EBANX has reached a commitment term with the Central Bank of Brazil
Public document released by the Central Bank describes measures to be taken by the company in order to disproof malpractices
Latin America's largest economy and most developed e-commerce market, Brazil holds a huge potential for merchants wishing to go international. While the political and economic climate was in the past years rather uncertain, the Brazilian market is booming.
Despite a relatively low internet usage, Brazil makes up 60% of all online purchases in South America. A high population and technological advancements are pushing e-commerce to further grow each year, at an expected compounded growth rate of 6% until 2022. M-commerce is expected to grow strongly in the following years. In 2017, Brazilians spent 116$ US per capita online and 3,746$ US per capita at point of sale locations.
Smartphones penetration, currently at 48%, is growing steadily. The introduction of affordable smartphones has helped give low- and middle-class Brazilians access to the Internet. Therefore, merchants should optimize their website for mobile use.
With a median age of 31.6 years, Brazil's population is young. Digital and social media communications are widely popular. Next to the Philipines, the are the second country spending the most time online, in hours/day per capita.
At point of sale locations, Brazilian prefer to pay cash, with 52% of POS transaction settle this way in 2017. However, credit (26%) and debit cards (18%) are also popular.
A large part of internet transactions in Brazil are made with cards, 60% through credit cards, 1% through prepaid cards. Cross-border payments are still only available through a limited number of card providers. In fact, only 20% of Brazilian credit cards are enabled for international use. 15% of transactions are made through PostPay. Boleto Bancário, which also supports offline payments, is a very popular method of payment in Brazil and will grow even further with the emergence of m-commerce.
Other popular payment methods in Brazil are the "co-branded cards". These can be used in department stores (e.g. C & A, Renner, Marisa and Pernambucanas), or supermarkets, such as Carrefour or Extra. In addition, Brazilian consumers use Direct Debit, E-financing, e-Wallets (in particular PayPal and MercadoPago) and prepaid cards. Mobile wallets were used to pay for 13% of all Brazilian e-commerce transactions in 2017, and for 3% of all point of sale transactions.
Merchants wishing to appeal to Brazilian customers should consider offering installment plans, as these are preferred by most consumers. Last year, over half of Brazilian e-commerce sales were settle through installments.
The Brazilian e-commerce market is one of the 10th largest in the world. In Latin America, Brazil is the biggest online market, a place it should retain in the coming years.
Internation e-commerce merchants might find the Brazilian market a hard one to enter. The biggest challenge is to collect payments. Using international acquirers is problematic, as 80% of the cards owned are not enabled for international transactions. Furthermore, international transactions are subject to a 6.38% financial operation tax, in addition to normal exchange fees. On the other hand, creating a local entity is a challenge, as one must navigate corruption, a complicated tax code, burdensome red tape and high fees.
Brazil has the highest card issue rate in Latin America. Therefore, the fraud risk is very high.
Standard methods such as 3D Secure are used to prevent it.
Credit card 60%
Bank transfer 6%
Debit card 2%
28 Bil. USD
Population: 210 Mil.
Internet Usage: 68%
Worldpay - Global payments report, Nov 2018
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