WorldCity Business Magazine

Q&A with Eduardo Eraña

by Mary Dempsey

How would you like to run a business that routinely (hohum) grows at a minimum of 20 percent per year? Well, if you are in the credit card business in Latin America, an industry still in its infancy, you would know what that feels like. (All we, lesser mortals, can do is look on in envy.)

Visa, the leading credit card brand in the region, just posted its first quarter results which show the same heady growth as in previous quarters total number of cards up 21 percent year on year to 184 million, total transactions up 19 percent to 4.3 billion and total sales volume up 23 percent.

WorldCity caught up with Eduardo Erana, president of Visa International’s Latin America and Caribbean division, just before the first quarter results were posted to walk through the 2004 numbers, which were equally impressive, with sales volume up 24 percent.

How do you explain the explosive growth?

More stability in the economies of Latin America. As a result, the use of credit and debit cards is growing every day. There’s also a higher banking penetration in Latin America and Visa plays a very important part in that.

**Where did you see the strongest growth?

Brazil and Mexico are behind this growth. Brazil is growing fastest in Latin America. (Total sales volume was up by 39 percent in 2004.) But Central America is also an important factor.

**What Visa products are benefiting most from this growth?

All the corporate products, products that facilitate control and transparency, speed of payment both for corporations and for governments. Another growth segment is our debit cards (Visa debit and Visa Electron), which grew by 39 percent (in 2004).

**To what degree will efforts in countries like Colombia and the Dominican Republic to get retail outlets and consumers to use credit cards as a way to reduce tax evasion help boost Visa’s business in Latin America?

These types of programs help boost transparency in business in a significant way. Mexico also has a successful program, and Argentina, too. I believe, without doubt, that these programs help all sectors of the economy.

**How has Visa’s new logo and the new design of the cards been received in Latin America?

The implementation will start in the second semester and be gradual. This is more than just cosmetic change. We have added layers of security in terms of the hologram and the magnetic band on the back of the card.

**What’s the outlook for Visa in Latin America for the remainder of this year?

We’re very optimistic, because of continued economic stability and recovery. We’ve seen a very good trend. We’re gaining share from cash, which is our true competitor.

**What product segments do you expect will experience the strongest growth?

Credit is the most mature, so without doubt the products that will continue to grow fastest are debit and commercial products. We are also seeing strong growth in technology and Internet.

**What’s the key ingredient for your Internet business?

When it comes to electronic transactions, security is the most important topic. And we offer security. We’ve made a lot of progress as a result of our “Verified by Visa” product. Our role is to be able to guarantee security to the buyer and to the merchants.

**Which countries do you expect to post the strongest growth?

We continue to see a good rhythm in Brazil and Mexico. Argentina is seeing good growth, too. But the rest of the region is also growing.