Skip to content

Payment in Chile Porter's Six Forces Analysis

The Chilean payment industry, as described in the value chain analysis, is subject to a dynamic interplay of forces that shape its competitive landscape and profitability. Applying Porter's Six Forces framework provides a structured view of these pressures. The six forces are: Threat of New Entrants, Bargaining Power of Buyers (Customers), Bargaining Power of Suppliers, Threat of Substitute Products or Services, Intensity of Rivalry, and the Power of Complementors.

Detailed report on the six forces of Porter applied to the Payment value chain.

1. Threat of New Entrants

The threat of new entrants in the Chilean payment industry is high and increasing, primarily driven by regulatory changes and technological advancements.

  • Regulatory Liberalization: The dismantling of Transbank's historical monopoly in merchant acquiring and the introduction of the Fintech Law have significantly lowered barriers to entry for non-bank institutions and fintechs. [17] New players like Getnet (Santander), EVO/Bci, and non-bank acquirers like Kushki are entering the merchant acquiring space, challenging established players. [17, 26]
  • Fintech Innovation: The rise of fintech startups (348 active in 2024) focused on payments and remittances introduces new models and technologies, such as digital wallets, BNPL, and A2A payments, bypassing traditional infrastructure. [7, 10, 14] These companies often have lower operational costs and can offer more niche solutions. [10]
  • Technology: Cloud computing, open APIs (mandated by the Fintech Law), and readily available payment processing technologies reduce the need for massive upfront infrastructure investment, making it easier for new players to launch services. [10, 4] However, the complexity of the Fintech Law's secondary regulations (over 70 rules) can still pose a compliance challenge for new entrants. [10]

Overall, while regulatory hurdles related to licensing and compliance remain, the strategic intent of the new regulatory framework is to encourage competition, making the threat from new entrants substantial. [4, 11, 10]

2. Bargaining Power of Buyers (Customers - Consumers and Merchants)

The bargaining power of buyers, encompassing both consumers and merchants, is moderate to high and is increasing.

  • Merchants: Merchants, particularly larger ones, gain significant bargaining power from the increased competition in the acquiring market. [17, 26] With multiple acquirers and PSPs (Transbank, Getnet, EVO/Bci, Kushki) competing for their business, merchants can negotiate lower Merchant Discount Rates (MDRs) and better terms (e.g., faster settlement cycles). [17] The move towards more transparent Interchange++ pricing models by new entrants further empowers merchants by providing clarity on cost components. [17]
  • Consumers: Consumers benefit from a wider array of payment options (cards, digital wallets, A2A, BNPL), leading to increased choice and convenience. [10] The growing adoption of digital wallets and A2A transfers, often offering zero direct fees to consumers for initiating payments, increases their power to choose cost-effective methods. [10] However, financial inclusion gaps still exist, limiting the power of underserved segments who remain reliant on cash. [10] Regulatory focus on consumer protection also indirectly increases consumer power. [4]

The increased availability of alternatives and the regulatory push for transparency and competition are key drivers of buyer power.

3. Bargaining Power of Suppliers

The bargaining power of suppliers in the Chilean payment industry is moderate to high, depending on the specific supplier type.

  • Payment Networks (Visa, Mastercard): Global card networks hold significant power due to their established infrastructure, brand recognition, and large user bases. [10] They set network rules and charge scheme fees, which are a component of the MDR. [17] Local networks like Redcompra also hold power, particularly for debit transactions. [28]
  • Technology Providers: Providers of core payment technology (e.g., processing platforms, fraud prevention software, POS hardware) can exert power, especially for specialized or proprietary solutions. However, increasing availability of cloud-based services and API-driven architectures might gradually reduce this power.
  • Infrastructure Providers (Telcos): Mobile network operators are essential suppliers for mobile and online payments. [22] While there are multiple players (Entel, WOM, Movistar, Claro), reliable connectivity is a critical input, giving them some bargaining power over players dependent on mobile channels. [22]
  • Central Bank and Clearing Houses: The Central Bank (LBTR) and clearing houses (ComBanc) are unique suppliers of essential clearing and settlement infrastructure. [10, 23] Their power is absolute as they provide the foundational rails for the system, though their pricing and rules are often set with public interest objectives. [10, 23]
  • Funding Partners (for BNPL): For BNPL providers, access to capital or funding partners is crucial, giving these financial institutions or investors significant bargaining power.

