We no longer support this browser. Using a supported browser will provide a better experience.

Please update your browser.

Close browser message

E-commerce Payments Trends

2020 E-commerce Payments Trends Report: Brazil


Brazil’s e-commerce market offers huge potential, but ongoing cash payments and tough import rules can present a challenge to international merchants

Key Takeaways

 

Brazil takeaway

Brazil’s huge population represents an exciting opportunity for merchants. However, digital and physical infrastructure is lacking in many regions, and annual basket spend at present is low. 

Brazil takeaway

Brazil is a mobile-commerce first nation that prefers to shop and pay via smartphone apps. Developing slick apps that make card payments simple and secure will drive customer loyalty and trust. 

Canada takeaway

The sheer scale of Brazil’s geography leads to logistical issues that e-commerce companies need to overcome. Issues range from areas where there is poor security surrounding product deliveries, to areas without coverage by delivery companies.1 Merchants will need to work with both local and international couriers and business partners to be able to fulfil orders effectively.

 

 

Brazil 2020

The BRL90 billion (US$22.8 billion) Brazil e-commerce market makes up 4.3 percent of the overall retail market in the country,2, 3 with 72 percent of the population yet to make their first online purchase.4 Uptake varies greatly across this country of 211.7 million people, with the south-east region accounting for the bulk—60 percent—of total e-commerce sales in Brazil.5

Growth has been patchy, in part down to a lack of the physical and digital infrastructure required to support high levels of e-commerce. Just over four out of 10 Brazilians (41 percent) say their internet connection is too unstable to make online purchases, with Brazilian internet speeds (18 Mbps) almost three times slower than the global average of 49 Mbps.6

Argentinian marketplace Mercado Libre dominates the Brazilian e-commerce space, and Americanas.com and US giant Amazon also make the top five.7 Both Mercado Libre and Amazon are investing in their logistics infrastructure in the north east of Brazil to compete with local retailers and make e-commerce more convenient than physical retail.

Major shopping holidays include Christmas, Mother’s Day (the second Sunday in May), Valentine’s Day (June 12), Father’s Day (the second Sunday in August) and Easter. Carnival, Children’s Day on October 12, Consumer’s Day, Black Friday and Cyber Monday are also key shopping dates.8

 

Pandemic Led to E-commerce Surge in the First Half of 2020

  • The Brazilian e-commerce market has been expanding at a steady double-digit rate since 2017. Growth is expected to slow to a compound annual growth rate (CAGR) of 9.3 percent to 2023,9reflecting wider economic pressures created by COVID-19.
  • E-commerce use varies by region. The north east, with a 27 percent growth rate, is the fastest-growing region for e-commerce. This is followed by the north (22 percent), south (20 percent), south east (6 percent) and central west (5 percent).10

  • Certain areas of the e-commerce market spiked in the first half of 2020 due to the impact of COVID-19, which hit Brazil hard. Food and personal care, cosmetics/perfumes, furniture and electronics were some of the most popular categories.11

Rural Brazil Relies on Smartphones, Supporting Mobile Commerce Growth

  • Brazilian mobile commerce is outperforming overall e-commerce, and is expected to grow at a compound annual growth rate of 17.8 percent to 2023, when it will be worth BRL81.4 billion.12
  • Brazil is fast becoming a mobile-first nation. The proportion of internet users that exclusively use their smartphone to access the internet jumped from 49 percent in 2017 to 56 percent in 2018. Smartphones are the sole device used to access the internet for 77 percent of Brazilians in rural areas.13

  • Mobile commerce will increase as more and more Brazilians purchase their first smartphone. At present, smartphone penetration nationwide is at 44 percent,14 leaving a large percentage yet to own a device.

 

Apps are Preferred Over Browsers in Brazil, and Driving up Basket Value is a Priority 

  • Lower income segments of the population typically own only one device—a smartphone. This has contributed to the growth of mobile commerce.15 More transactions are completed via an app than a mobile browser.16

  • Looking ahead, driving up basket value will be important. At present, the average annual basket spend for e-commerce overall in Brazil is BRL1,518.18 (US$345).17 Mobile devices are usually used for lower value purchases than those made with fixed devices. This can be achieved by improving mobile commerce user experience, and making security measures and payment options clear.
  • In terms of mobile commerce volume, perfumery, cosmetics and health, with a 17.8 percent market share, is the largest product category. This is followed by fashion (16.5 percent), home and decoration (12.8 percent), household appliances (10.6 percent) and sport and leisure (7.1 percent).18

Cards and Cash Dominate Brazilian Payments Market

  • Offering card payments is essential: cards comprise 59 percent of completed e-commerce payments.19 Both debit and credit cards are used, with 1.58 debit cards and 1.05 credit cards per capita.20
  • Cash is the second-most popular option, taking 19 percent of payments.21 This can be explained by 30 percent of the population being unbanked,22 and the ongoing popularity of Boleto Bancário, a payment method regulated by the Central Bank of Brazil. Shoppers pay for online purchases in cash at banks, ATMs, or with an authorized payment processor, such as a drugstore or post office. Payment usually clears within two to three days.23
  • The introduction of open banking in the second half of 2020 is expected to boost alternative payment methods such as digital wallets and bank transfers. Consumers will be able to authenticate online payments on merchants’ sites directly with their bank. At present, PayPalTM is the most popular digital wallet option.24

 

China and U.S. are Most Attractive Overseas Shopping Destinations, but Import Tariffs are High

