Every conversation about payment methods in Brazil begins with it: the boleto bancário (normally translate as cash voucher or bank slip). It is through this famous payment method that Brazilians pay their bills and make purchases. It is part of the country’s routine and neither the significant increase in the number of smartphones nor the penetration of the internet has affected its protagonism. In other words, it is not possible to talk about e-commerce in Brazil without talking about the slip.
The Beyond Borders Research 2018-2019, conducted by the global fintech EBANX, mapped the behavior of Brazilians in relation to international purchases. The study identified that, by necessity, by choice or simply by habit, the boleto is one of the most widely used payment methods in the country.
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For the analysis, 3,000 Brazilians from different regions, ages and socio-economic conditions who bought on international websites within 12 months before September were interviewed. Results show that 51.5% of respondents used the boleto to pay for foreign products and services. Among those who made this choice, 53% had a credit card.
To exploit the full potential of the Brazilian market, the boleto is almost mandatory. And while the relevance of this method may seem archaic to outsiders, a close look at the local market configuration and the culture of the Brazilian consumer allows us to understand its importance to the country.
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Need and habit
The familiarity between Brazilians and the boleto is not limited to regions, generations and purchasing power. The numbers reinforce this intimate relationship: the slip is present in 17% of e-commerce transactions in the country, equivalent to $ 6.1 billion. At least two aspects explain this preference: one structural in the Brazilian market and another linked to consumer culture.
The structural aspect concerns the bankarization rates, which shape consumption patterns in Brazil. According to the Global Findex survey, 70% of Brazilians had an account with a financial institution in 2017, and that does not mean that the 30% debarred have no purchasing power. According to data from the Locomotive Institute, they move $ 204 billion in the national economy each year. More than a payment method, the slip represents the breaking of consumer barriers and their access to services and products via international e-commerce.
The Beyond Borders survey found that the choice for boleto is also significant among consumers with a checking-account: 53% of respondents who decided to pay with the voucher had a credit card. This behavior largely reflects not only the reduced limit to which Brazilians have access to the card but also the cultural aspects of the local consumer.
Brazilian startup Juno, which facilitates payments by boleto, works directly with Brazilian business owners and consumers who use the cash voucher. For Juno’s Planning Head, Henrique Foryta, one of the aspects that explain the relevance of the ticket is the consumers’ perception that it is safer than a credit card transaction on the Internet.
“For online shopping, there is a data-security audience unsure about putting card data on a site they may not trust so much, because of this hyped-up news that it can be passed on and that the fraud rate is high. This feeling ends up diminishing a little with the boleto because there is no risk of credit card cloning”, he explains.
The Beyond Borders survey numbers reinforce this sense of security. Among those who chose to pay via cash voucher, 53% printed the boleto and paid it at the lottery retailer, and 45% used banking apps on their smartphones. For the Brazilian consumer, besides the practicality, the printed slip represents control. “This has to do with Brazilians’ cultural issue of having control, of being able to have a physical reminder–in a diary or folder–of what they have to pay and schedule for their month”, says Foryta.
Differently from what one might think, increased connectivity in the country does not affect the relevance of the boleto. In 2018, the number of slips paid via smartphones reached 1.4 billion, up 52% over 2017. As the chart below indicates, reconciling the country’s growing connectivity with Brazilian consumer habits is the key point to explore the largest market in Latin America.
From the point of view of those who offer services and products in Brazil, Foryta explains that the slip is seen by businessmen as a kind of “guarantee” that the customer will make the payment. “They [entrepreneurs] speak of this preference for the slip mainly linked to specific market verticals, such as education, with payments more tied to monthly fees. This makes the customer not forget to pay because he will have a physical booklet in hand. A printed paper passes a greater formality of the business”, he says.
The sense of security and control is also crossed by a generational aspect, according to Foryta. Although people of all age groups use the boleto, older consumers tend to opt for the cash voucher more often.
“When we say that it [boleto] communicates more security, which is more comfortable for the organization, we are talking about factors perceived differently by each generation. Nowadays, if you ask an older person who lived in a non-credit card era about online data security, they are more likely to be scared than a 30-year-old”, he says.
Among young consumers, the boleto is often the only payment method available for purchases on international sites. The Beyond Borders survey found that the average age of unbanked people in Brazil is 31 years old and that 40.6% of those without bank accounts are between 18 and 24 years old.
Even without ties to a financial institution, consumers of this age group are deeply familiar with the internet and are willing to buy from international websites as long as they offer payment methods that are compatible with their reality.
Foryta points out that in recurrence markets, entrepreneurs tend to opt for the credit card, but that the boleto becomes virtually indispensable in some verticals with a higher average ticket, such as education. At this point, the generational aspect also justifies the relevance of the cash voucher.
“Generally, courses are expensive and the tendency of distance learning is to offer payment by credit card (ie, a non-presential). But the ones looking for a course are not late-career professionals, they are beginning their professional lives, and sometimes they don’t have a 5 to 8 thousand reais limit to make it in installments”, he explains.
Even in the most modern initiatives and permeated by technology, the boleto is present. An example is Nubank, a Brazilian digital bank with more than 15 million customers. One of the facilities offered to users is the ability to generate personalized slips as an alternative to bank transfers, facilitating transactions between friends, for example.
This adaptation effort indicates that more than importing ready-made strategies, prospering in Brazil is synonymous with adapting to the local consumer. Entering the largest market in Latin America may be an option, but succeeding in it depends on the ability to understand the needs and behavior of Brazilians. In this respect, the bank slip is indispensable.
Translated by Jennifer Ann Koppe