The power of suppliers varies, with network operators and core infrastructure providers holding the most significant influence.

4. Threat of Substitute Products or Services

The threat of substitute products or services is high and is actively reshaping the market.

  • Cash: Although its share is declining (3% of transactions), cash remains a substitute, particularly for low-value transactions and in segments with lower digital literacy or access. [10] Servipag facilitates cash payments for bills and online purchases, maintaining its relevance as a substitute for fully digital methods. [10]
  • Account-to-Account (A2A) Transfers: With the push towards open finance and the emergence of PISPs, direct A2A transfers are becoming a significant substitute for card payments, especially in e-commerce. [10] Khipu is a current example of a player facilitating this. [10] A2A can offer lower transaction costs for merchants, making it an attractive alternative. [10]
  • Buy Now, Pay Later (BNPL): BNPL services are growing rapidly as an alternative credit and payment method, substituting traditional credit card usage or consumer loans for specific purchases. [10] Wibond is mentioned as a player in this space. [10]
  • Digital Wallets: While often built upon existing card or bank infrastructure, digital wallets (Mercado Pago, MACH, Tenpo) can act as substitutes for physical cards or traditional online payment methods by offering a more convenient or integrated user experience. [10]

The increasing adoption and technological development of these alternatives pose a significant threat to traditional card-based payment models.

5. Intensity of Rivalry

The intensity of rivalry in the Chilean payment industry is high and escalating.

  • Acquiring Market: The unbundling of Transbank's monopoly has led to fierce competition among multiple acquirers (Transbank, Getnet, EVO/Bci, Kushki) vying for merchant business. [17, 26] This is driving down MDRs and forcing players to differentiate on service and technology. [17]
  • Digital Wallets and Fintechs: The fintech landscape is crowded, with numerous startups and established players competing in segments like digital wallets, P2P transfers, and online payment gateways. [10, 7] Players like Mercado Pago, MACH, Tenpo, and banks' own digital offerings are in direct competition for users and transaction volume. [10]
  • Innovation Race: Competition is also driven by the need to innovate and offer new services in response to technological changes and regulatory mandates (e.g., developing Open Finance APIs, enhancing fraud prevention). [10]
  • Interchange Fee Impact: The reduction in interchange fees, while aiming to benefit merchants, compresses margins for card issuers, potentially intensifying competition among banks for card portfolios or pushing them towards other revenue streams. [10]

This intense rivalry is a key characteristic of the current Chilean payment market, benefiting users and merchants but challenging the profitability and requiring continuous adaptation from the players.

6. Power of Complementors

The power of complementors is significant and growing, as collaborations and partnerships enhance the value of payment services.

  • Technology Providers and Integrators: Companies that provide essential software, hardware (POS terminals), APIs, and integration services are crucial complementors. [10] Their solutions make it easier for payment players to offer services and for merchants to accept payments. Providers like Worldline, EBANX, and APEXX Global, who offer processing and gateway services, complement the offerings of local acquirers and networks. [10]
  • E-commerce Platforms: E-commerce platforms (like Mercado Libre, which includes Mercado Pago) are powerful complementors, as they drive online transaction volume and integrate various payment methods. [8] Their growth directly benefits payment gateways and acquirers. [8]
  • Mobile Network Operators (MNOs): MNOs provide the fundamental connectivity that enables mobile and online payments, acting as essential complementors to digital payment providers. [22]
  • Financial Institutions (Banks): Banks are simultaneously competitors and crucial complementors. They provide accounts for settlement, issue cards used by digital wallets, and are essential participants in the clearing and settlement systems. [10] The Open Finance framework will increase the importance of banks as complementors through mandated API access for PISPs and AISPs. [4]
  • Reg-tech and Cybersecurity Firms: As fraud risks increase and regulations become more complex, companies offering compliance and cybersecurity solutions are important complementors, providing services that are necessary for payment players to operate safely and legally. [10]

Complementors play a vital role in enabling and enhancing the payment ecosystem. Strong relationships with key complementors can be a source of competitive advantage for payment service providers.

