Online Payment for E-Commerce in Brazil

This article gives an overview of the Brazilian market for online payments related to e-commerce. We also include a coverage of the options available for merchants and consumers.

With 30+ payment options available for consumers, it's no wonder that, fragmentation in payment processing is a challenge for e-commerce business in Brazil.

Size of the Brazilian market

Data regarding online payments from ClearSale suggest that, there are around 80 million online credit card transactions processed in Brazil every year as of 2012.

Anti-fraud services rejected about 0.23% of all transactions due to suspicion of fraudulent activities.

The 80 million transactions estimate does not include Direct Debit options or Boleto Bancário. When included, these methods bring the total number of online payment transactions for e-commerce closer to 100 million.

Size of the Brazilian E-Commerce market

The web shop evaluation service, e-bit, estimates the Brazilian e-commerce related revenue to be BRL 28 Billion in 2013.

Comparing e-bit data from 2012 with similar data from the U.S. Commerce Department, shows that the US e-commerce market is 20 times larger than the Brazilian.

Brazilian e-commerce growth rate of 25% is higher than the US growth rate of 15.8%, yet, it is unlikely that the Brazilian e-commerce market outgrows the American.

Compared to Europe, the Brazilian e-commerce market is larger than Russia and all other European countries, except France, Germany, and the UK.

Payment Acceptance

Data from PayPal suggest that credit cards handled 81% of all e-commerce transactions in Brazil. Other payment methods and Boleto Bancário have an almost equal share, with 8% and 11%, respectively.

e-bit presents a different data, with 73% of all e-commerce transactions done by credit cards, 18% by Boleto Bancário, leaving 9% to other payment methods.

Without firsthand access to the data set, it's difficult to define which data are correct. Yet, e-bit's data, the 18% by Boleto Bancário, seems closer to what we would expect from the market.

Direct Debit and Netflix

It seems that Netflix has not exercised due diligence before investing in the Brazilian market. They explained their problem with collecting payments in Latin-America with a less developed e-commerce market.

Businesses that use recurring pull payments find the e-commerce market in Brazil to be more challenging than businesses that use single push payments.

Netflix is trying to calm investors, saying that recurring direct debit agreements and increased acceptance for e-commerce will improve their situation in Brazil.

It is not a unique situation to Netflix. Experience from other businesses suggests that recurring direct debit is not a perfect solution. The failed start-up Shoes4you reported that, as much as 25% of monthly direct debit requests failed as consumers blocked the bank transfer.

Pull Payments and Vivo

While Netflix has found the payment situation in Brazil difficult, Vivo is having great results selling music streaming and online book services, with carrier billing at a low price.

The key takeaway is that recurring pull payments seems to have a higher acceptance rate when "obscured" together with other expenses.

Payment Options

As of the beginning of 2013, there were 82.6 million active credit cards in Brazil. The two main players dominate the market, Visa with 38.7 million active cards, and MasterCard with 35.8 million active cards. Fueled by an increasing number of new banking customers, debit cards surpassed the number of credit cards for the first time in 2012.

Credit Cards

The four largest international credit card networks: Visa, MasterCard, American Express, and Diners Club are all used in Brazil.

Of the national credit card networks, among the most popular are:

There are also credit card issuers that have affiliations with credit card networks, yet, issue some cards without relation to any credit card network. For these cards, they enter direct agreements with the credit card acquirers, this includes companies like:

There are several smaller credit card issuers that have no affiliation with a network, these include companies like:

There are also credit card networks that cover parts of Latin America, namely, Cabal. The only Brazilian issuer of these cards is Bancoob.

The main motivator for credit card usage is the interest-free payment options. e-bit estimates from 2013 suggest that, 63% of all e-commerce transactions opted for credit card payments with installments.

63% is a high number, but it's lower than the year before. For 2012, e-bit estimates that 81% of all e-commerce transactions opted for credit card payments by installments.

Visa and MasterCard credit cards, issued outside Brazil, are often declined by anti-fraud service.

Debit Cards and Direct Debit

Transactions by debit card are like a direct debit transfer from one bank account to another.

Boleto Bancário

In The Brazil Business, we have written an extensive article on the topic of Boleto Bancário, so, we will not cover this topic.

For the merchandiser, it is simple to set up a Boleto Bancário system. Brazilian merchandiser only needs a bank account with Boleto Bancário, and an integration library for their e-commerce solution. Foreign merchandiser can use an intermediator to accept Boleto Bancário payments without holding a bank account in Brazil.

An Open Source library, like BoletoPhp, lets the merchandisers generate unregistered Boleto Bancários without communicating with the bank.

