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A closer look at payments in Brazil: Cracking the Coconut

Brazil’s status as one of the world’s most vibrant tiger economies is well known, but its hosting of a certain international football tournament this summer has further highlighted the region as being ripe with market opportunity. With the world’s eyes on the country, merchants looking to gain a foothold in Latin America have realised the potential offered by the local economy and assessed ways to establish a domestic presence. 

To put this into context, in 2013 Brazil represented 61% of the Latin American e-commerce market, and the payments sector experienced a startling 28% growth. Ecommerce sales are expected to grow by another 20% this year according to eMarketer. With a population of approximately 200 million – amongst which there are 107 million Internet users and a relatively nascent 60 million online shoppers – the country is set to welcome many more international businesses and entrepreneurs wanting to build a strong and lasting presence.

But what are the important considerations for the market?

Firstly, the mobile channel.  With estimates suggesting that by 2017 almost all Internet users in Brazil will be accessing the Internet with a mobile device, it is essential for merchants to support, and optimise, their mobile channels to capitalise on market potential.

Secondly, it’s important to consider the ways and means of paying.  In a world where payment methods and technologies are rapidly evolving and differing from country-to-country, merchants considering a foray into foreign markets must cater to the needs of each region. By taking into account the most popular payment solutions in a specific territory, businesses can offer a tailored selection of payment methods which customers are culturally more inclined to use, thus maximising transaction conversion rates.

So how do Brazilians transact online?

Although credit/debit card transactions are accepted across Brazil and used by the overwhelming majority of Brazilian consumers, merchants must take into account that 70% of consumers in Brazil own domestic cards that are not suitable for cross border payments, only local transactions.

Additionally, payments by instalments are very common and widespread throughout large parts of the population: 80% of all e-commerce payments are made in instalments and they are usually free from interest to the buyer.  The quantity of instalments typically varies between three and 12.

The third most accepted payment method is “Boleto Bancario”, which is normally referred to as Boleto. This payment option – which could be compared to a promissory note in the UK – is regulated by the Brazilian Federation of Banks and represents about 15% of all payments in this country. A Boleto can be paid at ATMs, branch facilities and the internet banking sites of any Bank, Post Office, Lottery Agent and some supermarkets until its due date. Boleto payments cannot be disputed or reversed by the consumer and is therefore considered a low-risk payment. Boleto is an absolute ‘must-have’ payment option for any serious merchant operating in the Brazilian market.

The mix of payment methods, burgeoning mobile market and rapidly growing economy clearly makes Brazil an enticing prospect for merchants.

Right now, Rio de Janeiro is getting ready once again to welcome millions of people from all over the world to celebrate another great sporting event. This global event offers international merchants another chance to generate revenues. 

It’s all to play for! 



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