Brazilian Payments UBS Evidence Lab inside Payments Trends

The 7^th interaction of UBS Evidence Lab survey to assess the key trends in the payments industry captured some of the impacts from Covid-19 on merchants (i.e. higher use of debit cards, increase in QR Codes) and suggests that card volumes should recover in 2021, while competitive pressure remains, although, less intense. Acquirers continue improving their value proposition with broader offerings, especially credit, which should help to increase client retention.

1) Cards volume should recover in 2021 with better mix, with improved sentiment about sales and rising credit cards usage; 2) competitive pressure remains, with merchant discount rates down; 3) more merchants are working with two or more acquirers, as a reflection of competition, while point of sale revenues are likely to continue to be pressured; 4) prepayment volumes are expected to increase but could be partially offset by lower spreads; 5) acquirers’ own distribution channels continue to gain relevance with players investing in their own sales force; 6) room for increasing penetration of credit offering among merchant base, with low rates being key; and 7) QR code acceptance and adoption are increasing, but are not an imminent threat.