cards

15.1 Prepaid Cards Market Analysis

15.1.1 Number of prepaid cards in circulation

15.1.2 Prepaid cards transaction value

15.1.3 Open-loop prepaid cards

15.1.4 Closed-loop prepaid cards

15.1.5 Prepaid cards comparison

16 Appendix

16.1 Tables

16.2 Methodology

16.3 Contact GlobalData

16.4 About GlobalData

16.5 GlobalData’s Services

16.6 Definitions

16.7 Disclaimer

List of Tables

Table 1: Colombia – Key Facts, 2013

Table 2: Regional Benchmarking of Colombian Payment Cards Instrument, 2013

Table 3: Cards for High-Income Customers

Table 4: Cards for Students and Young Population, 2014

Table 5: Cards for Online Shoppers, 2014

Table 6: Cards for Frequent Travelers, 2014

Table 7: Cards for Female Population, 2014

Table 8: Co-branded Cards, 2014

Table 9: Colombia – Commercial Cards Comparison and Key Features, 2014

Table 10: Colombia – New Product Launches

Table 11: Regional Benchmarking of Colombian Debit Cards, 2013

Table 12: Colombia – Debit Cards Comparison and Key Features

Table 13: Regional Benchmarking of Colombian Credit Cards, 2013

Table 14: Colombia – Gold Credit Cards Comparison and Key Features

Table 15: Colombia – Premium Credit Cards Comparison and Key Features

Table 16: Colombia – Commercial Cards Comparison and Key Features

Table 17: Colombia – Market Entry Strategies of Foreign Banks

Table 18: Regional Benchmarking of Colombian Prepaid Cards, 2013

Table 19: Colombia – Prepaid Cards Comparison and Key Features

Table 20: Colombia – Payment Instruments Transaction Value (COP Trillion), 2009–2013

Table 21: Colombia – Payment Instruments Transaction Value (US$ Billion), 2009–2013

Table 22: Colombia – Payment Instruments Transaction Volume (Million), 2009–2013

Table 23: Colombia – Number of Cards in Circulation by Card Type (Million), 2009–2018

Table 24: Colombia – Transaction Volume by Card Type (Million), 2009–2018

Table 25: Colombia – Transaction Value by Card Type (COP Trillion), 2009–2018

Table 26: Colombia – Transaction Value by Card Type (US$ Billion), 2009–2018

Table 27: Colombia – Personal and Commercial Cards Transaction Value (COP Billion), 2009–2018

Table 28: Colombia – Personal and Commercial Cards Transaction Value (US$ Billion), 2009–2018

Table 29: Colombia – Number of Debit Cards in Circulation (Million), 2009–2018

Table 30: Colombia – Debit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 31: Colombia – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 32: Colombia – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 33: Colombia – Number of Debit Cards in Circulation By Scheme (Thousand), 2009–2013

Table 34: Colombia – Debit Cards Transaction Value By Scheme (COP Trillion), 2009–2013

Table 35: Colombia – Debit Cards Transaction Value By Scheme (US$ Billion), 2009–2013

Table 36: Colombia – Debit Cards Transaction Value by Issuer (COP Million), 2009–2013

Table 37: Colombia – Debit Cards Transaction Value by Issuer (US$ Billion), 2009–2013

Table 38: Colombia – Number of Credit Cards in Circulation (Million), 2009–2018

Table 39: Colombia – Credit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 40: Colombia – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 41: Colombia – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 42: Colombia – Number of Credit Cards in Circulation By Scheme (Thousand), 2009–2013

Table 43: Colombia – Credit Cards Transaction Value By Scheme (COP Trillion), 2009–2013

Table 44: Colombia – Credit Cards Transaction Value By Scheme (US$ Billion), 2009–2013

Table 45: Colombia – Credit Cards Transaction Value By Issuer (COP Trillion), 2009–2013

Table 46: Colombia – Credit Cards Transaction Value By Issuer (US$ Billion), 2009–2013

Table 47: Colombia – Credit Cards Balance Outstanding By Issuer (COP Trillion), 2009–2013

