For many merchants looking to gain a foothold in Latin America, Brazil is a compelling choice as the number one target market.
In 2013, the South American giant represented 61% of Latin American e-commerce, yet still experienced an impressive 28% growth. And there is plenty of upside potential ahead. In a population of 200 million, only around 107 million people are online, and there was an estimated 60 million online shoppers in the second half of 2013.
Understanding Local Preferences
But for all its potential, an understanding of local payment preferences is a critical part of the market entry process for international merchants who want to truly capitalize on the opportunities that the market has to offer.
For example, Brazilian consumers are avid users of credit cards, and an overwhelming majority (78%) found to prefer credit cards for their online purchases. But while the most popular cards by far are Visa and MasterCard, most of these are not suitable for cross-border transactions.
Furthermore, a significant minority (15%) prefer local cash-based payment methods, particularly Boleto Bancário – a popular ticket-based form of payment regulated by the Brazilian Federation of Banks. Although this is based on old technology, it is a must-have option for any merchants serious about having a presence in the market.
Mobile on the Move
M-commerce remains underdeveloped in Brazil compared to some other markets, but the mobile channel tripled its share of online sales in 2013, and it is on track to become the world’s fifth-biggest mobile market in 2014.
With estimates suggesting that by 2017 almost all Internet users in Brazil will be accessing the Internet with a mobile device, it is essential for merchants to build the mobile channel into their payments strategy to truly capitalise on the market potential.