Listen on SoundCloud
THE BRAZILIAN WAY – BOLETO BANCÁRIO
After missing out on several cycles of technological developments within payments and banking, the Latin-American ecommerce market has seen enormous growth in the last five years.
On a regional level, Brazil and Mexico compete for the spotlight, accounting for 32.5% and 28.8% of the Latin-American ecommerce market respectively. However, according to Statista, other economies, such as Peru, Argentina, and Colombia, have been drawing increasing attention due to their swift growth.
Strictly referring to Brazil, eMarketer estimates that it will have over 63 million digital consumers by the end of 2020, representing 37% of the population. Furthermore, Brazil has over 23 million cross-border digital buyers, making it very attractive to digital video content producers and sellers.
Therefore, there is a huge opportunity for selling in this region, and offering local payment methods is the first step for any online retailer to succeed in Brazil. After all, merchants that ensure a sleek, clean shopping experience for their customers and provide an array of payment methods at the checkout are more likely to increase conversion rates and avoid cart abandonment. Brazilians’ payment method preferences include Boleto Bancário, instalments, local credit cards, cash, and so on.
What is Boleto Bancário?
Boleto Bancário, simply referred to as Boleto, is an official Brazilian payment method regulated by the Central Bank of Brazil. Launched in 1993, Boleto is a push payment system that generates 3.7 billion transactions per year. It has become one of the preferred payment options for online purchases in the country and accounts for around 25% of all online payment transactions. It is used by Brazilians to pay for their monthly bills, such as water and electricity, or even taxes or fines.
Boleto can only be collected by an authorised Collector Agent in the Brazilian territory. Together with some companies from the private sector, all Brazilian banks, post offices (Correios), and lottery agencies have joined forces to create a local payments system that supports Boleto. Therefore, merchants that are selling cross-border and enter the Brazilian ecommerce market need to pay attention to the fact that Boleto Bancário payment processing requires a local partner and cannot be directly contracted with a bank from abroad.
How Does It Work?
The payment process for Boleto transactions is similar to wire transfers or payment methods that rely on cash usage.
At checkout, customers are provided with a prefilled Boleto Bancário payment slip, which can be used in two ways:
- The consumer can print the voucher received at the checkout and pay it in cash at any bank branch or authorised processors, such as drugstores, supermarkets, lottery agencies, and post offices.
- The shopper pays the voucher electronically at any of the more than 48,000 ATMs in Brazil, as well as through internet banking or mobile banking apps, which are widely used in the country.
These tickets have a barcode, corresponding serial number, transaction amount, issuing bank code, customer information, description, and expiration date. They are valid for 7 days starting from the issuing date. Boletos can be paid at ATMs, branch facilities, and internet banking of any bank, post office, lottery agent, and some supermarkets until their due date. After the due date, they can only be paid at the issuer bank’s facilities.
Generally, Boletos are confirmed with a delay of two to three business days, with the Brazilian bank system confirming paid Boletos on the next business day from Tuesday to Saturday. The Boleto system itself has no refund function, and banks and many payment service providers do not offer a solution either; however, there are payment providers, such as Macropay, that provide automated refunds.
Advantages for Merchants Expanding to the Brazilian Market
- A high degree of acceptance across Brazil – Boleto Bancário can be paid physically at any bank branch or authorised processors, such as over 13,000 lottery agencies, pharmacies, and supermarkets. It can also be paid electronically at ATMs or via internet and mobile banking.
- Boost conversion rates at the checkout – Boleto Bancário usually helps to increase online store conversion rates.
- A high degree of security – Many Brazilian shoppers, wary of fraud risk, prefer Boleto Bancário as a secure payment method.
Interesting Facts About Boleto Bancário
The huge popularity of this payment method does not rely on the increased usage of smartphones or internet penetration. On the contrary, most Brazilians are used to paying with cash, and even those who have a card usually feel more comfortable paying with cash. The Locomotiva Institute found that 71% of the population prefers to pay in cash for their daily purchases. Moreover, 45 million adults do not have a bank account. For that matter, Boleto Bancário is a popular payment method in Brazil, as it allows customers a secure way to pay in cash for online purchases.
Another interesting fact about the payment habits of Brazilians is the way COVID-19 impacted the use of Boleto Bancario. Between April and May 2020, EBANX surveyed more than 1,500 consumers of international websites in Brazil and found that Boleto is still an important option for Brazilians who buy online. Furthermore, most Brazilians who paid for their international purchases with Boleto before COVID-19 said they would not change the payment method during the pandemic (86%).
However, Brazilians who were already buying on international websites with Boleto before the pandemic admitted that they will choose an online payment experience to pay the Boleto during the pandemic.
Before we conclude today’s instalment, we will leave you with some additional tips and tricks that you could use to boost your conversion rates if you plan to expand your ecommerce business to Brazil. Brazilians appreciate details about the product they are about to buy when compared to other markets, according to Google. Thus, customers enjoy reading reviews before shopping to decide what to buy; they also like sharing details about their purchases, their previous experiences with online retailers, and their anxieties and expectations about the products they buy.
Most importantly, they value payment option availability the most when compared to markets such as the U.S. and the U.K., according to Google’s Online Shopping Trends report.
So, why not start offering Boleto Bancario to your Brazilian customers today? It certainly has a lot of benefits!