Online payment methods in Brazil
With an increasing number of startups and online companies, e-commerce providers and other online businesses, payment methods on the Internet have become an important aspect of Internet business development in Brazil. In the late 1990s and early 2000s online payments were quite a challenge since there were very few online payment providers active in Brazil. Providers from other countries (like Paypal, Moneybooker/Skrill etc) were not attending Brazilian customers and also credit cards were still rare in the country. Especially in the (lower) middle class which is an important customer group in Brazil.
Many online companies offered traditional bank account transfers which opened up doors to online fraud, usually without any consequences since there was no experience in online fraud investigations and no legislation addressing online business transactions (very different than today). Besides bank transfers, companies were also using the traditional boleto bancário payment, a special prepayment system in which users receive a bar code document that they pay through their bank account or cash in a number of establishments (e.g. casa lotérica). Although this is a widely accepted and secure payment system it carries a few strategical disadvantages for online companies since they need to wait for the client to literally take a walk to the bank or another place to complete the payment process. Although today online banking is facilitating the boleto payments it can still delay the transactions in some cases for hours, days or weeks and maybe even cause a termination of the purchase and payment process if the customer simply decides after one or two days not to purchase the product any more.
Much more favorable for companies are instant payment systems via credit cards (mostly Visa and Master card) which are supported by payment providers or gateways of which MercadoPago, PagSeguro, Paypal, PayU, MoIP and Conta Mobi are currently widely used options in Brazil. Payment gateways also support online businesses to accept payment by installments, a very popular payment method all over the country.
Having said that, credit cards are today a very important online payment method in Brazil. Nevertheless, other options including debit cards and the boleto bancário are also very important since not all consumers and citizens have credit cards. Companies that want to reach out to the large number of consumers from the lower middle class need to take non-credit card payments into consideration. Even if this might delay a number of transactions. It is the only way to reach this section of the population.
Bank collection procedures for single purchases and payments (as they are used in a number of other countries) are not available in Brazil. Not to confuse however with bank collection authorization for frequent payments on a monthly basis for example. These do exist for mobile telephony, electricity and similar providers but not for e-commerce or other companies in the retail industry. As mentioned above, retail and online service companies are using credit cards, debit cards and boletos.