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Payment in Chile New Entrants and Disruptors Analysis

New Entrants and Disruptors

The Chilean payment industry value chain is experiencing significant disruption and transformation driven by the entry of new players and the emergence of innovative business models. These new entrants and disruptors are challenging the established order, particularly the historical dominance of incumbent players like Transbank, and introducing greater competition, efficiency, and a wider range of options for consumers and merchants. The key drivers behind this influx of new players are regulatory changes, such as the Fintech Law and the dismantling of the acquiring monopoly, coupled with rapid technological advancements and evolving consumer preferences.

Here is a detailed report on the key new entrants and disruptors identified in the value chain analysis and their impact:

  1. New Merchant Acquirers (Getnet by Santander, EVO Payments/Bci, Kushki):

    • Detailed Report: Historically, Transbank held a near-monopoly in the merchant acquiring space in Chile. The entry of new players like Getnet (launched by Banco Santander), EVO Payments (partnering with Bci), and non-bank acquirers such as Kushki represents a fundamental disruption to this segment. [16, 17, 26] These entities are directly competing with Transbank to sign up merchants and process their electronic transactions.
    • Impact: Their entry has led to intense competition in the Acceptance & Wallets step, specifically in merchant acquiring. This competition is driving down Merchant Discount Rates (MDRs) and forcing players to offer more competitive pricing models (including Interchange++), better technology, and improved service level agreements, such as faster settlement cycles for merchants. [17] They are also introducing new POS technologies and integration options. [17]

  2. Fintech Startups (Digital Wallets, A2A Providers, BNPL, etc.):

    • Detailed Report: Chile has a vibrant fintech ecosystem with 348 active startups in 2024, a significant portion of which are focused on payments and remittances. [7, 10] Disruptors include digital wallet providers like MACH, Tenpo, and Fpay (linked to Falabella Financial Services), Account-to-Account (A2A) payment initiation providers like Khipu, and Buy Now, Pay Later (BNPL) specialists such as Wibond. [10] These companies often leverage agile technology and focus on specific niches or user experiences.
    • Impact: Fintechs are disrupting the Payment Initiation and Acceptance & Wallets steps. Digital wallets offer new ways for consumers to pay online and in-store, often bypassing traditional card rails or integrating them in a mobile-first manner. [10] A2A providers like Khipu offer direct bank transfers as an alternative payment method, challenging card dominance in e-commerce checkout. [10] BNPL players disrupt traditional credit and payment timing. [10] Many fintechs also operate as payment gateways, providing merchants with integrated solutions to accept a variety of payment methods. [11] They often introduce innovative business models, such as lower transaction fees for merchants compared to traditional card MDRs. [10]

  3. Global Payment Gateways and Processors (Worldline, EBANX, APEXX Global, PayRetailers):

    • Detailed Report: International Payment Service Providers (PSPs) and gateways are increasingly active in the Chilean market, either directly or through partnerships. Players like Worldline, EBANX, APEXX Global, and PayRetailers (which recently received authorization for cross-border acquiring) bring global expertise and technology to the local landscape. [1, 16, 15]
    • Impact: These global players primarily impact the Processing and Acceptance & Wallets steps. They offer advanced processing capabilities, international connectivity, and often provide comprehensive payment gateway services that enable merchants (both local and international) to accept a wide range of payment methods efficiently. [1, 16] Their entry intensifies competition among payment gateways and processors and facilitates cross-border e-commerce by providing localized payment solutions for international merchants targeting the Chilean market. [15]

  4. Digital Wallets Backed by Major Institutions (Mercado Pago, MACH by Bci, Fpay by Falabella):

    • Detailed Report: While Mercado Pago is part of the larger Mercado Libre ecosystem, and MACH and Fpay are linked to major Chilean banks/retailers (BCI and Falabella respectively), their operation as digital wallets represents a disruptive force. [10] They leverage the existing customer bases of their parent companies while offering distinct digital payment experiences. [10]
    • Impact: These wallets significantly impact the Payment Initiation and Acceptance & Wallets steps. They drive consumer adoption of digital payments, provide alternative payment methods at checkout (competing with cards), and build direct relationships with consumers and merchants. [10] They compete not only with traditional banks but also with independent fintech wallets. Their integrated ecosystems (linking payment with e-commerce or retail) can also create strong network effects.

These new entrants and disruptors collectively contribute to a more dynamic and competitive payment ecosystem in Chile, pushing innovation and potentially leading to better services and lower costs for end-users.

Table of the Impact of These New Players

Value Chain Step Impact of New Entrants and Disruptors
Payment Initiation Increased Options: New digital wallets, A2A providers (Khipu), and BNPL services (Wibond) offer consumers and merchants alternative ways to initiate payments beyond traditional cards and bank transfers. [10] Competition at Checkout: Payment gateways offered by fintechs and global PSPs increase options for merchants, influencing the payment methods presented to consumers at checkout. [11]
Authentication & Authorization While core authentication protocols (like 3-D Secure) are often leveraged, new entrants (especially global PSPs and larger fintechs) may introduce enhanced or specialized fraud detection and prevention tools within their platforms, integrating AI/ML for more sophisticated monitoring. [10] Increased transaction volumes processed by diverse players necessitate robust, potentially distributed, fraud management capabilities. [10]
Processing Increased Competition & Diversity: Entry of new acquirers and global PSPs introduces new processing platforms, routing logic, and technical infrastructure, challenging the historical dominance of Transbank's switching services. [16] This can lead to greater efficiency and potentially more resilient processing. [16]
Clearing & Settlement While the core clearing (ComBanc) and settlement (LBTR) infrastructure remains managed by established entities (banks, Central Bank), the increased volume and diversity of transactions initiated and processed by new players feed into these systems. The operational load on clearing and settlement increases, requiring efficiency and capacity. [10] Dispute resolution processes might become more complex with a larger number of intermediaries involved. [10]
Acceptance & Wallets Major Disruption: This is the step most significantly impacted. New acquirers (Getnet, EVO/Bci, Kushki) directly challenge Transbank's monopoly, leading to intense competition, lower MDRs, and varied pricing models (Interchange++). [17, 26] Digital wallets (Mercado Pago, MACH, Tenpo) compete for consumer adoption and merchant acceptance, introducing new payment flows and lower potential transaction costs for proprietary wallet payments. [10] New APM providers expand payment options for merchants.
Infrastructure & Networks New players connect to existing card networks (Visa, Mastercard, Redcompra) and interbank networks, increasing traffic and utilization. [10] Fintechs building A2A solutions leverage bank APIs and potentially alternative network connections. [10] The need for robust and interoperable infrastructure is highlighted by the increased number of participants. [10]
Regulation & Oversight Increased Scope: Regulatory bodies (CMF) have a larger number of diverse entities to license, supervise, and ensure compliance with the Fintech Law and other regulations (AML/CFT, consumer protection). [4, 10] Regulatory efforts focus on ensuring fair competition, interoperability between new and old players, and managing systemic risk in a more fragmented ecosystem. [10]

References

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