Mercado Pago, leader among prepaid cards in Chile

Chile has experienced a rapid adoption of non-bank prepaid cards. So much so, that at the end of November last year, there were 8,816,415 active accounts around them, according to experts behind the Financial Market Commission (CMF); which translates into a significant increase of 86% compared to the same period in 2022.

A study by América Retail and Malls found that there are three non-bank prepaid cards that dominate the Chilean market. These are:

• Mercado Pago
• Fpay
• Tenpo

Mercado Pago 

This is the fintech of Mercado Libre, the Latin American eCommerce giant from Argentina. The account on this platform works as a virtual wallet, so it allows sending and receiving payments from credit or debit cards, transfers or cash recharges. It offers QR code payments, among other tools for merchants. As of November 2023, it dominated 44% of the national market with 3.89 million active cards.

Felipe Naranjo, director of Individuals Mercado Pago in Chile, attributes this success to its ability to address needs not satisfied by traditional banking. “The free product, easy access and multiple functions, including the generation of daily returns on account balances, are elements that have contributed to the financial inclusion of millions of people,” he added.

Fpay 

Despite the gradual closure of its operations, Fpay had by the same date a 28% market share with 2.4 million cards. Its purpose from the beginning (in 2020, in the midst of the coronavirus pandemic) had been to offer a tool with which to manage, in one place, all the cards held by the different issuing banks.

These were some of the benefits that consumers could obtain by joining its mobile application:

• Transfer directly to cell phone contacts.
• Pay at exclusive Fpay checkouts at Falabella, Sodimac, Tottus, etc. In fact, they could access queue-free payments with the “scan and pay” option.
• Integrate all means of payment in one place, adding all debit and credit cards from any bank at once.
• Automatically enroll in the CMR Points loyalty program and redeem products or services.

Tenpo 

Finally, there is Tenpo; considered one of the best digital accounts in Chile. This is due to the various functions it is able to offer:

• Manage dollars: allows you to add, save and withdraw PayPal dollars directly from the mobile application, guaranteeing security and immediacy. It is worth mentioning that the commission for each transaction carried out is only two dollars.
• Invest: in alliance with Credicorp Capital, it offers the opportunity to invest in funds denominated as “heavy metal”, “Latam innovation”, “liquidity”, “debt 360 degrees”, “light reggae”, “power pop”, among others.
• Transfer abroad: you can make transfers with good commissions to your relatives, friends and acquaintances in Argentina, Brazil, Bolivia, Colombia, Haiti, Mexico, Paraguay, Peru, Uruguay and Venezuela. Most important of all, you are allowed to track them.
• Pay bills: electricity, water, internet or cable services can be paid from the application. In fact, its developers have enabled the option of activating prior notifications so that users are up to date with their debts.

As of November 2023, it had 1.49 million active cards; comprising 17% of the market.