For unregistered Boleto Bancários, the bank will collect their fee upon receiving payment.

The other option is to integrate it with the bank, for them to send the so-called registered Boleto Bancário. The bank will charge for each issued Boleto Bancário, as well as for the alteration, but, not for receiving the payment.

Mobile Payments

For mobile payments, there are two options with a different level of maturity.

Carrier billing has been around for a long time, and is a well-established practice. Mobile operators support carrier billing with transaction fees, around 50% of the transaction value.

Mobile wallets have also been available in Brazil for 10 years. The pioneer has been the Oi. In 2010, they entered a joint-venture with Cielo and Banco do Brasil. The original Oi Paggo product reached around 250,000 users in Brazil.

Right now, there are about 10 mobile payment, or mobile wallet initiatives in Brazil. None of them have reached a critical mass yet. Later, we will write a dedicated article about mobile payment and m-commerce.

Other Payment Options

Besides the common online payment methods, there is also a variety of smaller, but, still used, payment methods.

  • Cards for salary advances and benefits like Brasilcard, PLENOCard, Grandcard, Valecard and Personal Card
  • Gift card issuers without affiliation with a credit card network like Grandcard and Personal Card
  • E-financing is also available at some banks, like Itau, 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.

There are also a variety of benefit cards that have limited use, and are, usually, only accepted in POS terminals.

These include popular meal ticket programs like Ticket and Sodexo, as well as similar programs for pharmacies, fuel, culture, etc.

These cards are not accepted through online payment gateways. It is common to order food online, and have the delivery boy bring a POS device to pay for the food with a meal ticket card.


Payment Intermediators

For years, there had been regulatory uncertainty around the legal status of payment intermediators. This caused a reluctance to invest in the sector. Today, it's a growing market, with PagSeguro as the clear market leader and several high profile players:

  • PagSeguro is the payment intermediator with the strongest consumer brand and most payment options. They have become a favourite of local developers and web designers for their easy integration. Payout to merchandisers takes 14 business days.
  • PayPal service in Brazil is similar to what it provides in other countries. It is the only payment intermediator that makes funds available momentarily for the merchandiser. Yet, transfer from the PayPal account to a bank account takes up to 5 business days.
  • Buscapé We have written before about Buscapé, and their many companies and confusing branding. Currently, they are promoting two payment intermediators. The first is Bcash, which is a rebranding of their Pagamento Digital service. The other is Dinheiro Mail by PayU, another Buscapé company. Bcash is a generic payment service. In fact free advertisement on Buscapé is the main competitive differentiator.
  • MercadoPago is a payment intermediator that spun off the online auction site MercadoLivre. Merchandisers are complaining about a long checkout process and slow payout, with up to 21 business days delay.
  • Moip differentiates them with quick payout. Merchandisers can apply for payout with a 2-business days delay. But, there are a series of documents needed to qualify for this 2-business days payout option.
  • BlueSnap is a new player in the Brazilian market, acting as a payment intermediator with focus on international merchandisers. They also handle tax clearance at a fixed rate of 22% to bring funds out of Brazil.

Looking at the consumer satisfaction with the payment method, intermediators give an understanding on how well the various services work.

The consumer complaint site ReclameAQUI, tries to give companies a rating similar to the Better Business Bureau. Their range goes from Very Good to Not Recommended, and the payment intermediators' scores are as follows:

The scores at ReclameAQUI are as of 26th February 2014.

Payment Gateway Providers

The market for payment gateway providers is in constant change, but the companies, in general, have less exposure.

The primary gateway providers in Brazil are:

  • Braspag is the leading Brazilian gateway provider, claiming to handle 55% of all online payment transactions in Brazil. Cielo acquired the company in 2011.
  • Allpago is a gateway provider with a strong international focus. They have specialised solutions for companies that wish to collect payments in Brazil, without having a legal presence in the country.
  • maxiPago! is another gateway provider with a strong international focus. maxiPago! claim to have the gateway with the highest transaction capacity in Latin America.
  • Akatus is a gateway provider that also has options for mobile payments and prepaid credit cards. Established in 2012 with funding from Chase Equity, the company is quickly growing in the Brazilian market.
  • CobreDireto is the payment gateway service from UOL Host. It is a web hosting company owned by the same parent company as PagSeguro.
  • MundiPagg is a pure play gateway provider. The company have just like Moip received significant investments from Arpex Capital.
  • PayU is a gateway operated by Buscapé.
  • SuperPay SuperPay is a hybrid gateway that does not only give access to the acquirers, but also connects with payment intermediators. The gateway service is also resold through the web hosting company, Locaweb, as their payment gateway product.
  • LibrePag is a gateway provider that also provide technical integration with e-commerce solution, like Magento.
  • Payzen is the online gateway product of the Lyra Network in Brazil. Lyra Network is a telecommunication company from France, which play an important role in the Brazilian M2M market. They manage more than 500,000 connected terminals.
  • Digital River is best known for the e-commerce platform tailored towards software developers. Their payment division known as Digital River World Payments also provide payment gateway services in various markets including Brazil.
  • Adyen is a Dutch payment provider focusing on mid, larger and enterprise e-commerce merchants. They provide payment gateway solutions for credit cards and boleto in Brazil.

