Although cash remains the main means of payment, the use of debit, credit and prepaid cards, and to a lesser extent other tools such as mobile wallets and electronic money, is gaining ground in the Nicaraguan economy. Debit cards were the most used device in the fourth quarter of 2023. Of the 56.6 million actions performed with the various devices offered, half, 28.9 million, were performed with cards of this type. This is despite the fact that the sector finished the year with approximately 60 thousand fewer debit cards than in 2022.
The Payment Systems and Services Report for the fourth quarter of 2023, published this week by the Central Bank of Nicaragua (BCN), reports that at the end of that period, 2.7 million active and current payment cards were registered, including 2.04 . million debit cards, representing 74.6 percent of the total; 615,191 credits, equivalent to 22.4 percent of the total; and 83,072 prepaid, representing 3 percent of the total.
According to the BCN report, 2.7 million plastics were active and effective at the end of 2023, representing an increase of 0.9 percent compared to the same period last year. However, the Payment Systems and Services Report for the fourth quarter of 2022 said the number of active and circulated cards totaled 2.8 million at the end of the fourth quarter.
Of that amount, more than 2.1 million were linked to debit cards; 532,207 credit cards; and 106,152 prepaid cards. It should be noted that these figures from the 2022 report do not match the 2023 report, which understates this year’s figures compared to the same period.
About 60 thousand debit cards less
This implies that of the 2.10 million debit cards that were reported active and valid at the end of 2022, about 145 thousand were deactivated during the last year or their validity expired and were not renewed, but new The final balance with the issuance of the card is about 60 thousand less. The cuts coincide with the closure of thousands of positions at companies operating under the free trade zone regime and other sectors that use it as a means of payment to pay their employees.
The only bank to lose debit cards last year was Lafeez, it closed 2022 with 975,220 and closed last year with 830,176, or 145,044 less. It is the institution that controls the largest number of active debit cards; And this shortfall was partially offset by the issuance of new debit cards by Banpro, BAC, BDF, FICOHSA, Avanaz and even Honduras Atlántida, which entered the debit card business with the issuance of 20 cards last year.
Meanwhile, more than 110,000 new credit cards were activated or issued last year. At the end of the fourth quarter of 2022, there were 505,265 active credit cards reported and 615,191 at the end of the same period last year. The entity with the most issuance was Banpro, which increased from 163,200 in the fourth quarter of 2022 to 223,024 in the same period last year. In general all banks issued new cards.
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Most used debit cards
On the other hand, around 27,779 prepaid cards issued by Laffiz and Cashpak alone were discontinued last year. At the end of the fourth quarter of 2022, BCN reported that 110,871 cards of this type were valid and active; But only 83,072 were active and operational at the end of the same period last year.
Despite approximately 60 thousand debit cards going out of circulation in the fourth quarter of 2023, they were the most commonly used payment instrument. In general, payment instruments were used 56.6 million operations that totaled 1.2 billion cordobas, These include check payments, payment cards, electronic transfers (interbank and intrabank), and electronic money transactions.
According to BCN, the use of these payment instruments saw a 39.9 percent year-on-year increase in the value of transactions and 24.2 percent in the number of transactions. The most commonly used payment instrument remained debit cards, through which 28.9 million transactions, an amount that represents an increase of 9.2 percent compared to the same period last year. Moreover, this amount is equivalent to half of the total transactions made with this type of instruments, as reported by BCN.
Payment channels are used more
In addition to debit, credit and prepaid cards, other payment instruments that were active at the end of the fourth quarter of last year; 323,095 electronic money accounts, an amount representing a 12.7 percent decrease from the previous year; and 536,829 registered digital wallets, down 0.6 percent compared to Q4 2022.
till 56.6 million transactions were made with payment instruments during the fourth quarter of last year, bringing the total to 70.6 million transactions made through payment channel Face-to-face, non-face-to-face and takeovers are offered by banks and the rest of the financial technology providers of payment services (PSPs).
“The value of these payments was 1.3 billion cordobas, representing an increase of 30.3 percent year-on-year. “Payments in face-to-face payment channels are dominant in terms of volume, while payments made in non-face-to-face payment channels are more representative in terms of value,” the BCN report explains.
other transaction mechanisms
The report also states that “through payment channels.” Self 28.6 million operations were carried out at a value of 227,466.8 million cordobas. These included operations through branches and counters, non-banking correspondents, service agencies and ATMs.
According to BCN, the use of these payment channels saw a year-on-year increase of 18.4 percent in the value of transactions and 15.2 percent in the number of operations. They attribute this to the increase in availability of these payment channels: 817 new establishments that serve as non-banking correspondents, and 97 more ATMs compared to the fourth quarter of 2022.
Meanwhile, through non-face-to-face payment channels, payments were made in the fourth quarter of last year, 15.9 million operations of 1.1 billion cordobasS. This segment includes transactions through telepayments, electronic banking and payment chatbots.
And from acquisition channels, they became 26.1 million operations worth 28,797.2 million cordobas, This group includes transactions done through POS, mPOS, Pinpad, automated debit processing and online payment gateways. According to BCN, the value of businesses using these channels increased by 19.3 percent and the number of operations increased by 43.8 percent year-on-year. They attribute this expansion to the increase in devices used for card payments. At the end of last year, 7,855 POS, 501 mPOS and 162 additional billing systems integrations were active.
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