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2Positive Macroeconomic Scenario
Favorable economic conditions for the development of Cards industry
GDP (yoy growth %)
Inflation under control
Unemployment Rate (%)
Lula 2Lula 1FHC 2FHC 1
Investment
Grade
11.5
9.8 10.09.3
7.9 8.17.4
2004 2005 2006 2007 2008 2009 2010 (e)
4.9%4.3%5.9%4.5%3.1%
5.7%7.6%9.3%12.5%
7.7%6.0%8.9%
1.7%5.2%
9.6%22.5%
916.4%
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Source: IBGE
Source: IPCA-IBGE & Central Bank of Brazil Consensus
Source: IBGE
3
Brazil shows low “bancarization” compared to developed countries
Loans & Corporate Bonds/GDP – Private sector
“Bancarization” and Low Card Penetration
EUA
Reino Unido
Brasil
França
México
Source: Central Bank of Brazil
2.14 1.97 1.841.62 1.45 1.37
0.660.91
1.141.43
1.702.10
1.08 1.251.50
1.812.16
2.48
2003 2004 2005 2006 2007 2008
Check Debit Cards Credit Cards
Increased use of credit cards as means of payment
Source: Central Bank of Brazil
22%39% 50%
89%111%
210%
Mexico Russia Brazil Chile China USA
4
47%43%
34%
Canada United Kingdom USA
12.4% 14.0% 15.8% 17.1% 19.1% 21.4%
2003 2004 2005 2006 2007 2008
Higher utilization of cards in private consumption
The Brazilian Cards Industry Outlook
Source : Abecs e IBGE
...but below developed countries
Source: ABECS, Bank of International Settlements,(2007) United Nations, IBGE
2X
5
104 124 136 153201 217 233 249
147173 196 225
453514
565628
2007 2008 2009 2010 (e)
93 98 100 104
48 51 53 5553 52 52 5168 71 73 75
2007 2008 2009 2010 (e)
Source: ABECS (Associação Brasileira das Empresas de Cartões de Crédito e Serviços)
Card penetration, average ticket and transactions
per card are low in Brazil
Number of cards (Millions)
Turnover (R$ Billions) Average Ticket (R$ per transaction)
174215
256309
83 107 129 158
45 53 60 68
302375
444
535
2007 2008 2009 2010 (e)
Credit Debit Private Label Total
The Brazilian Cards Industry Outlook
Credit Debit Private Label Total Credit Debit Private Label Total
~ 15 million credit cards / year
CAGR: 21% CAGR: 4%
6Participants of Cards Industry
Issuers
Merchants
Captures and
processes transactions
Issues credit and
debit cards
Use credit and debit
cards
Clients
Acquirers
Sets rules for
issuers and
acquirers
Card Brands
7
Santander
Santander + Acquiring Partners
Colombia
Argentina
Sovereign
Puerto RicoUK
Totta
Spain
Portugal
Mexico
Santander’s Experience in Other Countries
8
FINANCIAL SERVICES + ACQUIRING - packaged in a suitable value
offer to corporate clients
New Model: Santander (Acquiring + Financial Services)
Acq
uir
ers
Innovative value offer
Products and Services + Acquiring +
Other POS Capturing Services
Banks
ACQUIRER
SERVICESFINANCIAL
SERVICES
9
Brand
MASTERCARD
License
Integrated value offer
– Acquiring and Banking
Business
Commercial Model –
Distribution/Pricing
Communication and
Media
Investment in
Capturing Network and
Processing Platform
Other POS Capturing
Services
165 POS (Capturing
Terminals - 2009)
Partnership
Partnership Santander & GetNet
Creation of a Partnership leveraged by GetNet’s
technological expertise and POS network
“Time To Market”
10
Technological Platform for capturing,
authorizing and the processing of
transactions
165 thousand POS
Services at Capturing Terminals:
- Mobile Recharge
- “Vale Transporte” (transportation ticket)
Recharge
- “PAT Alimentação e Refeição” (meal ticket)
- “Cartão Convênio” / Private Label / Cobrand
GETNET TECNOLOGIA
Campo Bom – RS
CORREA DA SILVA GROUP
Domestic Capital
N&SP – Network and Service Provider
Customized solutions for capturing, authorization and processing of
transactions and information
Main Clients: Goodcard, Banco BNG, Serasa, Microsoft, Base Card, Wal-
Mart, Brasil Telecom, Claro, Tim, Vivo, Telefonica, Oi, Embratel, CTBC,
Amazonia Celular, Banco Matone, etc.
Over 800 employees
Annual turnover of R$ 2,29 Bn (2009)
GetNet Tecnologia
Entrance in the Acquirer industry through a technological
partner - GetNet Tecnologia
11Santander as Issuer and Acquirer
Issuer
Merchant
Issues credit and
debit cards
Uses credit and
debit cards
Clients
Acquirers
Sets rules for
issuers and
acquirers
Captures and processes
transactions
Card Brand
12
SECUNDARY BENEFITS:
Competitive rates for prepayment of
receivables
Prepayment of receivables through
POS (pioneer in the market)
Call center support to merchants
24hours / 7 days
Mobile Recharge
SERASA / RECHEQUE* consultancy
Regional cards capture
A “Win-win” Relationship: the bank recognizes the
financial volume of the client in transactions made with
MASTERCARD brand credit card:
Reduction of up to 100% of checking
account fee for financial transaction volume over R$ 3
thousand/month in each POS
5 days without interest rate charge
by using overdraft
Guarateed Account or Working Capital
limits based on financial transaction volume multiples
negotiated in the POS
Corporate current account with integrated bank domicile
POS connection using both dial-up and/or broadband.
Santander Conta Integrada: Innovative value propose
Santander (Acquiring + Financial Services) & Getnet = Capillarity
Synergy and corporate client base + technological knowledge
* Credit Bureau
13Santander Conta Integrada: products offering engine for companies
Besides seizing the value of a high
profitability business, it also provides:
Higher transaction financial volume from
corporate clients.
Loan portfolio growth mitigating the risks.
Increase of corporate client base and
improvement of the competitive market position.
Improvement on the relationship with
corporate customers and, consequently, increase
of number of products and services per client.
Be the first bank of our corporate client.
14Goals 2012
GOALS FOR 2012
150,000 new current accounts originated via the acquiring business
300,000 new affiliated merchants
~ R$ 5 billions in loans
10% of market share in the financial transaction volume of the cards
15Conclusion
Santander is the pioneer in launching this acquiring model in
Brazil
The partnership provides the bank access to a network of more
than 160,000 merchants and to GetNet’s know how
The credit card industry is expected to grow around ~20% p.y.
and double its size in 4 years
This strategy focuses on strengthening the relationship with
SME clients – main competitors are banks
Santander Conta Integrada – “Win-Win” relationship between
the bank and small and middle market companies (SMEs)
Investor Relations
Avenida Juscelino Kubitschek, 2,235, 10th floor
São Paulo | SP | Brazil | 04543-011
Tel. (55 11) 3553-3300
e-mail: [email protected]