U.S. Acquirers Continue to Enter the Latin American Market

Navigator Edition: August 2016
By: Janinne Dall’Orto

Over the last 15 years, the Latin American acquiring market has been raising interest among U.S. acquirers. First Data was the first to move aggressively into the region, but now, you can also count Elavon, Global Payments, Evertec, and Evo Payments International as having well established operations in the market. The timeline (see Figure 1) depicts, U.S. acquirers market entry.

Figure 1: U.S. Acquirers Latin America Market Entry Timeline

Figure-1_-US-Acquirers-Latin-America-Market-Entry-TimelineNote: First Annapolis Consulting served as strategic advisors in the highlighted transactions.
Source: First Annapolis Consulting analysis, company websites, and press releases.

Healthy growth rates and recent regulatory activity by some of the governments in the region continue to attract interest in the region. E-commerce and F2F sales volume in the region have been growing at impressive rates in the largest markets (see Figure 2). However, the markets still exhibit some challenges, such as poor delivery infrastructure affecting e-commerce transactions, low POS penetration in most markets and a clear preference for cash payments in the region.

Figure 2: E-commerce and F2F Card Volume Growth in Selected Latin American Markets

Figure-2_-E-commerce-and-F2F-Card-Volume-Growth-in-Selected-Latin-American-MarketsSource: Euromonitor, First Annapolis Consulting analysis.

In many Latin American markets there has been regulatory activity aimed at promoting increased competition and increased card acceptance and usage of electronic payments. Mexico and Chile are examples of markets where regulatory action and pressure are significantly impacting the acquiring market.


In the last couple of years, Mexican regulators have enacted rules aimed at opening the market to increased competition with the purpose of increasing card acceptance, displacing cash payments, and increasing card-based payments in the market.

Traditionally the market was dominated by bank acquirers and two domestic switches / processors. Recent regulations have opened the market to non-bank acquirers and for additional local switches. Few players have submitted applications and Mastercard has recently received a domestic switch license.


Transbank, an entity owned by most Chilean banks, has traditionally been the only acquirer and acquiring processor in the market. The Chilean regulators have been putting pressure on Transbank to avoid monopolistic behavior and to ensure that Transbank provides competitive services. This year, Mastercard awarded an acquiring license to an additional player, Multicaja, who will become operational in the second semester of 2016. Multicaja will focus on broadening acceptance among small merchants, where card penetration is low.

Impact of U.S. Acquirers Entry

As a result of the presence of U.S. acquirers in these markets, we expect to see some of U.S. acquiring business practices being adopted in the region, for example, higher reliance on fee based pricing for specialized products and services, an emphasis on product differentiation, and a restructuring of sales organizations to include various types of sales partnerships.

For more information, please contact Janinne Dall’Orto, Senior Manager, janinne.dallorto@firstannapolis.com, specializing in Merchant Acquiring.

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