Cybersource: Brazil’s Great Digital Payments Leap

Pre-pandemic, Brazil was a place where commerce was, by and large, a physical activity, and cash was still king when it came to making those physical payments.

Then the pandemic appeared, and Brazilian consumers, like shoppers worldwide, were forced to adjust their commerce habits to the needs of a new world where being there in person lost a lot of its appeal nearly overnight. According to the Global Digital Shopping Index: Brazil Edition, a collaboration between PYMNTS and Cybersource, a Visa solution, Brazil is digitizing quickly despite the fact that when compared to the other markets PYMNTS has studied thus far (Australia, the United Kingdom and the United States), income levels and access to digital technology are more limited.

But as the research demonstrates, necessity is the mother of invention everywhere — and the great digital wave, judging by the data, is sweeping through developing Brazil quickly and irreversibly.

“Things were coming before the pandemic, but when the pandemic came, it turbo-boosted the timeline,” Fernando Pantaleão, head of Merchant Sales and Solutions for Brazil, told Karen Webster. “They are developing solutions to offer better purchases experiences to consumers, how to improve the physical stores to be kind of physical, but also omnichannel. Digital is booming in terms of opportunities, and everybody wants to listen to a FinTech or a company that has something to improve the shopping experience. And it’s never going back. We’ll never come back to the same situation we had before because I would say that we jumped forward five years.”

The story in the data is clear, he said — Brazilian consumers have rapidly rewired themselves toward digital thinking and are expecting the merchants they interact with to jump on board and be serving them that way. As the data demonstrates, the Brazilian consumer is changing. Known for being cash-centric, the country’s the use of cash dropped by a whopping 25 percent in 2020 while card payments increased by more than 8 percent. The reason for that, Pantaleão noted, is clear enough. The pandemic shut down physical stores, making cash harder to spend, and people’s enthusiasm for handling cash plummeted, as cleanliness issues around cash are long established.

Moreover, he said, cashless digital options are advancing and multiplying. Real-time solutions — like WhatsApp’s just-launched peer-to-peer (P2P) solution with Visa — are now live in Brazil. Cybersource is working closely with payment facilitators to bring even more small- to medium-sized businesses (SMBs) into the digital era and surface more innovative payment methods like QR codes and tap-to-pay payment methods.

“The phone is being fully engaged by almost 100 percent of the acquirers in Brazil because it is something that is very, very cost benefit positive,” Pantaleão said. “With these solutions, you can choose to target smaller and smaller merchants.”

Targeted Tech

That targeting, he noted, is enhanced by matching technology on offer to the specific needs of the locale. In Brazil, for example, a technology called payment link has been particularly helpful in pulling smaller merchants into the digital transformation simply and painlessly. Payment link does exactly what it sounds like it does — allows merchants (physical or digital) to shoot their customer a link via email or text that they can click on and pay from their device. This simple technology makes a big difference because, when paired with tokenization, it gives consumers a way to pay in a tap simply, seamlessly and, most importantly, completely safely.

It’s a big change, he said, particularly for merchants who have only ever operated in the physical world, and a jump that many won’t be persuaded to make unless they can also be shown that they can safely land.

The changes aren’t finished for the Brazilian market, he said — quite the opposite. The five years forward leap the market has made means the changes in many ways are just getting started. Brazilians will go back to the physical store, but like consumers worldwide, they won’t be returning as quite the same shoppers they were when they left. They’ll return to physical stores looking for more digitally integrated experiences, like being able to find product information within an app while they shop, for example, or a fast self-service contactless-based checkout. It’s about integrating rewards and cash back offers so they are easily accessible at the consumer’s fingertips whether they are shopping online, in-store and at any point in between.

“This space is now booming in terms of opportunities to build what everybody needs to transform the commerce opportunity for the digital world,” Pantaleão said.

While he admitted he lacks a crystal ball and can’t say exactly what’s coming next, the trend of the market is for more. Digitization, the new data demonstrates, isn’t slowing down; it is speeding up. That’s something Pantaleão said he expects to see continue apace as consumers and merchants alike are remaking themselves and their habits for the next era of commerce that is unfolding all around them.

It’s an era, he noted, that will continue to become “contactless and totally digital in the omnichannel kind of way.”