February 4, 2010
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News: US Bancorp Captures Mexico Market
In the search for new markets and ways to generate more revenue to make up for enormously high credit card defaults, U.S. banks have expanded target markets. Elavon, U.S. Bancorp's (USB) debit and credit card payment processing subsidiary has formed a partnership with Banco Santander SA (STD). The agreement expands Elavon's territory into Mexican boarders. Banco Santander SA is a global banking network is one of the largest banks in the world (in terms of market capitalization), which originated in Santander, Spain and controls the fourth largest banks in Mexico. Elavon's Chief Executive Officer (CEO), Stuart C. Harvey said the alliance allows Elavon to expand their global presence in the Latin American market as part of their strategic growth plan. Elavon will provide debit and credit card processing, electronic check services, gift cards, and cross-border acquiring for the bank's existing and future clients.
The new alliance expands on an already existing relationship between the credit card processing company and STD. Mexico will now be added to existing territories of the U.S., Britain, and Puerto Rico. Mexico is said to be the bank's fastest growing credit card market as the Mexican financial industry has spent millions o dollars over the past few years installing thousands of payment terminals and automatic teller machines throughout the country. The Bank of Mexico counts the number of card payment terminals installed at 441,107 in the third quarter of 2009, up from 117,787 in the first quarter of 2002.
Mexico has focused on the growth of another valuable commodity, credit card distribution. During the same time period that the country was expanding payment processing equipment, the number of cards placed into circulation nearly tripled to 22.3 million credit and62.5 million debit cards. The recession has taken its toll on card distribution over the past 18 months new card accounts have decreased significantly. However, Mexican banks expect that all to change as consumer lending and the economy begins its recovery during 2010.