Payment methods in Brazil 🇧🇷

The Brazilian payment ecosystem is extensive and diverse, mirroring the country’s economic dynamism. In 2023, it continues to evolve with the swift adoption of modern payment technologies. Brazilian consumers have a plethora of choices when it comes to online transactions, facilitating the surge of e-commerce. The e-commerce market in Brazil is robustly growing, with revenue projected to reach USD 42.33 billion by the end of the year ​¹. This growth is partly propelled by the diversified payment methods catering to the varied preferences of Brazilian consumers. This article delves into the preferred payment methods of Brazilians, shedding light on the impact of financial innovations on e-commerce and how they shape the digital commerce landscape in Brazil.

Payment by card in Brazil

In 2023, Brazil’s e-commerce landscape thrives on card payments. Local card schemes like Elo and Hipercard lead this trend​¹​​²​​³​. Established in 2011, Elo competes fiercely with international giants​²​. Backed by major banks, its market share expands steadily​⁴​. Specifically, Banco do Brasil, Bradesco, and Caixa Econômica Federal propel Elo forward. This domestic brand solely facilitates transactions in Brazilian Real, embracing credit, debit, and prepaid card transactions​⁵​.

Similarly, Itaú Bank’s Hipercard gains traction. Particularly popular in Brazil’s Northeast and South regions, it grows robustly​³​. Over 470 thousand establishments accept Hipercard, indicating widespread adoption​³​. Moreover, more than 13 million cards circulate since 2010, depicting a solid user base​³​.

Furthermore, the installment payment feature is a hallmark of these local card schemes. Brazilians favor this flexible payment structure, finding it financially accommodating​⁶​. In 2021, domestic cards claimed 46% of e-commerce sales, highlighting local schemes’ pivotal role​⁶​. This trend continues in 2023, with a slight market share dip to 40%, yet maintaining significant influence​⁷​.

Additionally, international players like Visa and Mastercard also operate in Brazil, yet with a local twist. They too authorize installment payments, catering to local preferences​¹​​⁶​. However, local schemes capture the market more adeptly. The tailored approach of Elo and Hipercard resonates more with the local populace.

Local actors: Elo, Hipercard, BNDES, Cabal, Sicredi

       

 

Payment by cash

In 2023, Brazil’s e-commerce scene witnesses nuanced shifts. Cash, a traditional payment method, retains significance. It accounts for 16% of online purchases in 2022​¹​. Despite digital momentum, 47% of transactions countrywide still occur in cash​²​. The persistence of cash payments stems from a substantial unbanked population and debt situations. Nearly 55 million adults lack bank access, nudging them towards cash transactions​²​.

Local actors recognize this gap. They innovate to bridge the digital divide. PagBrasil, a local fintech, unveils PEC Flash®. This novel cash payment method targets e-commerce. It requires no bank account or credit card from buyers​²​. Additionally, it offers almost instant payment confirmation, a leap towards real-time cash transactions online.

Furthermore, Boleto Bancário, a cash-on-delivery method, remains popular. Especially among the unbanked, it’s a go-to payment alternative for online purchases​³​. This method embodies the intersection of traditional and digital commerce.

On the global stage, cash usage declines. Brazil follows this trend with a 7 to 10 percentage points drop in cash transactions​⁴​. Yet, the country’s unique financial landscape molds a different narrative. Cash and cash-on-delivery systems like Boleto Bancário endure in the e-commerce domain.

Moreover, 11% of e-commerce payments come from Cash & Boleto, a notable market share​⁵​. This figure underscores the continuous relevance of cash in Brazil’s online retail sector.

Local actors: Boleto, PECFlash

 

 

Payment by Bank Transfer

In 2023, Brazil’s e-commerce realm experiences a dynamic shift towards digital payments. Bank transfers and Instant Payment System (PIX) stand central to this evolution. Local actors drive this transition, fostering a conducive environment for online transactions. Nearly 800 Payment Service Providers (PSPs) actively facilitate PIX payments, showcasing the local industry’s vitality​¹​.