Credit Card Acquirers

Rede, known before as Redecard, and Cielo, known before as VisaNet, dominate the Brazilian market for acquirers.

  • Rede used to be the exclusive MasterCard acquirer in Brazil. Today, the bank Itau owns the company, and they process cards from more than 25 different credit, debit, and benefit networks, including the China UnionPay network.
  • Cielo used to be the exclusive Visa acquirer in Brazil. Today, it is a publicly traded company that process cards from more than 20 different credit, debit, and benefit networks, including the Japanese JCB network.
  • Santander is a new acquirer in Brazil. Their activity started in 2011 after entering an agreement with GetNet and they currently manage around 5% of all transactions in Brazil.
  • Banrisul is a regional bank in the south of Brazil. They started operation as an acquirer in 2012, but they have a limited reach.

Fees, Rates and Costs

These data are only intended to give an indication of the cost structure in Brazil. As this is a competitive market, there is not much difference from one provider to the other.

Payment Intermediators

Transaction Cost
PayPal In Brazil 5.4% - 6.4% + BRL 0.60
International 6.4% - 7.4% + BRL 0.60
4.95% - 5.99%
DinheiroMail Credit Card in Brazil 5.99%
International 5.5% + BRL 0.50
Boleto Bancário 1.89%
4.99% + BRL 0.40
Moip Credit Card 5.40% - 7.40% + BRL 0.39
Boleto Bancário 1.90% - 2.90% + BRL 0.39

Payment Gateways

There is room for negotiating conditions for higher number of payment gateway transactions. In the table below, you will find the data we have collected, as well as information from e-commercebrasil.

Service Transaction Cost
Gateway Fee BRL 0.35
Acquirers 2.9% - 3.5%
Anti-Fraud BRL 0.7 - 3.6
Boleto Bancário BRL 1.5 - BRL 4

B2B Transactions

Data from the Brazilian Central Bank confirm that only 6% or 3.6 million, of the Brazilian credit cards have relations with business clients. The low penetration of business credit cards makes it difficult, for merchandisers that do B2B transactions, to rely on credit cards as the only payment option.

Notice, also, that larger companies might refuse to pay using Boleto Bancário, as well.

Connection Consulting data from 2012, within the IT industry, show that although Boleto Bancário is the preferred payment method, 46% of the companies have access to a credit card for online purchases.


The banks, the acquirers, and payment gateways all support Verified by Visa and MasterCard Secure Code.

Yet, roll out in Brazil have been slower than in Europe due to resistance, both from the banks and from the merchandisers. Merchandisers’ worry that their conversion rate will drop while banks worries about the extra support.

At the moment, Verified by Visa and MasterCard Secure Code is an opt-in solution for consumers that want to improve security.


Due to the resistance against Verified by Visa, and MasterCard Secure Code, among merchandisers, there is a market for anti-fraud services.

The major anti-fraud service providers are:

  • ClearSale is the largest provider claiming to analyse 75% of all transactions in Brazil. With more than 2000 clients in their portfolio, and 60 million transactions per year.
  • FControl is the anti-fraud solution from Buscapé. With 1500 clients, they are comparable to ClearSale in number of clients. But, their target is smaller clients and the number of transactions are also lower. Our estimate is that, their transaction volume is only around 10% of ClearSale.
  • CyberSource is the payment service provider owned by Visa. In 2011, they entered the Brazilian market with their anti-fraud service offering. Their market share is uncertain.

Each merchandiser must evaluate the value of anti-fraud services. ClearSale reported BRL 44.2 million revenue in 2012. Their numbers show that they flagged 192,000 fraudulent transactions, with a total value of BRL 170.16 Million.

In practice, you pay 1 dollar to save 4 dollars. If your marginal cost for the product or service is low it does not provide any benefit. Even worse, any screening process will have a rate of transactions that are falsely flagged as fraudulent, meaning lost revenue for the merchandiser.

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