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Banco do Brasil: credit card may mean MasterCard, Visa

The Banco do Brasil has a new credit card brand, and this new line may allow for Brazil’s largest bank in terms of assets to gain negotiating power with MasterCard and Visa. According to Paulo Rogério Caffarelli, the Banco...
 Banco do Brasil
 
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The Banco do Brasil has a new credit card brand, and this new line may allow for Brazil’s largest bank in terms of assets to gain negotiating power with MasterCard and Visa.

According to Paulo Rogério Caffarelli, the Banco do Brasil Vice President of new business, the bank’s new credit card brand is called Elo, and has been launched with private sector rival Bradesco.

In a recent interview, Caffarelli stated that Itaú Unibanco currently has 50 billion reais ($28.9 billion American dollars) more than the Banco do Brasil in revenues, giving them the power to negotiate the best conditions, even compared to Bradesco and Banco do Brasil.

In reality, in 2009 Itaú Unibanco actually had 76.7 billion reais in financial intermediation income. This is a vastly large difference to the Banco do Brasil’s 64.4 billion reais, or Bradesco’s 16.8 billion reais in the same year.

Caffarelli reported that the launch of Elo will help reduce the input costs for both the Banco do Brasil and Bradesco. Additionally, the new Elo credit card, which is being considered Brazil’s first truly national brand, will allow for the two banks to have a new customer base.

Last week, Banco do Brasil and Bradesco announced their plans to seek 15 percent market share within five years with their new credit card and make one billion reais in synergies from the deal.

It is believed that the experience Banco do Brasil and Bradesco had with the card acquirer Cielo and Visa Vale will help prevent friction or problems between the two banks. New agreements with retailers and supermarkets should help as well.



 



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