Reaching Consumers Via Credit Cards: A Real Problem In Brazil

Reaching Consumers Via Credit Cards: A Real Problem In Brazil

This post is written in partnership with the Getting to Global Initiative at

Online retailers trying to reach global consumers can often be frustrated by the different characteristics of transactions in individual countries, whether large or small. Consider the case of Brazil, a country with the fifth largest population and the ninth largest GDP in the world, according to 2016 statistics from the World Bank.

In the first of a series of interviews, GoInterPay VP of Business Development (and friend of Getting to Global) Matthew Cannon explains that although a relatively high rate of online transactions in Brazil are paid via credit cards, Brazilian consumers can be hard to reach for global retailers who haven’t set up local payment solutions. Matt explains why here:

Among online transactions conducted via credit cards by Brazilian consumers, more than two thirds use so-called “national cards.” Those cards only accept transactions using local currency, the Brazilian real, and may only be processed through Brazilian banks.

For a retailer based elsewhere — in the U.S., for example — which doesn’t have a local payment solution in Brazil, there is no way to process a credit card transaction with a consumer who has only a national card. That translates to lost business for retailers, even when consumers want to complete a transaction.

Even when consumers do have international cards, there can still be hurdles to overcome. Of the roughly 30% of online transactions that do involve international cards, their issuing banks charge high foreign exchange transaction fees that can discourage purchasing. Moreover, the Brazilian government levies the Imposto Sobre Operacoes Financeiras (IOF) tax, a 6.38% tax on cross-border transactions.

Every country is different, but the case of Brazil illustrates many of the issues retailers frequently have when they seek to globalize. Given its high population, which has surpassed 210 million people, and its massive GDP, which has exceeded $2 trillion in recent years, Brazil represents a huge opportunity for growing merchants who hope to gain access to a burgeoning market. But without a local payment solution to overcome systemic barriers to doing business, retailers can easily leave money on the table and fail to reach consumers who want to buy what they’re selling.


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