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- Business Case -

Understanding Online Payments in Brazil

Brazil rules e-Commerce market in Latin America cards. National cards account for more than 90% of
the financial volume of credit cards, and can only be
One of the top 10 biggest economies in the world, Brazil continues to be the major e-commerce mar- processed in Brazilian Real (BRL). International credit
ket in Latin American. Currently, 45% of the regions cards can process in both foreign and local currency,
Brazil is the most relevant and mature e-com-
e-commerce sales originates in Brazil. The country is but only 20% of Brazilian buyers have access to them.
merce market in Latin America with over 40% of expected to generate $45 billion US out the regions Authorization rates on e-Commerce transactions in
the regions online market. Service providers who $117 billion US business-to-consumer (B2C) e-com- foreign currencies are usually less than 10%, com-

tailor business solutions for complex local markets merce sales by the end of 2018. pared to over 80% for local transactions.

are key partners for international digital buyers

Brazil accounts for around 40% of the 348 million in- Cielo (previously VisaNet) and Rede (previously Rede-
wishing to do business in the region. ternet users in Latin America and is the fifth largest card), which used to process transactions exclusively
digital market in the world. Internet users in Brazil on behalf of Visa and MasterCard respectively, dom-
spent 38% more time online than in the rest of Latin inate the Brazilian merchant acquiring market with
America. 51% and 38% of the credit card payments billed vol-
umes respectively.
76% of Brazilian adults possess a payment card and,
1. e-Commerce Sales in Brazil, 2014 - 2018 according to Abecs (Brazilian Association of Credit New acquirers, such as GetNet (owned by Bank
(billion USD) Cards and Service Companies), remote purchases Santander), Stone (who acquired Elavon in 2016),
with credit cards grow twice as fast as the cards sec- First Data, and Global Payments are now entering
tor, accounting for more than 20% of the total credit the market and forcing improvements in processing
card expenditure. This creates an ideal opportunity charges and technology.
for international companies to enter this market.
Although credit cards are still the preferred payment
37 Online success requires local payment options method, Boleto Bancrio, a payment slip issued
33 through the banks, is the main alternative payment
28 Cards and Boleto Bancrio dominate online pay- method for customers who buy online. Boleto works
ments in Brazil, which together account for more like a cash payment, allowing customers without
than 85% of all online purchases in Brazil. credit cards or who are unable to use a credit card
to buy online. Four out of 10 customers that are un-
Credit cards are the primary payment method for banked have completed online purchases using this
2014 2015 2016 2017 2018
69% of Brazilians. However, it is important to differ- payment method.
source: eMarketer entiate between national and international credit

Understanding Online Payments in Brazil: A Business Case by allpago

This payment method accounts, for around 24% of
the total e-commerce market and up to 37% of all Recommendations
2. Online Payment Methods Share in Brazil, 2016
online purchases and in industries with higher tick- for operating locally in Brazil
et sizes. As Boleto targets an entirely new portion of
the market, this payment method doesnt cannibal- Brazil is a complex business environment with many
ize credit card payments. Almost all B2B payments in risks and challenges. For the ease of doing business
24% Brazil are made this way because it allows companies and managing tax obligations, it is ranked 116th and
48% to avoid costly wire transfer fees. 178th (out of 189 countries) by the World Bank. It
also presents a great opportunity to businesses will-
Credit Cards
As Boleto and national credit cards can only be pro- ing to accept the challenge.
21% cessed in BRL, it is crucial that international mer-
International chants offer their products and services in the local
The challenges of operating outside of the country
Credit Cards currency.
include the high administrative costs due to the lo-
cal legal requirements and the onerous tax system.
source: allpago Research More than any other market in Latin America, inter-
Tighter regulation promotes
excellence in Brazilian payment industry national merchants working in Brazil need a reliable
partner with local knowledge to avoid costly legal or

3. Market Share per Acquiring Bank in Brazil, 2014 The Brazilian government started to define a legal financial issues.
and regulatory payment framework several years
ago. The implementation of MP 615/13 and Law Brazil has a unique payment profile, and an under-
12.865/13 have defined how the Central Bank of Bra- standing of local and non-cash payment methods is
Cielo 51%
zil handles transaction authorization, operation, gov- crucial for successful e-commerce. Merchants need
ernance and payment service provision for all of the to understand the unique buying behaviour of Bra-
payment institutions in the country. Decisions taken zilians and adapt their payments options and ap-
Rede 38% by the Central Bank are opening the market to new
proach to the market accordingly.
players and leading to increased competition.

As payment methods evolve and the Brazilian con-

Getnet 7% sumer takes advantage of new technologies, expect
the regulators to continue to implement new laws
and tighter regulations.
0% 10% 20% 30% 40% 50% 60%
source: Lafferty

Understanding Online Payments in Brazil: A Business Case by allpago

Gabriel Barros
Country Manager Brazil If you want to improve your payments in LATAM
Gabriel Barros is Country Manager Brazil of allpago, the new
way of accepting payments in Latin America. Before joining
allpago, he worked as CFO and Strategic Planning and Busi-
ness Development Manager for Freeddom, and managed
the merchandising budget for service providing companies
throughout Brazil for Procter & Gamble

Gabriel studied at Fundacao Getulio Vargas, in Brazil, and is

fluent in Portuguese, Spanish and English.

Understanding Online Payments in Brazil: A Business Case by allpago

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