The Brazilian payment market and its specifics: An interview with Ralf Germer

Abstract

Brazil, with its almost 204 million inhabitants, is the world’s fifth most populated country and also number five in terms of geographical size. It has the seventh largest economy in the world, with 40 million middle-income class consumers and 120 million internet users; there are only four bigger country markets in the world, and Portuguese is the fifth commonest language on the internet. Brazil has a modern banking sector, online and mobile banking is widely used, and banks are present even in the most remote areas of the country. But there are still 55 million unbanked Brazilians, which is 40 per cent of the adult population. Overall, Brazil has a very high rate of electronic payments usage in relation to cash, which is expected to reach 32 per cent in 2015. International businesses usually start monetising their e-commerce traffic from Brazil by processing credit cards from overseas. What they typically get are awful decline rates of up to 75 per cent. The main cause for that is the fact that around 70 per cent of all credit cards issued in Brazil, even Visa or MasterCard labelled, are limited to local payments in Brazilian real. Because of currency restrictions imposed by the Brazilian legislation, international card acquirers cannot process these. Apart from that, other local payment methods, such as Boleto Bancário, local debit cards and online banking transfer, account for close to half of all online transactions. In this interview, Ralf Germer, CEO of PagBrasil, explains why, by teaming up with PagBrasil, international merchants can overcome these hurdles.