How to Stop Losing 20% of Your Revenue to Local Friction in Brazil

You’re looking for ways to expand your business into new territories. You discover that Brazil is the largest digital economy in Latin America. You realize just how massive this opportunity is with the digital payments market set to grow by $304.95 billion between 2024 and 2029, accelerating at a 25.5% CAGR. 

This monumental growth is all about one thing: Pix, the Central Bank of Brazil’s (BCB) instant payment system. Pix transactions have already surpassed both debit and credit card volumes by 80% and that’s nothing to sneeze at. 

The secret to success in Brazil is simple. You’re going to have to change your way of thinking and adopt a localized payments orchestration strategy. 

In this article, we’re going to walk you through the specifics of the Brazilian landscape and show you how to start converting that lost revenue immediately.

What causes local payment friction in Brazil? 

Checkout friction is anything that stands between a customer and them making an online purchase. The remedy for checkout friction is, in general, to simplify the checkout process. 

In Brazil, checkout friction is the massive, unique gap between the smooth digital experience the country promises and the actual performance you see on your checkout page. It exists, primarily, because nearly all consumers in Brazil have experienced at least one type of payment issue during their latest purchase.

Checkout friction in Brazil is generally caused by one of three core factors.

1. Technology
   Two-thirds of all payments in Brazil are affected by processing errors.
   
   
2. Trust
   A whopping 32% of Brazilian shoppers manually enter their payment details for online purchases. This number is 1.5 times the global average and it shows a huge lack of trust in merchants to securely store payment credentials.
   
   
3. Regulation
   The BCB actively works to strengthen the domestic ecosystem and block global “big tech” players from entering the immediate payments market. This creates friction for multinational players accustomed to global payment rails.

Your localized payments orchestration strategy is going to be all about the technology you need to solve all of these problems.

The benefits of adopting a localized payments strategy in Brazil

You can’t ignore the realities of payment friction in Brazil. Doing so is really just a decision to cap your revenue and limit your growth. 

To really dive into the Brazilian market, you’ll want to use an open payments platform that allows you to orchestrate every aspect of your payments tech stack. And when you do so, you’ll get the five following advantages over your competitors.

You’ll get access to the uncarded Brazilian market

Pix has opened up the market to financial inclusion, creating a vast new segment. Approximately 60 million Brazilians use Pix but do not own a credit card. The new Pix Automático for recurring payments is your only way to sell subscriptions, SaaS, and streaming to this massive, uncarded customer base.

You’ll have the tools to boost your authorization rates

Localizing your transaction routing is a critical performance advantage. Local acquirers have better relationships with domestic banks. We’ve seen global digital retailers enter the market and route Brazilian transactions through a local gain significant lifts in authorization rates. This is something that everyone entering the market should be willing to do.

You’ll slash your Brazilian transaction costs

Pix is cheap. The average cost of a Pix payment to a merchant is only 0.22%, drastically lower than the 2.2% average credit card fee in Brazil²². You’ll gain a strong competitive edge by integrating and promoting Pix usage²³.

You’ll have a payments tech stack that is ready for future changes

The Brazilian market is highly fragmented with innovations like Pix Automático and NuPay rolling out at different times by local providers. A single orchestration connection allows you to instantly adopt every new local payment method, mitigating fragmentation and lock-in risk. 

You’ll master recurring revenue models

The new Pix Automático is projected to move over $30 billion in online payments within its first two years. Recurring revenue models are perfectly positioned to benefit from this, helping you conquer the subscription and streaming sector^.

How to get a better understanding of Brazil’s payments components

You need authentic data to understand and conquer the Brazilian market. Generic global insights will not cut it. Here’s how you can dig in and get the information you need to be successful. 

Do your research at the source

Here’s something that businesses overlook all too often. You can get the best information directly from your customers and local payment experts. You’ll gain authentic, high-value insights this way. 

Talk to your Brazilian customers to learn the exact language they want you to use when a payment fails. Find out if they mention "Boleto" or "Pix" and what pain points they articulate about cross-border cards.

Internal collaboration will get you the answers you need

Leverage the knowledge within your own company. Your customer support and sales teams are on the front lines, dealing with failed transactions and hearing the language of customer frustration. 

Your product team needs to understand the technical constraints of asynchronous payments like Pix Automático. These internal teams provide different, crucial perspectives on market acceptance and technical requirements.

Set up some meetings between the two teams to make sure you take that information out of silos and have it shared with everyone who needs it. 

Dig into your data analysis and review your existing metrics

Review your existing data to uncover patterns of behavior and customer needs. Look at your analytics to see where a customer is dropping off in the checkout flow. A high drop-off rate for an international card entry page signals a clear need to prioritize local payment methods. 

You have CRM data, right? Use it to track the high rate of card re-entry among your Brazilian customers. The answers will allow you to optimize your checkout page for the best results.

