E-Commerce in Brazil Is Expected to Grow 4X Over the Next Few Years

August 11, 2017     By : Mariana Rodrigues

E-commerce is expected to increase more than fourfold in the next few years in Brazil, according to Worldpay, one of the leading payment processing companies globally.

E-commerce slice of GDP in Brazil is around from 1.5% to 2% of GDP. In developed countries like the UK, the slice is about 8.5% to 9%. Brazil has all the structure ready to reach these values with the use of smartphones, broadband internet and access to payment methods. We have no doubt that this is the future of payment in the Brazilian market,” said Juan D’Antiochia, General Manager of Worldpay for Latin America. The company will invest R$ 70 million to enter the acquiring market in Brazil, focusing on digital commerce.

Brazilian e-commerce market

More than 58,000 digital purchases were made per hour in Brazil in 2016. In that year, even with 4.2% of retraction of consumption compared to 2015, e-commerce grew by 11%. That’s because more and more Brazilians began buying online: the number grew 38% last year, according to a survey by Visa Performance Solutions.

E-commerce is expected to grow even more as 82% of consumers believe that most of their purchases will be made online over the next five years. To meet this demand, commerce and financial companies are adapting and creating new solutions.

New security solutions

Because online payment is very different from a face-to-face payment, in which the seller has contact with the buyer and can verify his identity, it requires a more complex verification system.

One of the Brazilian FinTech startups that have developed a solution to solve this issue is Konduto. The solution monitors all user browsing and purchasing behavior in an online store or mobile application and uses this data to calculate the probability of fraud in the transaction.

Konduto also gathers “basic” information of the risk analysis, such as geolocation, cadastral data, and characteristics of the device used in the purchase. By 2015, the company was tracking 1 million transactions monthly. It currently checks more than 4 million transactions per month and plans to reach 5 million by the end of this year.

Visa and Banco Neon have jointly launched a solution that is also focused on e-commerce. Now Neon customers receive a card for online payments only. Consumers may use it for online purchases like a credit card, with the purchase value being debited immediately from the checking account.

E-Commerce in Brazil Is Expected to Grow 4X Over the Next Few Years

Source: Banco Neon, Visa

One of the security measures developed for this card is selfie authentication, when banks’ system verifies whether the selfie corresponds with the photo of the registered document. The method replaces what in a face-to-face shopping would be the password for the chip card, so the customer does not need to memorize a password.

Worldpay invests R$ 70 million in partnership with Banco Rendimento

With an investment of R$ 70 million, Worldpay joined Banco Rendimento in July to enter the acquiring market. Worldpay is present in Brazilian e-commerce since 2014. According to Juan D’Antiochia, the company continues to focus online commerce, “because we believe that it is the market that will benefit most from this. Most of today’s payment solutions were thought out first for outlets and then they were adjusted for e-commerce. Our solution is born for e-commerce. That is our focus, although we can study omnichannel initiatives.”

This content was published in partnership with StartSe, a leading Brazilian website about startups. The portal contains the StartSe Base, the largest database of startups in the country, with more than 5,000 registered companies.

Stay Fresh on FinTech. Get our Daily Insights.

Mariana Rodrigues

Mariana Rodrigues

Mariana Rodrigues is a regular contributor to Let's Talk Payments and is focused on the FinTech market in Brazil.
Mariana Rodrigues