Buy Now, Pay Later is the fastest-growing payment alternative in North America
As the largest ecommerce market in Latin America and the world’s ninth largest economy, Brazil is an attractive market for ambitious businesses. The payments landscape is changing too. Uptake in card usage is catching up with cash - 19% of the population are paying with plastic, and in 2018 alone there has been a 16% increase in mobile payments.
Since opening our office in São Paulo in 2011, we’ve focused on ecommerce, supporting Latin American businesses to grow online and helping global companies accept the key payment methods that Brazilians love. Now, we’re launching our point of sale solution in the region.
In this blog, we’ll look at the climate of Brazil’s payments market and how AMARO is blazing the trail for unified commerce in the nation of Samba, soccer, and... scheme fees.
The story of Brazil’s payments market is long and winding. Until very recently, only two acquirers were able to operate in the region. Then, in 2010, to encourage competition, Brazil’s Central Bank decided to liberalize the market. This resulted in a raft of new payment providers, though most were connected to the traditional banks.
Throughout this period of new competition and instability, all in-store payments were processed by an antiquated system called TEF (Transferência Eletrônica de Fundos). The problem with this system was that it didn’t allow businesses to integrate their online stores with physical retail. And with the rise of ecommerce, this became problematic.
Retailers with an existing ecommerce strategy ended up spending a lot of money and resources maintaining two platforms for their in-store and online sales. Many businesses had separate teams, inventories, reporting capabilities and even reconciliation platforms for their ecommerce and physical stores. Fast forward to 2019, and while this is slowly changing, our latest retail report uncovered that only 24% of Brazilian businesses are ready to make the digital transformation. And that’s why we’re here, to help companies get ready, and to support progressive businesses like AMARO develop a unified commerce solution.
AMARO is one of Brazil’s fastest growing fashion retailers and was founded in 2012 with the goal of providing its customers with the shopping experience of the future.
After starting life as an ecommerce platform, AMARO gradually expanded to include physical retail. Its 'Guide Shops' (the name for their retail outlets), were opened to bring the best of their ecommerce expertise to the physical world; namely a culture of innovation, practicality, speed, and convenience.
An example of this would be the home delivery option. Shoppers can try clothes on in-store, but have their purchases delivered to their home address within minutes. It’s a great option for people with too many things to carry, people traveling on cramped public transport, or for people with mobility issues. Customers can also buy online and collect or return their unwanted goods to any AMARO store. That’s where Adyen comes into the equation.
Offering shoppers a simple way to buy across channels and locations is a must for a company like AMARO, and they knew that the best strategy would be to use their website as a sales platform in-store. But prior to working with Adyen, they couldn’t find any payment terminals capable of connecting ecommerce with their physical stores.
They tried everything: Connection via an app, 3G connectivity, and Bluetooth, but the implementation was never viable. The turning point came when we introduced our new payment terminals, part of our broader Unified Commerce solution.
"When the Adyen team told us about the launch of their POS solution in Brazil, we knew it would be perfect: it was exactly the final piece we needed to integrate ecommerce with our Guide Shops."
When AMARO signed up with Adyen in October 2018, Black Friday was just around the corner. To prepare for this, the biggest day in the Brazilian retail calendar, all of the company's other technical projects were put on hold. But even at this crazy time, they were able to get up and running with us within two weeks:
"The integration with Adyen was super easy: only two people from AMARO worked on it and were able to implement the solution in two weeks,” says Thiele. "Including testing, everything was ready in a month, and we could start the pilot in the Higienópolis Guide Shop before Black Friday."
Seeing the benefit of our unified commerce solution in AMARO’s flagship retail stores led the remaining associates to ask when they would be receiving our POS terminals. Thiele adds:
"Our previous payment solution was too old-fashioned. Guide Shop consultants needed to process the payment at the terminal as a separate transaction so they could go back to ecommerce platform and authorize payment manually.''
A further benefit for their card-favoring customers is being able to use our tokenization payment technology. This means having the ability to pay online without having to enter the card number, since the sensitive data is saved right after the first purchase - whether it is carried out online or offline - enabling one-click payments.
With tokenized payments, the risk of fraud is considerably reduced. Shopper data such as customer name, card number and bank account is stored securely via a unique code that can be used by the merchant to charge subsequent purchases. As a result, shoppers are happier for the convenience.
Now we’re live with POS in Brazil, we’re looking forward to creating new partnerships with similar forward-thinking businesses. So if you’re looking to prepare your business for the age of unified commerce, get in touch.
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