Navigating payments regulation in Brazil isn’t some quick task on your to-do list; it’s an ongoing process that requires consistent attention. Ask any payments leader in Latin America and they’ll tell you: “I solve one issue and a new one arrives just as quickly.”
“Custo Brasil” is unavoidable and it’s a real challenge for businesses, but the popular view that it inhibits growth isn’t entirely accurate. When you tackle Custo Brasil head-on and plan for its nuances early in your product development, it can help you develop a competitive edge.
Taking more of a “big picture” view of compliance in Brazil will help your business now, but the real benefits will show up in the years that follow. There’s a world in which Custo Brasil drives your business to be more efficient and resilient, and this is how you find it.
Custo Brasil in the context of payments
Custo Brasil isn’t a formal concept, nor is it just one thing. Translated to English, it means “Brazil cost,” and it’s shorthand for the various bureaucratic, infrastructural, and operational challenges of doing business in the country. Every business has its own experience, but the fact this phrase is commonplace tells us a lot about operating in Brazil.
Yes, it’s nebulous. Yes, it’s very real. You can find its fingerprints on many of the issues you face with scaling into Brazil. This, of course, includes payments, where there are three common flashpoints for Custo Brasil headaches you’re likely to encounter.
Firstly, managing personal and transaction data lifecycles. Under Brazil’s data protection laws, companies can be fined up to 2% (or R$50 million) of their sales revenue per infraction.
Secondly, tax preparation and reporting. The administrative burden of tax reporting in Brazil is the stuff of legend. Tax preparation time in Brazil is easily the highest in the world, taking 1,501 hours per year. That’s 46% longer than the next country and 845% longer than the average for OECD high income nations.
Thirdly, the need for scalable systems that can respond to consumer activity. Retail events, pay cycle behavior, and seasonal variations across the year mean you need to be equipped to handle huge spikes in sales activity. For context, instant payment platform Pix’s transaction volume on Black Friday 2024 was more than double the previous year’s.
The end result is a high-stakes, high-complexity environment that touches every step of your sales process, from start to finish. You can put out the fires as you go, or you can build resilient and flexible infrastructure to work with, not against, Custo Brasil.
Custo Brasil: In plain English
The additional workload created by Brazil’s complex infrastructure, bureaucracy, and regulations. The literal translation from Portuguese is “Brazil cost”.
Understanding the scale of Brazil’s payments ecosystem
To understand payments in Brazil, you have to understand one platform in particular: Pix.
The real-time payments system was launched by Brazil’s Central Bank in 2020 and has become the de facto standard for payments. Within two and a half years, 80% of the population had made a payment with Pix and, by 2024, 96.59% of the adult population was using it. (156 million out of 161,492,928.)
Pix hasn’t just established itself in the market, it’s done so with remarkable popularity. Users report high trust in its privacy and security and 69% of Brazilians say Pix is their most frequently used payment method.
With the Central Bank developing Pix Parcelado (a Buy Now, Pay Later product) and NFC contactless Pix payments, adoption and popularity will only increase from their already lofty heights. The only conclusion is that Brazil is a Pix-first economy.
Most of your customers are, by default, expecting real-time payments, at scale, regardless of the day or occasion. On the busiest days, transaction load will soar and your infrastructure needs to handle the added strain, managing rising volumes while maintaining the speed that consumers expect.
Resilient payments infrastructure becomes a battleground for conversion and revenue.
Preparing for predictable peaks
Across BF/CM 2025, hosting platform Vercel recorded Brazil as its fifth-busiest region worldwide. Traffic surges are not an anomaly in Brazil, they are baked into consumer culture and something you need to build for.
Domestic card payments: the elephant in the room
While boasting near-universal adoption, Pix is far from the only way to pay in Brazil. It’s created a preference for and belief in real-time payments, but debit cards (69.1% usage), cash (68.9%), and credit cards (51.6%) are also part of the payments mix for the majority of the population.
For brick-and-mortar businesses, card payments are fairly straightforward (hardware requirements aside). For ecommerce and other digital sales channels, it’s a much messier topic.
The heart of the problem is that issuing is dominated by domestic-only cards in Brazil. One report estimates that domestic-only credit cards make up 70% of the market.
Want to better understand whether Pix Automático fits your subscription model?
The full guide breaks down implementation, use cases, and best practices.
Everything You Need to Know About Digital Payments in Brazil
As a result, your payments infrastructure could fail to authorize customers with valid and funded cards. Your payment processor might promise the world, but if it routes transactions through a non-Brazilian network, it’s going to cost you revenue. For successful payments, you need a platform that intelligently routes individual transactions to the most appropriate rails. In Brazil, that means a rock-solid connection to local payment networks.
Local acquiring is the only way to keep up with the demand for real-time payments, arriving from a patchwork of payment methods.
Global commerce needs domestic awareness
A successful payment isn’t solely down to your customer having the available funds. How and where you route their transaction is just as important, which makes local acquiring in Brazil essential for revenue and retention.
Data protection upholds everything
Data protection laws have been one of the most impactful legislative developments of the last decade or so. Consumers have more rights regarding how their personal data is stored and used and companies face greater pressure to comply. Brazil’s General Data Protection Law (LGPD) is one such law, broadly comparable with Europe’s GDPR.
If you’re processing data of any kind or selling to individuals in Brazil, you’ll need to be aware of the LGPD compliance rules that govern data collected in Brazil.
LGPD gave the Brazilian National Data Protection Authority (ANPD) a host of powerful sanctions to use as enforcement. As well as sizable fines on a per-infraction basis, there are other non-financial penalties that can deeply hinder your business.