Table 48: Colombia – Credit Cards Balance Outstanding By Issuer (US$ Billion), 2009–2013

Table 49: Colombia – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Table 50: Colombia – Commercial Cards Transaction Value (COP Billion), 2009–2018

Table 51: Colombia – Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 52: Colombia – Card Fraud (COP Million), 2009–2013

Table 53: Colombia – Card Fraud (US$ Million), 2009–2013

Table 54: Colombia – Number of Prepaid Cards in Circulation (Million), 2009–2018

Table 55: Colombia – Prepaid Cards Transaction Value (COP Trillion), 2009–2018

Table 56: Colombia – Prepaid Cards Transaction Value (US$ Billion), 2009–2018

Table 57: Colombia – Open-Loop Prepaid Cards, 2009–2018

Table 58: Colombia – Closed-Loop Prepaid Cards, 2009–2018

Table 59: Key Definitions

List of Figures

Figure 1: Colombia – Payment Instruments Shares by Transaction Value (%), 2009 and 2013

Figure 2: Colombia – Payment Instruments Shares by Transaction Volume (%), 2009 and 2013

Figure 3: Colombia – Payment Cards Transaction Value and Growth, 2009–2018

Figure 4: Colombia – Total Population (Million) and Proportion Between 15–64 Years, 2009–2018

Figure 5: Colombia – Nominal GDP Per Capita (US$) and Real GDP Growth Rate (%), 2009–2018

Figure 6: Colombia – Volume of ATMs and Penetration, 2009–2018

Figure 7: Colombia – Volume of POS Terminals and Penetration, 2009–2018

Figure 8: Colombia – Retail Sales Value (COP Trillion), 2009–2018

Figure 9: Colombia – Cards and Payments Industry Segmentation by Card Type

Figure 10: Colombia – Outbound Trips Volume and Spending, 2009–2018

Figure 11: Colombia – Inbound Trips Volume and Spending, 2009–2018

Figure 12: Colombia – Card Shares In Terms of Numbers in Circulation (%), 2009–2018

Figure 13: Colombia – Card Shares in Terms of Transaction Volume (%), 2009–2018

Figure 14: Colombia – Card Shares in Terms of Transaction Value (%), 2009–2018

Figure 15: Colombia – Personal and Commercial Cards, Transaction Value (COP Billion), 2009–2018

Figure 16: Colombia – Number of Debit Cards in Circulation (Million), 2009–2018

Figure 17: Colombia – Debit Cards Transaction Volume by Channel (Million), 2009–2018

Figure 18: Colombia – Debit Cards Transaction Value by Channel (COP Trillion), 2009–2018

Figure 19: Colombia – Debit Cards Scheme Shares in Terms of Number of Cards in Circulation (%), 2013

Figure 20: Colombia – Debit Cards Scheme Market Share in Terms of Transaction Value (%), 2013

Figure 21: Colombia – Debit Cards Issuers’ Market Shares in Terms of Transaction Value (%), 2013

Figure 22: Colombia – Number of Credit Cards in Circulation (Million), 2009–2018

Figure 23: Colombia – Credit Cards Transaction Volume by Channel (Million), 2009–2018

Figure 24: Colombia – Credit Cards Transaction Value by Channel (COP Billion), 2009–2018

Figure 25: Colombia – Credit Cards Scheme Market Share in Terms of Number of Cards in Circulation (%), 2013

Figure 26: Colombia – Credit Cards Scheme Market Share in Terms of Transaction Value (%), 2013

Figure 27: Colombia – Credit Cards Issuers’ Market Share in Terms of Transaction Value (%), 2013

Figure 28: Colombia – Credit Cards Issuers’ Market Share in Terms of Outstanding Balance (%), 2013

Figure 29: Colombia – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Figure 30: Colombia – Commercial Cards Transaction Value (COP Billion), 2009–2018

Figure 31: Colombia – Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2009 and 2013

Figure 32: Colombia – Number of Prepaid Cards in Circulation (Million), 2009–2018

Figure 33: Colombia – Prepaid Cards Transaction Value (COP Trillion), 2009–2018

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