Before rushing to translate your website into Portuguese, or scouting for office space in Sao Paulo, it is worth taking the time to consider how your potential Brazilian customers might like to pay for your goods or services. Card use in Brazil is relatively high and Brazilians rarely pay for anything outright. Most online transactions are paid in installments. Cash-based methods such as Boleto Bancário are popular too and will give businesses access to Brazilians without credit cards.
Popular Brazilian Online Payment Methods
Population in Brazil: 202 Million
Internet Penetration: 53%
Smartphone Penetration: 26%
Purchasing Power Index: 38
Credit Cards–Market Share: 69%
As one of the most common & popular ways for consumers to make purchases online, credit cards are used in 69%. Multinational financial corporations like Visa, MasterCard, Maestro, American Express and Discover process payments between merchants and card-issuing banks, enabling millions of users around the world to make purchases using branded credit cards. However, it is important to differentiate between national and international credit cards. National cards can only process in Brazilian Real (BRL), whereas international credit cards can process in both foreign and local currencies. But, as only 20% of Brazilian buyers have access to international credit cards, it is key for merchants to have access to local credit cards.
Boleto Bancario–Market Share: 24%
Boleto Bancario is a popular online Brazilian payment method that is virtually fraud-proof. It allows all the customers to pay online or offline. They can pay in cash, via mobile, or through online banking by using a barcode/voucher. There is a zero chargeback risk with this payment method in Brazil. Customers who pay online with Boleto Bancario fill out an online form with their personal information and receive a printable barcode/voucher, which they may then take into a local bank or convenience store to settle using cash or any other payment option accepted there.
Hipercard is a local credit card accepted in Brazil. There are 13 million cards issued. Hipercard represents 8% of the total credit card market share.
E-wallet service in Brazil is similar to what it provides in other countries. Both PayPal and MercadoPago allow users to store, or add money to their “virtual wallet”.
MercadoPago is an online payment platform that makes it easy to send and receive online payments in Brazil. MercadoPago supports a variety of payment methods, including popular local credit and prepaid cards.
PagSeguro is a popular Brazilian online payment option that allows merchants to accept payments with credit cards and online bank transfers. It is a secure way for customers to pay with both locally and internationally issued credit cards in Brazil.
E-financing is available at some banks, like Itaú, Bradesco, and Banco do Brasil. It is not as commonly used, since the bank requires the customer to have a pre-approved credit with the bank before the transaction.
Bank Transfers are an effective way to make payments in Brazil. Users simply transfer funds online directly from one account to another or make transfers at local Brazilian bank branches such as Banco do Brasil, Itau, Bradesco, Banrisul and HSBC.
Prepaid Cards are cards with limit normally used for payment of specific services (telephone and public means of transportation issued by public service concessionaires and meal cards which are authorized commercial establishments).
For international merchants looking to gain a foothold in the Brazilian market, it is advised to keep the following key points in mind:
An overwhelming majority of Brazilian consumers use credit cards, but due to currency controls and bank restrictions, the bulk of these can only be used in the local currency. Therefore, international merchants are advised to process payments locally.
Boleto Bancario is a local payments method that accounts for around 24% of online transactions, making it a must-have payment option for international merchants serious about reaching a mass audience in the market.
Due in part to local payment preferences such as paying by installments and using local methods such as Hipercard, PagSeguro has been slow on the uptake, compared to other emerging markets. However this is changing, and mobile is rapidly becoming a key sales channel in Brazil.