Under the powers of LGPD, the ANPD can also force your company to remove affected personal data, suspend the related databases, halt all processing activity of that kind, or even entirely prohibit you from processing personal data.
Put simply: Poor personal and payment data governance could result in you being banned from processing any payments for a period of time.
The risks are too great to blindly trust your payments regulation compliance to a PSP. Instead, you need actively managed and iterated systems for data auditing, access control, minimization, and retention.
Costs and laws change with the seasons
Under the umbrella of IOF (Tax on Financial Transactions), Brazil charges a levy on a variety of financial operations and instruments. It’s a federal tax, which can be amended without notice by presidential decree. When selling in Brazil, you have a permanent exposure to cost volatility and compliance challenges.
In May 2025, Brazil’s federal government published Decree 12.466/2025. The Decree increased tax rates on key credit and foreign exchange transactions. For example, the rate levied on general outbound foreign exchange transactions rose from 0.38% to 3.5%. These changes were introduced as part of an attempt to keep spending under control and help the government meet its fiscal targets. IOF taxes are a macroeconomic and political plaything. Individual businesses can only observe and respond.
When policies and costs are this volatile, rigid or narrow systems increase your chances of IOF tax issues. If you’re processing cross-border payments in Brazil (of any kind), the best insurance is financial infrastructure that offers scale (e.g. dynamic routing and settlement paths) and the agility to adjust without needing customers to reauthorize.
Protection from volatility
Policy changes can interrupt your payment routes. If you use a fixed payment process, you have to decide between eating into your margins or forcing customers to reauthorize with a new process.
Alternatively, a flexible payment orchestrator stops the interruption reaching you or your customers at all.
The practicalities of designing for Custo Brasil
The CliffsNotes for Custo Brasil is along these lines: It’s a unique environment in which changeable costs, responsibilities, and policies can create a different problem each week. By association, building your business to navigate Custo Brasil is a multifaceted challenge.
What this looks like will vary from business to business, but there are some fundamental steps you can take to mitigate the worst effects of Custo Brasil. They can even turn the weight of payments regulation in Brazil in your favor.
Build for multiple rails (without multiplying complexity)
While Pix has taken Brazil by storm, it’s not created a unified B2C payments environment. In fact, it’s added one more method to an already muddled palette and raised performance expectations.
With the right payments partner, building a checkout flow to route payments across multiple rails is elementary. It can be done automatically, based on logic around payment methods, geography, values, and overall transaction load.
We’ve written before about the 20% cost of payment friction in Brazil. Variable payment rails are a key part of solving this.
With Spreedly, intelligent routing and retries are baked into our Connect and Optimize products.
Changing providers without changing the customer experience
With a single payment provider, moving from their payment gateway to another means a total checkout rebuild, customer reauthorization (and the inevitable churn that comes with it), and a significant strain on resources across your company.
Credentials, transaction logic, acquiring, fraud prevention, and routing are all held in a single point of failure. It’s a recipe for disaster and it’s entirely preventable with payment orchestration. All authorization, personal data management, and other permissions are tied to the orchestration platform, not a specific gateway.
With products like Connect and Vault, you can protect credentials and transaction logic in a neutral layer, while evolving your acquiring, fraud, and routing in the background. Why commit to a single gateway when you can switch between 140+?
Compliance isn’t a checklist, it’s an operating principle
Privacy laws have turned data compliance into a mission-critical part of business. Brazil might be the perfect example, with its wide-reaching LGPD legislation and accompanying penalties.
The time and money you invest in creating bulletproof, repeatable systems for managing the full lifecycle of customer data will be worthwhile. You can learn that the hard way, but it’ll be much less trouble if you take our word for it.
Payment data is a vital part of your data management, as it relates to both consumer privacy laws and taxation. With that in mind, ownership of and access to your transaction data is non-negotiable. Tax compliance in Brazil is infamously complex and your obligations can change at the whims of the federal government.
Resolve gives you end-to-end reporting, an advanced dashboard, and analysis tools across every payment gateway.
Designing your systems for peaks, not the average
Good infrastructure keeps things running smoothly day-to-day. Resilient infrastructure keeps things running smoothly on the busiest days and the quietest days.
Think of it this way: When Black Friday or mid-December arrives, you can funnel everyone down the widest path and cross your fingers or you can keep routing payments with transaction-specific logic.
Whatever the case and whatever the day, these annual peaks should never catch you by surprise. They are predictable and consistent patterns of retail activity. Building systems (from website hosting to payment processing) that can handle these spikes is as sensible as installing CCTV at your warehouse or buying insurance.
The best place to start is understanding data points like your approval rates by payment method and latency at different volumes. From there, you can plan for peaks with confidence.
Optimize’s failover, intelligent retries, and smart reconciliation are the foundations of a flexible, resilient payment system.
Tackle Custo Brasil head on and the benefits are vast
Transplanting your US or European infrastructure to Brazil is the simple choice. It’s also the fastest way to fail. Custo Brasil, unique and sometimes-frustrating as it is, won’t change any time soon. If your team builds for it rather than against it, you’ll create the conditions for success.
It’s certainly not easy. Consumers expect real-time payments for wallets, domestic and international cards even at the busiest times. Taxes are changeable and reporting is burdensome, while data protection sanctions are a constant threat.
And you’re in the middle of it all, doing your best to juggle Custo Brasil while protecting and promoting your business. It’s a lot to manage on your own, which is why reliable payment orchestration in Brazil is so valuable.
The right payment orchestrator will help you turn an administrative burden into a brilliantly built retail engine. From there, you can scale into Brazil with confidence.
.png)