Understanding Brazilian Issuers and Card Schemas

Brazil has more than 162 active banks and several card brand options. Yet, only a few organizations dominate the card issuing market and are key players in the local card schemas. 

Card Issuers and Card Brands. What is the difference?

First, to understand the main participants of card schemas in Brazil, let's differentiate card issuers from card brands. A card issuer is a financial institution, often a bank or credit union, that provides credit, debit, and/or prepaid cards to consumers. Also, it is responsible for managing the relationship between the cardholders and their accounts. 

On the other hand, a card brand, which can also be called card network or association, is the responsible for managing and promoting cards. It is the card brand's duty to regulate who, where, and how cards are used.

Issuing banks in Brazil

The Brazilian Central Bank's reports (February - 2022) have shown 162 active banks and  18.186 bank agencies in the country. At the end of 2021, 85% of the Brazilian population was banked, which represents 182.2 million people. However, the top 5 largest banks concentrated more than 80% of the total national lending volume by the end of 2020. These are all traditional banks, which are listed as follows: Itaú Unibanco, Bradesco, Banco do Brasil, Santander and Caixa Econômica. Note that, from these banks, only Santander is a foreign institution (Spanish). Additionally, Caixa Econômica belongs to the government, while the others are private organizations. 

Although the above mentioned banks are the main card issuers in Brazil, digital banks are booming and have gained a lot of popularity since the last decade. Examples of popular Brazilian non-traditional digital banks include: Nubank, C6 Bank, Neon and Banco Inter.

Brazilian's favorite card brands

Now that you are aware of the issuing banks in Brazil, let's have a deep look at the top card brands. There are several options for Brazilians, but only a few are very popular. So, we have listed the top five options along with a short description for each of them. 

Mastercard: active in over 210 countries, it is one of the most recognized and accepted card brands in the world, despite leading the market in Brazil, along with Visa. Mastercard has officially arrived in the country in 1996 and currently offers credit, debit and prepaid cards. There are also four card tiers with different benefits within each category: Standard, Gold, Platinum and Black.

Visa: the most popular card network in the world with 353 million cards in circulation, Visa arrived in Brazil in 1971. Along with Mastercard, it is the most popular card brand in Brazil. Visa also offers credit, debit and prepaid cards and has five membership tiers with different benefits within each category: Visa Classic, Visa Platinum, Visa Signature, Visa Gold e Visa Infinite.

American Express: present in more than 160 countries, this card brand is more popular among the Brazilian upper-classes. American Express (AMEX) focuses on consumers with a minimum monthly wage of BRL 5,000 - more or less USD 1,000 - and has a partnership with several local acquirers such as Cielo, Rede, GetNet, Stone, Credicard. AMEX currently offers three card categories with different benefits within each of them: Green, Gold and Platinum. 

Hipercard: different from American Express, this card brand is very accessible to all social classes since it requires a low income for card eligibility. Created in 1969, Hipercard is a Brazilian credit card manager with acceptance in the whole national territory and over 1 million sales point. It is very common in supermarkets and offers two credit limits for its clients: one for lump-sum payments and one for payments broken up into installments. 

Elo: founded by three of the largest Brazilian banks - Banco do Brasil, Bradesco e Caixa Econômica - this is the most popular Brazilian card brand. It has more than 140 million cards issued and counts with credit, debit and prepaid modalities. Despite being accepted in Argentina, Chile and Portugal, Elo has several special programs for small, medium and large businesses.

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