Brazil represents over 40% of LATAM’s ecommerce, with retail online sales reaching $19,79 billion in 2015 and a 13,5% growth expectation for 2016.
Brazilian shoppers are avid credit card users, with the overwhelming majority preferring credit cards for their online purchases. It is important to note that many of these cards are not enabled for cross-border payments.
Another important payment method is Boleto Bancário, a cash-based payment method initiated by the consumer, resembling the process of a bank transfer. Customers who do not have a bank account or credit card typically use this method.
Finally, another key fact of the Brazilian payment landscape is that up to 80% of all ecommerce payments are made in installments, where partial payments over a period of time are made to finance purchases.
To offer payments in installments, merchants must be connected to local Brazilian acquirers. Many Brazilian cards are also limited to domestic transactions only, which also require a connection to a local acquirer. Adyen offers direct connections to local acquirers and has full coverage of domestic and international credit cards in Brazil. A direct connection to a local acquirer also benefits shoppers as they avoid paying local government taxes summing up to 6.38% for each cross-border transaction.
Mexico is the second-biggest retail ecommerce market in Latin America, and compared to Brazil, a much more mobile market when it comes to online purchases. Besides cards, cash-based payment methods, like OXXO, and bank transfers are also popular, with a smaller percentage of payments occurring via PayPal. Installments (for cards) are also popular, and a domestic entity is required to support this type of payment.
Installments (for cards) are also popular, and a domestic entity is required to support this type of payment.
In Mexico, many domestic cards are not enabled for cross-border purchases and use of local acquirer is therefore recommended to increase authorization rates. Adyen supports all key local payment methods.