Building your Brazilian payments strategy on local foundations

Your successful strategy for Brazil is going to be  built on two key local foundations: Pix and the installment culture.

The most important attributes of this market structure are the dominance of local methods and they need to be included in any successful strategy. 

Pix and Pix Automático

This is the real-time payment juggernaut that is now used by nearly 90% of Brazilian adults. It has revolutionized transactions and drives financial inclusion for the 60 million uncarded consumers. The automatic version is key for recurring revenue.

Installment Payments (Parcelamento)

The deep-rooted consumer habit of splitting purchases into multiple, often interest-free, payments is a defining feature of the market. Credit cards still account for 40% of e-commerce, driven by this installment culture⁴². New solutions like NuPay and the planned Pix Garantido are evolving this habit.

You should not overly focus on Boleto Bancário. While it is widely accepted, it is not an optimal solution. The reason? Payment compensation can take up to two business days⁴⁴. The speed and superior conversion rates of Pix make Boleto a secondary, non-essential option.

Putting it all into action 

You’ve gathered all the information, now it’s time to put it into action. Your goal is to apply your new, data-backed understanding of the Brazilian market to every part of your payments stack.

Using data to establish pain point solutions

Use the gathered data to inform your decisions about what to focus on. You know that a primary pain point is the friction and security concerns around manual data entry. Your strategy must prioritize portable vaulting  and the secure storage of payment credentials to build consumer trust. Focus your strategy on adopting Pix Automático because it allows you to access the massive uncarded market for recurring services.

Localized messaging and copywriting for Brazilian payments

The data is essential for creating specific, targeted, and effective language in your checkout process. Do not call it "Instant Payment." Call it "Pague com Pix" because you know that is the local, trusted language⁵³. 

Like everywhere else in the world, you’re going to want to use clear, reassuring copy around data security to overcome the consumer trust deficit that leads to manual entry⁵⁴.

Make sure you’re using your data to optimize every part of the checkout stage, and reassure your customers along the way. 

Your new distribution and channel strategy

The data plays a critical role in deciding where to publish content and how to adapt it⁵⁶. Brazil is a global leader in mobile shopping adoption and social commerce. Your content and checkout process must be optimized for mobile-first engagement, prioritizing digital wallets and fast checkout experiences.

Choosing the right local partner

Implementing a localized payments orchestration strategy is a smart business decision, but you’re not going to be able to execute it alone. Success in a market as complex and fragmented as Brazil demands a partner that has deep local expertise and a proven track record.

This is where the power of an open payments platform meets the necessity of local market mastery. Spreedly acts as your neutral orchestrator, providing the flexible technical layer you need for routing and tokenization. We leverage key partnerships to ensure your transactions move along the most optimized local rails.

Our strategic collaboration with EBANX provides immediate, high-performance access to the entire Latin American market, with a special focus on the dynamism of Brazil. EBANX is a technology company with Latin American DNA that specializes in connecting global businesses to local payment methods across 17 countries in the region.

Here are three ways this new partnership will help you succeed. 

Instant adoption of local innovation

You’ll get immediate access to critical local payment methods, including Pix, e-wallets, and the vital installment-based credit card options. EBANX is a pioneer in the Pix Automático solution, which means merchants using Spreedly can be ready to capitalize on the recurring payment feature ahead of the competition. This structure future-proofs your stack against market fragmentation.

Optimized, high-conversion rail 

EBANX specializes in overcoming the exact cross-border challenges that cause high decline rates. By leveraging their proprietary technology, direct local integrations, and deep connections with local banks, merchants see higher transaction success rates. This is how you close the revenue gap caused by international card failures.

Comprehensive support and scope

The collaboration covers all of Latin America, allowing companies like Busbud and Rocket Travel by Agoda to offer payment solutions tailored to local consumer preferences across multiple regions. You get the security benefits of Spreedly's tokenization layered with EBANX’s AI-powered fraud prevention and regulatory compliance expertise. You get both the control of orchestration and the necessary local intelligence.

With this powerful combination, you move beyond simply processing payments. You’ll actually gain the strategic advantage necessary to offer a truly localized experience that builds consumer trust and captures the massive growth of the Brazilian digital economy.

Winning in Brazil with a new partner in payments

Brazil's market is a paradox. It offers massive growth potential, but it will punish any business that relies on old, cross-border payment methods⁵⁹. Your ability to execute a localization strategy that masters Pix, controls the installment culture, and overcomes market friction is the only path to capturing the $304.95 billion opportunity.

You’ll need to implement a flexible orchestration infrastructure to future-proof your growth. Spreedly acts as a neutral orchestrator, providing the single connection you need to instantly adopt local APMs like Pix Automático via partners like Ebanx.

Take your new understanding of the Brazilian payments friction points and begin applying a localized orchestration strategy today. 

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