Volume of sales in the month of May 2007 rose by 7% as compared to May 2006. Volume of sales for credit cards grew by 19% annually to 15.0bn reais. Credit card demand (both corporate as well as individual credit) is also increasing rapidly. A strong and better macroeconomic environment fuels market for credit card in Brazil, both consumer as well as commercial credit is rising rapidly.
In the corresponding period volume of sales of debit card also grew by 26% to 6.60bn reais. Private label volume of sales grew by 15% to 2.30bn reais in the month of May 2007. People use debit cards in Brazil quite frequently for making small daily purchases, since they are inexpensive compared to cheques as well as hassle free.
Purchase costs to debit credit as well as private label cards touched 400 Million in May 2007, a rise of 16% over May 2006 and the maximum ever since December 2006. Brazil is amongst the largest as well as fastest growing markets for credit in Latin America. Over the last three years, entire user credit outstanding grew 30% on a compound yearly basis, fueled by rapidly rising household disposable incomes.
RNCOS’ recent report “Opportunities in Brazil Banking Sector” also stated the rise in use of debit and credit cards. As per the report, use of credit cards as well as debit cards in Brazil is increasing with appreciable growth rate. During the period 2000 to 2006, the number of transactions by credit and debit cards increased at a CAGR of 21.61% and 41.21% respectively to reach the corresponding values of around 2284 Million and 1633 Million by 2006 end.
The report also attributed increase in per head disposable income of Brazilians as well as the country’s growing economy as the major factors responsible for driving banking industry in Brazil.
This research report also addressed some other interesting issues and facts which are critical for the success in Brazilian banking industry like the position of Brazil banking industry with respect to the world and Latin America banking industry, the future outlook of the industry in terms of bank deposits, bank loans and bank assets, as well as various opportunities and challenges of this industry.
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