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Digital purchases made through cards grew 18.4% in Brazil in the first half of 2020; contactless purchases skyrocketed

In total, BRL 876.4 billion was spent via cards, of which BRL 173.5 billion was spent on non-face-to-face purchases, according to Abecs, the sector's association in the country

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Purchases made with credit, debit, and prepaid cards grew 3% in the first half of 2020 in Brazil compared to the same period last year, according to data released this Wednesday by Abecs, the association that represents the electronic payment sector. In total, BRL 876.4 billion was spent via cards, of which BRL 173.5 billion was spent on card-not-present purchases, that is how the sector calls the online card transactions, an increase of 18.4% over the first six months of last year.

At the end of June, remote purchases accounted for 35.5% of the total volume transacted by credit card. In general, a survey commissioned by Abecs for the Datafolha institute shows that internet shopping among card users increased from 47% in June 2019 to 67% in June 2020. In addition, 29% said they increased the frequency of this type of transaction during the COVID-19 quarantine.

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The volume of contactless payments (payments without contact of the card with the payment terminal, or even through devices such as bracelets and smartphones), also grew (330%) and reached a total of BRL 8.3 billion in the first half of this year.

The pandemic effects

In general, the Abecs data show a sharp drop in the value transacted via cards between March and April, and a recovery, pulled at first, in May, by retail, and then, in a second moment, in June, by the service sector.

“In the second quarter, the payments industry had a sharp drop in its total payment volume in relation to 2019, it was the first time that this happened within our historical series. The biggest loss occurred in the credit card (-11.9%), because it is also the type of card most used in general, and the mostly used in segments most affected by the crisis, such as travel, entertainment, electronics,” explained the executive director of Abecs, Ricardo Vieira at a press conference.

But, according to him, the recovery has already begun. “We are reviewing our projection models, and in two weeks we will have more consolidated data. But we believe that the industry will have a positive growth, around 3%, perhaps even greater than that, in 2020”.

The sharp drop in the second quarter also affected the growth of card-not-present transactions, as shown in the graph below. In January and February, before the pandemic reached Brazil, the total volume of these transactions was 31.4% and 28.9% higher, respectively, than in the same months of 2019. With the pandemic and the general drop in consumption, transactions non-face-to-face also grew less in March (10.5%) and April (5.8%). The recovery began in May.

In total, Brazilians spent BRL 540.4 billion (0.8% more than in the first half of 2019) via credit cards, BRL 323.2 billion (5.7%) via debit cards and BRL 14.7 billion (68.4%) via prepaid cards. There were a total of 10.5 billion card transactions over the this first semester.

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The pandemic emergency aid accounted for BRL 4 billion in transactions between May and June

The Abecs study separates the total amount of payments related to the emergency financial aid that the federal government created to mitigate the effects of the COVID-19 pandemic on the income of Brazilians.

According to the association, the emergency aid of BRL 600 moved an additional volume of BRL 4 billion via debit cards in the months of May and June in the country. If these transactions are considered, the result for the second quarter would rise to BRL 404.7 billion, making the drop registered in this period slightly lower (-6.8% instead of -7.7%). In the semester, with this scenario, the sector’s growth would be 3.5% (instead of 3%).