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Scotiabank Chile considers creating own merchant acquisition business

Scotiabank Chile is evaluating the possibility of creating its own merchant acquisition business, La Tercera reported, citing Stephen Guthrie, the bank's senior vice president of wholesale banking.

However, Guthrie said the plan has no specific timeline and that the bank is not compelled to make a decision about the matter.

The bank is the latest to express interest in a sole venture into the payment processing market following the Chilean government's plan to revamp Transbank SA's organizational structure. Owned by several banks, including Scotiabank Chile, the payment processor has been accused of monopolizing the market and abusing its dominant position.

The government plans to install a four-part model in the payments system, under which a separation will be created between card issuers and the payment processing companies in transactions involving card users and merchants.

Following the government's announcement, Banco Santander Chile, Banco del Estado de Chile and Banco de Credito e Inversiones SA all revealed that they are working on separate ventures into the acquiring market.

"We have not decided yet if we are going to opt for a strategy like the one chosen by other banks, but we are happy with our position in Transbank," Guthrie said.

Scotiabank Chile's parent, Bank of Nova Scotia, operates its own acquiring network called Scotia POS, which could be the basis of a similar Chilean operation.