When we talk about e-commerce in Brazil, it is important to know that the payment methods are as important as the products and services that your company offer. The more payment possibilities your company has available, the greater the number of customers you can serve. This variety is important, above all, for virtual stores, which have no geographic limit for competition.
Currently, we have several online payment options for electronic stores in Brazil. In this article we will explain all the possibilities and the advantages of each one for your business and your customer.
Differently from other countries around the world, in Brazil we have a very strong culture of installments which means all your purchases can be divided up to 12 months in your credit card. According to surveys, 79% of consumers pay their purchases in installments.
Therefore, it is not news that the credit card operation is the most used option for purchases – either in physical stores or online.
According to SPC Brasil, there are, on average, 52 million credit card users, and of this total, almost half (47%) pay for purchases using this means of payment in installments at least once a month, mainly in the case of clothes (48%), footwear (44%) and home appliances (44%).
However, another data from the Central Bank of Brazil shows that 48 million Brazilians still do not have access to a credit card, opting for the famous installment plan (BNPL) or a bank slip, which is why it is so important to have this option always available in your store.
Through the payment gateway, installment fees and conditions can vary greatly depending on the receipt and installment periods.
2. “Boleto” (Bank Slip)
Another very common option for payments in Brazil is what we call “boleto”, also beloved by more conservative Brazilians or people who don´t have credit card.
Boleto is a printed document that can be paid at banks or lottery outlets (online as well). We also have payments via “boleto” with installments, so you can pay in the bank every month without compromising the limit of credit card.
However, this payment method can be a disadvantage for e-commerces due to the high volume of people who don´t pay, cancelling the purchase at the end. That is why many companies are replacing it for PIX – a new payment method.
Pix (Instant Payment) was launched by the Central Bank of Brazil in February 2020, and this modality guarantees transfers and payments within 10 (ten) seconds! This innovation was recently awarded at the Fintech & RegTech Global 2021 Awards.
According to Opinion Box´s research, 77% of people believe that PIX has changed the way they do payments in a daily basis. The reason why people like this method so much is the possibility of transferring money without paying any taxes.
For the stores is also an advantage since you receive the money at the same minute and you don´t have to pay taxes as it happens with credit card machines.
To boost this payment method, many stores are giving 5% discount when buying through PIX, almost the same % of tax they pay with the credit card machines.
Among those who still don´t use PIX, the main reasons are: 53% don´t find it trustable, 21% didn’t know about it, 15% don´t want another payment method.
4. Digital Wallets
Soon after comes digital wallets, which are nothing more than registering your card on a mobile device, which work with NFC and also create virtual cards, to reduce fraud and cloning attempts.
According to the same research, 71% of respondents believe that digital media will do away with paper money in the future. On the other hand, this form of payment is still the third most used in the country.
In this sense, research shows that we are heading towards a tomorrow with less and less physical money. But not completely without it.
In addition, in transport applications, cash appears as the second most used form of payment, with 24% preference. In meal apps, the scenario is similar and cash is used by 21% of respondents.
5. Payment Gateways
Last, but not least, comes local gateways that offer all payment methods.
Most local gateways offer all payment methods, and the ranking in Brazil is made up of:
The seventh position, PayPal, does not offer payment by debit card or bank slip, however, as it is a digital wallet, you can transact in other currencies, with local conversion, with an interest rate of 3 to 4.5% and fee service charge of 4.99%.
Another option, not yet available in Brazil, is Cash On Delivery (COD), where payment is made upon delivery of the product, and this option usually needs to be updated manually on the platform. Here in Brazil, some services have this option, but in e-commerce not yet.
At the same time, we have payment gateways in Brazil with funding in BRL (Brazilian real) and distribution in other currencies (USD=US dollar and EUR=euro). These gateways specialize in international electronic commerce, and some even offer split payments, separating and sending each value to a different destination, in different currencies (if necessary).
Here in Brazil it is not common to transact in other currencies, which is why locally you will find the modalities that serve the national market, also because this will affect taxes and costs for these types of operations, which would not be an advantage. For some options, we have the split option (informed above) and some means that work with this option, such as PayPal, Ebanx and others, but with limitations.
What is your strategy for your business here in Brazil?