Latin American Governments Attracted To Debit Programs

The growing popularity of debit cards in Latin America has encouraged more governments to use the cards to track spending and disburse welfare benefits, according to speakers this week at Terrapinn's Cards & Payments Latin America conference in Miami. Some 166 municipalities in the Brazilian state of São Paulo participate in a program that enables government workers to use cards for official spending, said Milton Luiz de Melo Santos, CEO of Brazil's Banco Nossa Caixa, the state-owned bank that issues the cards. The bank has issued about 48,500 of the prepaid debit cards, called Compra Electronica, he said. The cards carry MasterCard Worldwide's Maestro brand and have a spending limit of about US$5,000 (3,400 euros). Average transactions stand at about $1,023. The bank also issues cards that pay benefits to young citizens and poor families, he added. Debit cards, with their spending limits, represent the "perfect mechanism" for disbursement of government funds, said Carlos Pittier, Visa Inc.'s business leader, prepaid products, for the Latin America and Caribbean region. Visa offers a card in Brazil that enables workers to buy company-subsidized meals, he said.