SAO PAULO Jan 29 Cielo SA, Brazil's
largest card payment processor, expects transaction volumes in
the local market to outpace the company's own growth this year,
Chief Executive Officer Rômulo Dias said on Wednesday, adding
that a potential decline in merchant discount rates could occur.
Brazil's $400 billion-a-year market for card payment
transactions is likely to grow between 16 percent and 18 percent
in 2014, Dias said, adding that he expects Cielo's transaction
volume flows to grow less than that. Merchant discount rates,
which Cielo and rivals charge retailers to settle card
transactions, could fall after remaining stable last year, he
Dias' remarks highlight the risk of heightening competition
and a weak business environment in 2014, despite major events
such as soccer's World Cup in June. Cielo missed estimates on
Tuesday due to a surge in marketing and sales expenses.
"Four days of what amounts to holidays due to Brazil
(national team) World Cup games could have a negative effect
worse than the impact of foreigners coming to the country," he
said in a conference call with analysts to discuss
Cielo will likely see faster growth in the first half of
2014 and a slow-down in the final six months, Dias added.
Cielo sees its marketing expenses up about 4 percent in
2014, Dias said, with the company facing greater competition
from rivals Santander Brasil SA and Redecard, owned
by lender Itau Unibanco Holding SA.
At 12:34 p.m. (1434 GMT) shares of Cielo were down 1.76
percent to 62.00 reais.