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July 16, 2018

Chile: Changing lifestyles boost card uptake

By Patrick Brusnahan

Cash remains the preferred method of consumer payment in Chile, accounting for 73% of the total payment transaction volume in 2017.

However, payment card transactions are gradually replacing cash in Chile, mainly as a result account of government and bank initiatives such as a financial inclusion programme and infrastructure modernisation.

Furthermore, government efforts to provide basic banking and financial services have helped a large proportion of the population to become banked: the percentage of individuals aged over 15 with an account grew from 56.7% in 2013 to 77.6% in 2017.

Payment card uptake has been accelerated by the availability of convenient and more accessible banking models in the country. For instance, BancoEstado offers branchless banking services through Caja Vecina banking terminals, to bring unbanked consumers into the formal banking system.

Changing lifestyles and rises in the economically active population, disposable income and the popularity of online shopping supported the growth of payment cards during the period between 2013 and 2017 – a trend that is anticipated to continue to 2021.


Banks are offering low-cost accounts to bring more of the population into the formal banking system.

BancoEstado, for instance, issues the low-cost CuentaRUT savings account to those who do not qualify for conventional current accounts. The bank issues a debit card with the account, which can be used at ATM and POS terminals, although cheque books are not issued.


The scheme is offered to legal resident females aged 12 and above, and legal resident males aged 14 and above, with the aim of capturing the country’s unbanked population. According to BancoEstado, there were 9.7 million CuentaRUT accounts as of September 2017.


Demand for credit cards increased between 2013 and 2017, mainly as a result of increased short-term credit demand among the lower- and middle-class populations. Banks responded to this by lowering interest rates for credit card consumer loans; according to the central bank, the average interest rate charged fell from 34.3% in January 2013 to 21.9% in December 2017.

Another important driver for growth of credit cards is the option to convert purchase amounts into monthly instalments. Santander Chile offers an interest-free instalment payment facility on its credit cards, while Scotiabank Chile and BancoEstado also offer instalment facilities to credit card holders at preferential rates.


E-commerce transaction value grew at a strong CAGR of 22.0% between 2013 and 2017, supported by a rise in the number of internet and smartphone users coupled with a growing preference of online shopping.

E-commerce transactions are high in Chile during festive seasons. Cyber Day in May, for instance, marks the most important day for e-commerce transactions, with online merchants including travel and tourism, electronics, and clothing and apparel retailers recording high levels of demand.

Growth in the e-commerce market is also supported by the availability of various alternative payment solutions such as PayPal, Servipag, Masterpass and Visa Checkout.


The number of POS terminals rose from 142,417 in 2013 to 202,850 in 2017, indicating that Chilean consumers are increasingly inclined to use cards to make in-store payments. As merchants recognise the benefits of switching from traditional POS terminals to ones with more features and higher levels of mobility, mPOS terminal uptake is increasing.

In November 2017, BancoEstado partnered with SumUp to offer mobile card acceptance to small businesses, collectively intending to serve 600,000 SMEs and 1.2 million sole proprietors.

In May 2016, Transbank launched an mPOS solution that enables small businesses and service providers to accept card payments in Chile. The solution involves the conversion of smartphones into POS devices with the help of a wireless pinpad card reader that is connected to the smartphone via Bluetooth.

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