Last updated: 9 March 2016
Boleto Bancário represents one of the most common payment methods for e-commerce in Brazil, and online stores should look into the best strategies to improve the performance of sales that make use of this option.
In this article we will list some of the general practices adopted by major e-commerces in Brazil when accepting payment through Boleto Bancário.
Advantages and Challenges for Boleto Bancário
As mentioned in our article How to Accept Boleto Bancário for E-commerce Payments, the Boleto Bancário is a payment method unique to Brazil which offers some notable advantages in comparison to other options. For example, payment through Boletos cannot be blocked by anti-fraud mechanisms, as it functions in a similar way to an invoice transaction, and are also exempted of the burdening fees applied by processors of credit and debit card payments. This allows, for example, for national e-commerces to offer discounts to purchases paid through Boletos and attract consumers of highly competitive product categories with this strategy.
Since payment through Boletos does not require for customers to possess bank accounts or either a debit or credit card, this option can be considered the one capable of reaching the widest portion of the Brazilian consumer public. Recent reports suggest that over 20% of all e-commerce transactions in the country are handled through Boletos Bancários, which makes this payment option a necessity for online stores that intend to reach a large audience. Not only that, certain B2B segments frequently resort to Boleto payments, as in most cases employees do not have access to payment methods such as corporate credit cards.
While the implementation of Boleto Bancário payments can be considered relatively straightforward some traits of this payment option should be kept in mind by store managers, such as the longer period of time necessary between the Boletos compensation and their processing and approval by e-commerce systems. While credit cards, debit cards and wire transfers have orders greenlit almost instantly following the approval of transactions, Boletos may take up to a full week to be processed by banks and gateways, a delay that might provide some challenges to sellers of physical products.
Moreover, it is estimated that over 30% of Boletos issued by online stores are not paid by customers, a rate that substantially lowers the e-commerces overall conversion rates. Considering that a recent regulatory update for national banks has required all Boletos, compensated or not, to be charged registering fees, the emission of a large quantity of unpaid Boletos Bancários might turn into an issue for store owners.
Increasing Conversion Rates for Boletos
The e-commerce sector has been experiencing a continuous expansion in Brazil over the last few years, and it is not uncommon in the present day to find customers of all ages and social classes making their first online purchases. With this target public in mind, many of the largest online stores in Brazil have adopted practices to increase the conversion rates for buyers that are unfamiliar with the payment process of Boletos. These include, for example, displaying detailed instructions on how these documents can be printed or paid online at checkout pages.
For customers that require additional notions of security and authenticity when making purchases on unfamiliar websites, Boletos can be edited by commerce systems to include certain types of personal information. According to the current regulation, all Boletos need to be registered with banks and include information such as the merchant's name, address, CPF or CNPJ numbers and also the buyer’s name and CPF or CNPJ number. However, it is also possible for Boletos to include buyer’s informations like physical and e-mail addresses, ensuring consumers of their authentic origin.
Due Dates and Reminders
Another aspect of Boletos that can be configured in order to increase the conversion rates are due dates. While it may seem that providing a longer limit for customers to pay for Boletos would increase the likelihood of payment, in many cases these prolonged periods result in a drop of conversions, as it is common for customers to ignore or forget to actually pay for their purchases after several days since the emission of Boletos.
Most of the largest e-commerce websites in Brazil set the due date of Boletos shortly after the day of their emission, usually after two to three days, as a way to incentivise customers to compensate them immediately. It is also a general practice for these stores to send e-mails to consumers who have not paid for their Boletos and find themselves close to their due dates, as reminders that their orders have not yet been processed and might be cancelled shortly.
Recurring Payments and Pay as You Go
Offering Boleto Bancário payment for services charged recurringly might seem like a counter-productive idea, as this method needs to be compensated manually after each issuance and therefore represent one of the least convenient of the options available in Brazil. However, Boletos Bancários can prove to be useful for attracting consumers to recurring payments or subscription services in the case when they are not familiar with their provider or would simply not trust to send them sensitive information like credit card numbers.
In these instances, Boletos can act as a safer method to engage new consumers, which after their first impressions can later be offered more convenient payment options such as credit cards. Similarly, in the case of Pay as You Go business models Boletos may also serve as a viable option for customers to purchase portions of pre-paid credits when they have yet to gain full trust of the service provider.