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Boleto Bancário: What it Is and How it Works

Last week, Payza announced that we added Boleto Bancário as a payment option for Brazilian users, along with the addition of the Brazilian Real as a supported local currency. While Payza members in Brazil rejoiced at this new option for loading their e-wallets, merchants outside of Brazil may be scratching their heads, wondering why this is a big deal and how it can help them.

Colloquially known as Boleto, meaning ticket, Boleto Bancário is the most popular solution for invoice payments in Brazil. Regulated by the Brazilian Federation of Banks (FEBRABANK), Boleto is connected to the Brazilian Payment System (SPB), a set of tools, procedures, and regulations which support financial transactions between the Brazilian market and economic agents. SPB serves to safeguard the economy and prevent security breaches.

Boleto tickets, which are similar to invoices, are documents issued by financial institutions in Brazil. A Boleto enables your customer to a pay you an exact indicated amount within a specified due date by simply visiting any bank, post office or lottery agency in Brazil (and even some supermarkets). The invoice can even be paid via online banking through most Brazilian banks. The agent simply collects the payment from the customer and issues it to the merchant.

Boleto Payments Carry Low Fraud Risk and No Chargebacks

Of particular interest is how both consumers and businesses, and members of the banked and unbanked populations, have embraced this payment method because of its ability to minimize fraud and avoid risks of credit card chargebacks. This makes Boleto and ideal vehicle for online payments, customers know their private information is not at risk and merchants won’t have to worry about “friendly fraud.”

Brazil is a high-growth, $20B e-commerce market, attractive to cross-border investors but dominated by local payment options. 63% of consumers don’t own an international credit card and 40% of credit card users avoid using their cards online due to fraud risks. That means just a mere fraction of the Brazilian population will opt to use credit cards for their online payments.

Despite this, most local merchants do not yet offer Boleto as an online payment option.

Even though the majority of e-commerce merchants don’t accept these payments, Boleto already holds an 18% share of the e-commerce market, making it the most popular online payment option in Brazil after credit cards.

Boleto is popular for a number of reasons:

  1. Boletos are available to all Brazilians, regardless of their credit rating or access to a bank account.
  2. Consumers can pay for their Boletos either by cash or card, both online or in-person.
  3. Boletos can be used for installment payments, a common payment choice in Brazil.
  4. Brazilians are concerned about fraud risks associated with a credit card.
  5. Low fraud rates and no chargeback risk increase e-commerce confidence for merchants and consumers.

Because of these benefits, supporting Boleto can be a major competitive advantage for cross-border merchants selling to Brazilian consumers, but the integration process can be complicated.

Thankfully, now that Payza accepts Boleto payments, cross-border merchants no longer need to integrate with Boleto – Payza takes care of the whole process. Your Brazilian customers will have the option of paying via Boleto, while you receive your payment directly in your Payza account. This means that your customers in Brazil have more payment options available to them and your business gains access to a payment option designed to be more fraud-proof than credit card transactions.

With Boleto, Payza allows you to receive money directly from Brazilian bank accounts, without needing a local banking partner, and without the risk of fraud. As a merchant, this new option allows your business to reach a largely under-served community of Brazilian consumers.