BoaCompra integrates with PagSeguro/PagBank, enhancing PIX’s accessibility for instant payments​²​. This collaboration underscores the local fintech sector’s agility. Moreover, Banco Rendimento partners with Ria, joining the PIX network to expedite local transfers and payments, ensuring funds reach customers swiftly across Brazil​³​. This partnership exemplifies the innovative spirit within the local banking sector.

EBANX, a pivotal player, provides diverse payment solutions. Offering bank transfers and instant payments, it bridges international and domestic transactions in Brazilian Reais (BRL). Its role is instrumental in bolstering Brazil’s e-commerce payment infrastructure.

In 2021, bank transfers account for 10.9% of e-commerce payments, a figure projected to rise to almost 18% by 2025​⁴​. This growth reflects the enduring relevance of traditional payment methods. Concurrently, PIX’s popularity surges, with transactions surpassing traditional banking transfers​⁵​. By 2023, over 150 million users engage with PIX, marking it as a formidable rival to credit cards in e-commerce​⁶​.

Furthermore, global trends depict a decline in bank transfers for online purchases, contrasting with Brazil’s scenario where bank transfers are on an upward trajectory​⁴​. This disparity highlights Brazil’s unique digital payment ecosystem, shaped significantly by local actors.

Local actors: Pix, Nu Bank, Banco do Brasil, Itau, Bradesco, Banrisul

         

 

Payment by installment and BNPL

In 2023, Brazil’s e-commerce scene vibrantly embraces the Buy Now, Pay Later (BNPL) model. Local fintechs spearhead this shift, weaving BNPL into the nation’s robust installment payment tradition. Notably, Provu emerges as a key player. Partnering with MarketUP and ABL Group, they unveil a digital credit Point Of Sale (POS) system, targeting over 150,000 active entrepreneurs​¹​.

Furthermore, Addi offers a three-installment, interest-free payment scheme. This initiative amplifies digital commerce, rendering BNPL an accessible, consumer-friendly option​²​.

Koin, another noteworthy contender, eyes a solid footing in Brazil’s BNPL market. Their ambition mirrors the broader competition among regional players like Nelo, Alchemy, and dLocal, all vying for a share in this burgeoning market​³​​¹​.

The growth trajectory is remarkable. The BNPL transaction volume in Brazil is set to surge by about 23% in 2023, reaching a notable value of US$6,031.9 million. This upswing resonates with the global BNPL trend, yet the local actors ensure a distinctive Brazilian imprint on this model​⁴​​⁵​.

Local actors:

for B2C, Addi, Provu, Koin, Alchemy, BoletoFlex,

        

for B2B, Dinie, Tino (formerly TruePay)

 

 

Payment by digital wallet and X-Pay

In 2023, Brazil’s e-commerce landscape warmly welcomes the surge of e-Wallets. Local players, alongside international counterparts, drive this trend forward. Notably, Swap emerges as a promising local entity, introducing fresh dynamics to the digital wallet scene in Brazil​¹​.

Moreover, the significant presence of PicPay amplifies this trend. By partnering with EBANX, PicPay facilitates international e-commerce transactions, bridging Brazilian consumers with global online marketplaces​²​.

Additionally, other international e-Wallets like Neteller, Skrill, and AstroPay find traction in Brazil, expanding the digital payment spectrum​³​.

The market responds positively. An approximate 20% annual growth in Latin American e-commerce till 2025 underpins the rising adoption of e-Wallets. Specifically, digital wallet transactions now constitute around 11% of all e-commerce transactions in Brazil, with a steady upward trajectory anticipated​⁴​.

Furthermore, a broader shift in payment strategies among Brazilian companies accentuates this growth. Approximately 36% of companies now utilize digital wallets, reflecting a growing preference for this payment method​⁵​.

Local actors: PicPay, PagBank, Swap

   

 

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