Between July and October 2020, the number of people in El Salvador exploring mortgage options online increased by 18%, and the number of Costa Rican consumers looking to buy credit cards decreased by 60%.
CentralAmericaData's interactive platform Consumer Insights monitors in real time the changes in consumer habits in all markets in the region and in other Latin American countries, with fundamental information to understand their behavior, new trends and anticipate eventual changes in their purchase patterns.
In the last few months, interest in credit cards has been increasing in the digital environment, a rise that is mainly explained by the behavior of consumers in Panama, Honduras, El Salvador and Costa Rica.
Through a system monitoring changes in consumer interests and preferences in Central American countries in real time, developed by CentralAmericaData, it is possible to project short and long term demand trends for the different products, sectors and markets operating in the region.
Between May 2019 and the same month this year, the number of credit cards circulating in the Salvadoran market increased by 9.2%.
According to figures from the Observatory of Credit Cards (OTC), of the Consumer Defense Office, in May 2020 there were 876,197 credit cards circulating in El Salvador, which is more than the 801,822 registered in the same month of 2019.
In the countries of the region, more than 8 million people are looking for credit on the Internet. Of this group of consumers, approximately 9% explore options for taking out a student loan.
The interactive information system developed by CentralAmericaData monitors in real time the changes in consumer habits in all markets of the region, with fundamental information to understand the new commercial environment that has emerged in an accelerated manner.
At a regional level, nearly 16 million people are looking to purchase financial services online. Of this group of consumers, approximately 11% are exploring options for acquiring a credit card.
The interactive information system developed by CentralAmericaData, monitors in real time the changes in consumer habits in all markets of the region, with fundamental information to understand the new commercial environment that has emerged in an accelerated manner.
The coronavirus has left an economic impact in several countries. For this reason, some governments are developing exceptional measures to mitigate its effects. For example, the suspension of tax and mortgage payments to lessen the economic pressure on small businesses and households.
In the United States, interest rates were reduced to almost zero and a US$700 billion stimulus program was launched in a bid to protect its economy, says Mario Miranda, director of finance at MonederoSMART.
With the approval of the reforms to the Credit Card System Law, in El Salvador it will be banned to charge interest on surcharges generated by arrears.
The reforms also establish that banks must deliver free of charge settlements and cancellations of credit cards, physically or electronically, at the latest within 24 hours, while the documents of obligation or promissory notes that the debtor has signed must be returned within 5 business days maximum, informed the Legislative Assembly:
In the last year, the number of credit cards circulating in the country increased 6%, and it is estimated that every Salvadoran who has acquired some debt has on average two cards.
According to data from the Credit Card Observatory (OTC), between October 31st of last year and the same date in 2018, credit card subscriptions went up from 748,949 to 793,141, equivalent to a 5.9% increase.
Visa has announced it will begin in Guatemala the process of eliminating magnetic stripe cards and replacing them with ones that have chips.
Guatemalan financial institutions are working on building the infrastructure necessary to meet this new technology, said the executive director of Visa Central America, Roger Sanchez. The delivery of the first chip card is scheduled for early next year.
From May 30, the technical rules on credit cards issued by the non-banking commercial sector will be in effect in El Salvador.
A statement from the Ministry of Economy reads:
The Minister of Economy, Armando Flores signed for publication in the Official Journal, this May 29, standards for credit cards, which allow development of the application of the provisions of the Law on Credit Cards, in a more effective and efficient form, favoring cardholders from the nonbank trade sector.
Proposals are being put forward in the Legislative Assembly of El Salvador to limit interest rates on credit cards via a usury law.
Representantives from the official FMLN party and the Gana party have dusted off the Credit Card System Law, proposing to amend Article 19 in order to lower interest rates, which according to them, remain very high for users, reported ElSalvador.com.
The Superintendency of Competition has presented a study on conditions of competition in the sector of credit and debit cards.
In El Salvador, credit and debit cards are becoming increasingly important as a means of payment, and in the case of credit have become one of the largest sources of consumer loans. The sector's growth has been such that its proper functioning has become systemically important.
The Financial Committee of the Legislative Assembly in El Salvador has began to study a bill which will apply to "all financing operations related to the procurement of goods and services."
The item will be incorporated into the usury bill, that will be analyzed in Congress .
If the law is passed, interest charged by financial institutions for loans made through credit cards will be regulated by law.
New technologies will be the basis for changes affecting users of financial services in the future.
Accessing your account from Facebook and financing being offered at the time you buy a product are some of the innovations that we could be seeing in the coming years in the banking industry.
This is one of the conclusions from research conducted by experts in technology and financial services applications, which include, among other things, the ability to soon be able to sign agreements using just a smartphone.
Salvadoran President Mauricio Funes commented over the decree approved by 853 representatives which amends the Law on the Credit Card System.
A press release from the Presidency of the Republic of El Salvador reads:
The observations are essentially based on three considerations:
1. The Presidency shares the spirit of the legislators in their initiative to limit interest rates, in many cases charged by loan sharks, in the financial system that applies to credit card users and which has as its principal the intention to protect consumers.