If you are serious about expanding your online business outside your domestic market, you must consider local differences. Five key pillars of successful business expansion are local
- Delivery (if you are selling physical products)
This post will talk about local payment methods and specifically about 🇧🇷 Brazilian Boleto Bancário. Although the general worldwide usage of Credit/Debit Cards is increasing, you really need to have these to boost your conversions. In fact, only 40% of people in Brazil have access to international Credit Card.
1. What is Boleto Bancário?
Boleto Bancário is a cash payment that is extremely popular in Brazil. Simply because many locals don't have a Credit/Debit Card, the only way to pay for your services/products is cash.
And out of those few who have a Credit/Debit Card, only 60% use it for online purchases. Since the order is fulfilled after the vendor receives the payment from the client, it is considered an offline/delayed payment method.
According to Brazilian Wikipedia, around 3.6 billion Boleto receipts are generated each year. First, Boleto was launched back in 1993. The most significant advantages have access essentially to all customers in Brazil, low fraud and no charge-back rates, and increasing the general trust of your online business.
By adding Boleto Bancário payment to your store, you can expect a conversion increase of around 30% to 50%. However, you need also to start monitoring paid vs. unpaid orders (see risks section below).
2. How does it work?
The customer selects Boleto as a payment method during the checkout process. On the order confirmation page and in the e-mail, he will get a URL for his unique Boleto receipt, which looks like on the image above.
The key on the Boleto is the unique barcode (código de barras) at the bottom and the serial number at the top.
The customer needs to print it or send it to a mobile phone, go to the bank/supermarket/lottery agency/ATM with the receipt and pay for it in cash.
Alternatively, online banking can be used to clear Boleto.
The vendor is fulfilling the order once he successfully receives the payment from the bank. It typically takes around 3 to 5 days.
See more details in the YouTube video from EBANX below, which explains Boleto in 2 minutes.
3. How popular is it?
Over 3.6 billion Boletos are generated during the year. The most significant advantage is that anyone in Brazil can use Boleto to make a payment. But Boleto's share is constantly decreasing as more and more people in Brazil are becoming aware of online payments with cards or PayPal.
However, it is a Brazil-only payment, and it can't be used anywhere else in the World. There are similar Boleto-alternatives in other markets in South America, like Oxxo Cash in Mexico.
In our experience, the current share among other payment methods in 2021 is around 40% on the orders generated and approximately 20% on the orders paid.
4. What are the risks/disadvantages?
First, you need to realize that many customers in Brazil are creating orders with Boleto but never pay for them. On average, this is around 50% of customers. Therefore this will totally mess up your web analytics data as you will see a nice uplift in revenue in Google Analytics and Shopify reports. Still, the actual revenue coming from Boletos is only half.
To improve the Boleto success (clearing) rate, we recommend using a payment reminder solution like Payster. It will automatically send up to 3 e-mails to the customer and ask him to pay the Boleto.
Boleto also adds additional load on your customer service as many customers are asking about the order status, why they hadn't received the product when they paid a few days ago, and so on.
5. How to add Boleto to my Shopify store?
Implementing Boleto into the Shopify checkout is pretty straightforward.
- Go to your online store admin > Settings > Payments
- In the section, Alternative payment methods click on Choose alternative payment
- Filter the Boleto payment using the payment methods filter and pick one of the providers (EBANX, dLocal, or Paymentwall)
Please note that using an alternative payment provider will cost you an additional 2% as a transaction fee (if you are on Shopify Basic plan).
If you are running in-house checkout and payments, you will need to register an entity in Brazil to generate Boletos. The simplest way is to use either a payment gateway (Adyen, EBANX, Allpago) or a fully outsourced solution (Digital River, dLocal).
Once you integrate through API with the Boleto provider/bank, it should appear as a standard payment method next to Credit Card and PayPal. Just make sure you won't fulfill the order until you successfully receive the payment.