Credit due: thanks to big marketing, MasterCard's market share is on the rise in Mexico and Brazil

Latin Trade, Jan, 2005 by Marisol Rueda, Andreas Adriano

"We accept Credicard, MasterCard, Visa, Diners." That's still a common response from waiters in Brazil when asked what cards are taken. That's because Credicard for a dozen years was the exclusive distributor of the MasterCard brand in Brazil, so much so that Credicard often gets named among the biggest credit-card companies in the world.

During his first years in Brazil, MasterCard Brazil President Desmond Rowan, who is from the United States, found himself irritated when he passed gas stations and, on the sign that listed gas prices, he saw only the Credicard logo. In response, the company developed a marketing strategy directed at sign makers to make them use the correct name--MasterCard.

Thanks to an intense job of marketing and image development, today Rowan sees the logo and name of his company correctly used. Beginning eight years ago, when MasterCard disassociated with Credicard and opened its own office in Brazil, the company has increased its market share along with its brand recognition. In 1996, just 9% of people recognized the brand, according to surveys. By the end of the first quarter of 2004, that number had risen to 54%, much closer to the market leader, Visa, at 64%. "Their figure in 1998 was 78%," says Rowan. "Thanks to the fact that it was the biggest credit-card distributor in Latin America, Credicard did a fantastic job. But the disassociation is a long-term process."

As it has around the world, but even more so in soccer-crazy Brazil, part of that success has been thanks to the "priceless" ad campaign during the 2002 World Cup. Even today, sponsoring the Brazilian national team is part of the company's overall communication strategy. The 1992 match was "our first major investment in marketing" says Rowan.

The same as in Mexico, and despite similarly low incomes, Brazil offers great growth potential for the personal credit industry. In Brazil, transactions per person average six per year--once every two months--compared to 84 a year in the United Kingdom.

Brazil's consumer market is 85 million people, of which 45 million have access to bank services, says Murilo Barbosa, marketing director for MasterCard in Brazil. Private consumption adds up to $70 billion annually, of which just 15% is paid for electronically. Brazil today has 135 million debit cards in circulation and 45 million credit cards. Barbosa says the growth of the industry has been spectacular.

The biggest growth area for the company today in Brazil has been debit cards. Currently, MasterCard has 61 million debit cards, called Maestro and Redeshop, in addition to 21 million credit cards. The debit-card business has grown an average of 55% a year, more than twice as fast as credit cards. This arm of the business got under way in 2002, when MasterCard bought Redeshop, causing its base of cardholders to jump to nearly 60 million cardholders from 25 million.

The banks, which are interested in decreasing the volume of checks they handle since the cost is so high, support the card business, says Rowan. As the volume of checks written has fallen--by 3.4% annually on average across the country--the number of debit and credit transactions has risen by 60% and 20%, respectively.