  • China, the U.S. and Japan are the top three cross-border shopping markets.25 A large proportion of Brazil’s online consumers have made a purchase from abroad—47 percent—but cross-border e-commerce makes up only 8 percent of the total e-commerce market, suggesting low-value items are preferred.26, 27
  • Brazilians are decreasingly buying from foreign websites. This has been influenced in part by long delivery times, currency fluctuations and the ensuing impact on pricing.28
  • Import taxes can also be prohibitively high. With a focus on encouraging domestic sales and businesses, imported goods with a value of less than $3,000, and delivered via standard postal services, incur an import tax of 60 percent, payable by the consumer, plus a BRL15 customs clearance fee.29

 

Brazil’s Payments Regulations are Quickly Evolving to Onboard Open Banking 

 

  • Regulation/trends
    The Brazilian Central Bank is implementing open banking. It will require the country’s top five banks, which together make up approximately 80 percent of the market, to share customer data with third parties. Open banking is expected to launch in Brazil later in 2020.30
  • Barriers or benefits to e-commerce market entry
    Brazil is a diverse, rapidly evolving country. There are varying cultural, tax and consumer behavioral differences across regions, which e-commerce companies need to understand in order to succeed in the Brazilian e-commerce market.31

A local entity is recommended. Not all domestic payment cards are enabled for foreign currency transactions.32 Boleto Bancário payment processing requires a local partner and cannot be directly contracted with a bank from abroad.33

  • Factors driving the cost of payment acceptance
    Debit card interchange fees on transactions are capped at 0.8 percent of transaction value. The average must not exceed 0.5 percent. 

Boleto Bancário cost of acceptance varies by provider, ranging from BLR1 to BLR10. The cost of accepting PayPalä is higher than the average cost of accepting payment cards.34

 

J.P. Morgan has analyzed 34 e-commerce markets to decipher the trends and challenges driving global e-commerce in 2020. To access our insights on a country-by-country basis, click here.

 

1. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019
2.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via ABCOMM, 2020. 
3.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
4.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
5.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019
6.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
7.similarweb.com, July 2020. ‘Top sites ranking for e-commerce and shopping in Brazil.’ Accessed July 2020
8.legacy.export.gov, May 2019. ‘Brazil – eCommerce.’ Accessed July 2020. 
9.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company and ABCOMM, 2020.
10.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019
11.reuters.com, June 2020. ‘Brazil ecommerce jumps 57% in first five months of 2020 fueled by COVID-19.’ Accessed July 2020. 
12.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company and WPL, 2020. 
13.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Cetic.br, TIC Domicilios 2018, 28 August 2019.
14.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Cetic.br, TIC Domicilios 2018, 28 August 2019.
15.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
16.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020 and Ecommerce Foundation, 2019.
17.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020 and Ecommerce Foundation, 2019.
18.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
19.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
20.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Banco Central Do Brasil, 2020.
21.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
22.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via World Bank, 2017. 
23.pagbrasil.com, 2019. ‘Boleto Bancário.’ Accessed July 2020. 
24.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
25.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via IPC, 2018, 2019.
26.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
27.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
28.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019
29.easyship.com, 2020. ‘Shipping to Brazil: the definitive ecommerce guide.’ Accessed September 2020. 
30. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Central Bank of Brazil, 2020.
31.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Ebit/Nielsen, Webshoppers—39th Edition, 2019.
32.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
33.pagbrasil.com, July 2020. ‘Boleto bancário for online sales.’ Accessed July 2020.
34.J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Central Bank of Brazil, PayPal & Conta Azul, 2020.
Americas

Already an Existing Customer?

Contact us if you require advice, help or support.

Existing Merchant Service Customers

If you have a technical issue or a question about your merchant account, please call your Relationship Manager directly.
Alternatively, call our merchant support team on:

For Europe: +353 1 726 2909     UK: 0845 399 1130

Further information is available at any time through your Paymentech Online account.

 

Out of Courts Complaints and Redress Procedures

  1. J.P.Morgan has in place complaint resolution procedures to settle complaints of Merchants arising from their rights and obligations under Parts 3 and 4 of the Payment Services Regulations 2018.
  2. If you have a complaint, please contact your Relationship Manager. Your complaint will be addressed in accordance with J.P.Morgan complaint policy, which we are happy to provide upon request.
  3. In the event of a complaint, a Merchant may refer the matter to the Irish Financial Services and Pensions Ombudsman (FSPO) or such relevant out-of-court complaint body or to such other competent out-of-court complaint body applicable to you in the country where you are established.
  4. Details on complainant eligibility are available on the FSPO website.

                   You can contact the FSPO at:

Irish Financial Services and Pensions Ombudsman
Lincoln House
Lincoln Place
Dublin 2
D02 VH29
Ireland
Tel: + 353 1 567 7000
Email: info@fspo.ie
Website: https://www.fspo.ie

 

Merchants domiciled in the UK

  1. From 1st January 2021, J.P.Morgan will enter into the UK's Temporary Permissions Regime (TPR).
  2. The TPR has been established by the UK regulators to allow firms such as J.P.Morgan to continue to operate in the UK following the end of the Brexit transition period.
  3. During the TPR, a UK-based merchant that is not satisfied with our response to a complaint and that qualifies as an eligible complainant may refer the matter to the UK's Financial Ombudsman Service. Details on complainant eligibility are available on the Financial Ombudsman Service website.

                   You can contact the Financial Ombudsman Service at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
Free phone: 0800 023 4567
Email: complaint.info@financial-ombudsman.org.uk
Website: www.financial-ombudsman.org.uk