Boleto Usage in the Digital Era and What's Next

Learn why the Boleto Bancário is still popular in Brazil and what EBANX is doing to improve boleto conversion rates.

Boleto Bancário is the most significant voucher payment method in Brazil. As Boleto’s format remains unchanged since its creation 25 years ago, it was up to payment providers to find solutions for it to meet the modern society’s needs.

Read now: Everything You Need to Know About Boleto

If in the beginning this payment method could only be paid physically, in cash, at lottery agencies, bank branches or ATMs, nowadays Brazilian customers can pay their Boletos through the internet, mobile banking apps or even using e-wallets.

During my workshop at the EBANX Summit 18′, I was able to bring some internal data that shows that, even though the looks of a Boleto have been exactly the same for all these 25 years when we look at ecommerce in Brazil, boleto usage numbers are still relevant.

NeoAtlas research revealed that 35.5% of all online purchases in 2017 were made using Boleto as the payment method; if we narrow that down to the preference of customers when shopping at cross-border ecommerce, the number goes up to 50%, EBANX internal data.

That means we have a really outdated payment method being chosen by Brazilians as a preferred method of payment on ecommerce to this day.

The need to have a deep understanding those customers that prefer Boleto over credit cards became apparent to us, so in 2017 we ran a survey with our customers who had paid with boleto.

Here’s what we’ve got.

Who uses boleto?

One of the most relevant findings was that 71% of Boleto users actually have a checking account, meaning that they have access to a debit card (and probably to credit cards) so they could pay for their online purchases using such methods if they wanted, but they’d still prefer to pay with Boletos.

The actual unbanked population in Brazil that uses Boleto represents only 15% of our customers, a much lower number.

The same research also revealed that most of the people who choose to pay with Boleto here at EBANX are actually working-age, comprehending both people who saw the rise of the internet and are connected today, and those who weren’t even born in a world without the web.

So, even though all signs point to a young connected population that trusts the internet enough to use their Credit Cards, their actions still point to a high distrust making them choose Boleto Bancário as a payment method.

Why do they choose Boleto Bancário?

To validate our assumption, we asked the surveyees why Boleto is their preferred method of payment and we got a few different reasons. Here is what they have answered:

1. Safety (38.8%): Brazilians usually don’t trust the internet enough to put their credit card information on ecommerce websites. They prefer going with a payment method that might take longer and require more effort but that they know will keep their information safe.

2. Discounts (38.5%): Before ecommerce, store owners would give a 5 to 10% discount to customers if they were to pay with Boleto in order to stimulate them to switch from credit card installments, a very common habit in Brazil. The motivation behind this? Getting the purchase’s full amount in a one-time payment as opposed to several smaller ones, and also having more security since Boleto is a risk-free method. Thus, for merchants, it made sense to take a small hit on profit in exchange for those perks. This practice is still seen today in physical stores and some Brazilian online shops are also using it, getting users familiarized to this practice.

3. Time (26.6%): After a Boleto is issued, the customer has a few days before the due date to actually pay for it. For merchants, this is a bad thing due to stock management for example, but Brazilian customers like this feature, according to our survey. Customers do a lot of impulse buying, meaning they don’t necessarily need or want the product they are purchasing. For that reason, when they are impulse buying, boleto allows them to have more time to think their purchase through. It happens even more frequently when merchants charge in foreign currencies: consumers will issue a Boleto when they see a foreign price that looks good for them but will use the time until the due date to research alternatives on other websites.

4. Financial Planning (20.7%): And lastly, very tied to the previous aspect is financial planning. Because people are buying things without necessarily checking prices first, they will choose Boleto because the extended due date also allows them to check their own bank accounts and see if they can actually afford the products. Another aspect to this reasoning is the surprise factor that afflicts a lot of Brazilians every month when they do a lot of impulse-buying using their credit cards. With a credit card, consumers don’t see how much money is going out of their accounts and how much is left, and at the end of the month when the credit card bill arrives, a lot of them might be surprised with the high amount spent. To avoid that feeling, Brazilian customers can choose Boletos to give themselves the chance to be better prepared.

We know for a fact that 50% of our customers will take all these factors into account and choose to pay for their purchases with Boleto. And yet, at the end of the day, only 30% of all purchases actually end up being converted. So, we have decided to study what was wrong and then implement some changes.

Current payment flow

The majority of our users issuing Boletos are doing so on mobile devices (52.7%), but their conversion rate (~15%) is much lower than that of those who issue Boletos on desktop devices (~30%).

Taking a better look at the payment flow, we have realized that the desktop version of a Boleto is a pretty simple HTML that adapts to the user’s screen and looks pretty similar to the original Boleto we print up to take to a lottery store. It is something familiar and recognizable for any Brazilian.

On a mobile device, on the other hand, the same layout makes it impossible for the customer to read anything; there is no way a customer could easily find the numeric code to actually copy it and paste it on a bank’s app to continue the payment flow, and the barcode showed in the bottom has no utility whatsoever due to the nature of the HTML.

To validate our theory that this layout wasn’t good for mobile devices, in 2017 we decided to test it out. We’ve created a simple Boleto template specific for mobile devices that would focus on making the payment flow easier for those customers.

Without being too complex or well thought-out, the conversion rate of our pilot merchants went up by 15% just by making sure the client could see what really matters: the due date, the total amount, the code, and the shortcut button for him to copy the code easily. The results we’ve got validated our assumption that the payment flow on mobile devices for Boletos is a huge problem.

Boleto EBANX 2.0

Our Boleto 2.0 was created to make life easier for both customers and merchants alike. Because Boleto Bancário was created before the internet, major banks had to simply adapt their apps to process payments in this method, which made the flow less than acceptable. Any particular bank can decide to handle it in a different way, but overall there are several ways a customer can pay for a Boleto Bancário with their bank app directly at the time of the purchase:
• Opening the boleto on a desktop computer and the bank app on their mobile phone, the user can scan the barcode on the desktop boleto with the bank app’s functionality on their phone.
• Copying the numeric code from the boleto and pasting it on their bank apps.
• Simply filling the numeric code from the boleto on their bank apps.
• On mobile devices, the user can choose to save a boleto as a PDF file and open it with their bank app that will automatically recognize all the payment information.

Some banks might allow all of these options, some only one or two, and some might not even allow any of them.

Because Brazilians buy online on impulse, we believe that having the easiest payment flow possible is key to maximizing conversion, which is why our new Boletos will bring at first sight every single information the customer needs to continue on their payment flow instantly, no matter the device they are using or what flow they prefer to go through with the payment.

Bottom line, paying for your purchase shouldn’t be a hassle, no matter the payment method you have available or which one you prefer to use. Our Boleto 2.0 makes sure customers can pay for their vouchers more easily, anywhere, anyhow, anytime, while providing a better conversion rate to our merchants. If you want to know more about this new feature, or what financial barrier we will be breaking next here at EBANX, come talk to us.

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