Global Payments the Latest Entrant into the Brazilian Merchant Acquiring Market

by Terry X Xie 0

Global Payments become the latest internationalacquirer to enter the Brazilian market after it opened up forcompetition. In the past, VisaNet exclusively handled all Visa’sacquiring while RedeCard handled MasterCard’s. But regulatorsforced an end to the exclusive deals last year. Since then, themarket has been very active with lot of new players trying tobenefit from the newly opened opportunity. For example, in March2010, Santander Brasil launched a merchant acquiring JV with cardprocessing company, GetNet. And, in December 2010, Elavon teamedwith Citibank to formed a merchant acquiring JV in Brazil.

Global Payments will build a new acquiring business from the groundup through potential local partners. But the local partners won’tbe banks, according to the president of Global Payments.

In addition to the removal of exclusive acquiring deals, theregulators also demanded separation of acquiring from processing,creating lots of opportunities for payment processors like FirstData. First Data has been in the market since 2002 and acquiredCheck Forte, a local processor. In addition, a new payment cardnetwork, the Elo, was formed by some of Brazil’s largest banks,Banco do Brasil, Bradesco, and Caixa. These banks plan to mergetheir credit and debit card businesses under the new brand,targeting mainly the low-income, un-banked population in Brazil.The first Elo card was originally planned to be launch by end of2010 but that appears to have been postponed. The new card networkwill also generate market opportunities for merchant acquirers andprocessors.