References

  • APEXX Global. Payment Gateway Chile. https://apexx.global/payment-gateways/latam/chile/
  • Banco Central de Chile. Payment systems. https://www.bcentral.cl/web/bch/areas-de-accion/mercado-financiero/sistemas-de-pago
  • Box III.1 – Setting Final Limits to Card’s Interchange Fees. Banco Central de Chile. https://www.bcentral.cl/.../IEF_II_2023_BOX_III_1.pdf
  • CMF Chile. Regulations on Financial Services Providers in the Fintech Act. https://www.cmfchile.cl/.../w3-article-85488.html
  • ComBanc Detailed Assessment Report. Bank for International Settlements. https://www.bis.org/cpmi/publ/d_ccbmss82.pdf
  • GlobeNewswire. Chile Buy Now Pay Later Business Databook 2025. https://www.globenewswire.com/...
  • GlobalData. Chile Cards and Payments – Opportunities and Risks to 2028. https://www.globaldata.com/...
  • IMF Country Report No. 24/42. Chile: Selected Issues. https://www.imf.org/.../Chile-Selected-Issues-544501
  • J.P. Morgan Payments Solutions in Chile. https://www.jpmorgan.com/...
  • Khipu – Open Finance APIs. https://khipu.com/en/
  • PCMI. Chile 2024: Digital Payments and E-commerce Insights. https://paymentscardsandmobile.com/...
  • Rebill. Best Payment Gateways in Chile (2025). https://rebill.com/en/payment-gateways-chile/
  • Servipag Corporate Information. https://www.servipag.com/...
  • Transbank S.A. Company Profile. https://www.emis.com/php/company-profile/Chile/Transbank_S.A._5793177.html
  • VIXIO Regulatory Intelligence. Chile Gives Green Light to Cross-Border Card Acquiring. https://vixio.com/news/payments/chile-gives-green-light-to-cross-border-card-acquiring
  • Worldline Global. Chile Local Payments. https://worldline.com/en-cl/home/solutions/local-payments/latam/chile.html
  • The transformation of merchant acquiring | Thoughtworks Chile. https://www.thoughtworks.com/es/insights/articles/2023/05/08/transformation-merchant-acquiring-chile
  • Finnovista. What You Need to Know About Chile's Fast-Maturing Fintech Market. https://www.finnovista.com/fintech-ecosystems/fintech-chile-2024/
  • Banco Santander-Chile Announces Fourth Quarter 2024 Earnings. GlobeNewswire. https://www.globenewswire.com/news-release/2025/01/30/2820596/0/en/Banco-Santander-Chile-Announces-Fourth-Quarter-2024-Earnings.html
  • Banco De Chile Revenue 2010-2025 | BCH. Macrotrends. https://www.macrotrends.net/stocks/charts/BCH/banco-de-chile/revenue
  • Banco de Chile (BCH) - Revenue - Companies Market Cap. Companies Market Cap. https://companiesmarketcap.com/banco-de-chile/revenue/
  • eSIM Chile. Mobile Operators in Chile 2025. https://esim.holafly.com/how-to/mobile-operators-chile/
  • PAYMENTS AND SECURITIES CLEARANCE AND SETTLEMENT SYSTEMS IN CHILE. https://www.imes.boj.or.jp/english/research/ises/ises00/c09.pdf
  • Fintech Law: CMF Approves Regulation Governing Open Finance System. https://www.eguiguren.cl/en/fintech-law-cmf-approves-regulation-governing-open-finance-system/
  • CMF issues regulations on financial services providers in the Fintech Act, concluding first implementation stage - CMF Chile - Comisión para el Mercado Financiero Chile (portal). https://www.cmfchile.cl/portal/principal/605/w3-article-85488.html
  • Non-bank acquirer | Payment solutions for large companies in LATAM - Kushki. https://www.kushki.com/en/non-bank-acquirer/
  • Chile Proposes Card Acquiring Rule Updates To Help Small Acquirers Grow. https://vixio.com/news/regulation/chile-proposes-card-acquiring-rule-updates-to-help-small-acquirers-grow/
  • PCMI. Leading Payment Methods in Latin America 2025. https://www.paymentscardsandmobile.com/leading-payment-methods-latin-america-2025/