translated from Spanish: Payment in Chile: in search of more competition

The portfolio of Finance recently announced a proposed amendment to the current payments system in Chile.  It seeks to provide more competition and transparency to the market of means of payment, putting an end to the monopoly of Transbank, and passing the current 3 agents, a model of 4 parts is more in keeping with the level of developed countries.
How does payment in Chile market?; and what is the proposal?   The three parties of the current system are: issuer (Bank);  purchaser (company responsible for affiliate merchants to the payment network card and make such payments processing, which is what hoya makes almost exclusive Transbank); and trade.   The bank charge a fee for the transaction (“merchant discount”) total trade through Transbank. Transbank on the other hand, the Bank charged a fixed fee for the service, which depends on the volume of transactions; and also it takes to trade a Commission according to the category and volume of sales.
The problem is that for nearly 20 years, the only company operating in Chile in the role of acquirer was Transbank, i.e., there was no alternative for banks or trade; Transbank is also owned by several banks, among the biggest property are banco Santander and banco de Chile.  The lack of competition in this market, and the need to open it up to other players already had been warned and recommended by the Court of the free competition (TDLC) to the Ministry of finance in 2018.  The TDLC also recommended that card (Visa brands; MasterCard, etc.) they had to pay a fee (“rate of Exchange”) issuers.  In this line, the banco Santander, last year put term contract maintained with Transbank (merchant acquiring contract) to manage your cards, opening the stage model of 4 parts.
The proposal of 4 parts considered a: all purchasers; issuers (banks); card brands of debit and credit (Visa, Mastercard, American Express, etc.); and trade.  I.e., he joined card brands as new player, with which the buyer loses the ability which had set prices to issuers and trading. One of the new players to join as buyer since last year is Multicaja.
The idea is to enter new actors, so traders have alternatives to choose the buyer company that wish to operate, which would generate more competition. While this new model should bring positive effects to the payments market, poses some significant challenges that have to do with proper regulation of the actors and the correct setting of interchange and merchant discount rates.
On this last point, Treasury said initially that it shall not set interchange fees and that the market should be responsible for this task, however, there are doubts in relation to the evolution of tariffs, since they must be fixed by the own brands of t arjetas of debit and credit, which does not ensure per is that prices fall significantly in comparison to what today exist (at least in the short term), although it will depend on the number of new actors who decide to enter the market, the rivalry that is generated , and new forms of payment that arise (for example cell phone payments).

Original source in Spanish