First Data has a number of payments initiatives planned for the next year in Brazil, where the mix of mobile and card adoption suggests big potential for electronic card payments.
"Brazil is mature enough and stable enough economically to see a strong payments market that is growing," said Deborah Guerra, a senior vice president and general manager who's responsible for First Data's business in Brazil, where the Atlanta-based processor has had a presence since 2002. Guerra has been with First Data for three years and works out of its Sao Paulo location.
Last week, First Data formally launched Bin, a $150 million initiative that will leverage a partnership with Bancoob to acquire merchants and offer card payments and electronic transactions in Brazil, Guerra said.
The country's credit and debit card payments are on pace to reach $426 billion in 2014, which would be an increase of 17.1% over 2013, according to the Brazilian Association of Credit Card Companies and Services. Card growth is expected to remain about the same for the next several years, and Brazil should be the fifth largest payments market by 2015, Guerra said.
Brazil is the fifth largest mobile market, with the number of mobile subscriptions exceeding 137% of the country's population.
"We're just starting to see the growth of mobile acceptance in the country, and there is a high level of smartphone penetration," Guerra said.
In addition to offering payment processing services, First Data is planning to introduce Clover, its tablet-based point of sale system; and Pogo, First Data's mobile card reader, by early 2015. First Data sees an opportunity to provide EMV-compliant mobile acceptance in a country that has completed its migration to chip-enabled cards, Guerra said.
First Data is working to adjust its technology to enable installment payments, which are more common in Brazil than other countries.
"There are specific functions that have to be developed for the Brazilian market," Guerra said. "It's not just a standard point of sale solution."
First Data is also offering sales support and other client services to its acquiring menu. The processor faces competition from Cielo SA and Itau Unibanco Holding's SA Redecard, which control more than 90% of the Brazilian payments market, according to Reuters. Guerra did not address First Data's strategy for getting a competitive advantage over the two incumbents.
Brazil's potential as a growth market for electronic payments is also attracting other companies. The mobile point of sale company iZettle is targeting Brazil, and MasterCard is pursuing e-commerce share in the country.
Brazil is an enormous but complicated market for mobile point of sale, said Phil Philliou, a payments consultant who runs Philliou Partners and is CEO of TruBeacon. The established players, Cielo and RedeCard, have strong contracts with retailers, he says.
"To date, competitors have provided little reason to switch," Philliou said. "Mobile may provide that opportunity for First Data. Brazilians, rich and poor, all have mobile devices and love rewards. [Mobile point of sale] may bring that all together for Brazilian consumers and retailers."
First Data is additionally expanding in other countries, with plans to build a mobile point of sale market in India, which has similar dynamics to Brazil. First Data has a presence in 36 countries on six continents.
"We're focused right now in products that will allow us to respond to and capture opportunity in a number of markets," Guerra said.