How to accept credit cards in Brazil: Everything you need to know

Brazil ranked as the 26th country in the world based on credit card penetration in 2021, the highest percentage found within Latin America. Its credit card penetration rate, comparable to that of France, underscores the widespread use and acceptance of credit cards across the country^[1]. As such, credit cards have become a dominant payment method for online transactions in Brazil.

However, despite their popularity, processing credit card payments in Brazil involves specific considerations that businesses must understand to operate effectively in this market. In this article, we’ll overview the credit card landscape in Latin America’s largest market and cover everything you need to know about this payment method in Brazil. Let’s dig in!

Credit Card Usage in Brazil

Credit cards are the dominant payment method in Brazil, capturing a significant 38% of the market share^[2]. Their popularity stems from the convenience and flexibility they offer, especially with the widespread use of installment payment options. Brazilians often use credit cards to make larger purchases more manageable by spreading payments over several months.

This method is particularly favored for online shopping, where credit card usage is even more pronounced. Additionally, many Brazilian consumers are attracted to the rewards and cashback programs offered by credit card issuers, further solidifying their preference for this payment method.

Brazilian Credit Cards: Particularities to Consider

Although Visa and Mastercard are the leading credit card brands in Brazil, cards issued locally are often restricted to domestic purchases in Brazilian real (BRL). Even when Brazilian consumers have credit cards enabled for international transactions, they generally avoid using them for purchases processed outside Brazil. This is due to the high costs associated with such transactions, including a 5.38%^[3] tax on international financial transactions and an exchange rate markup of up to 7%. These fees can add up to approximately 14% in additional costs, making local payment processing crucial.

The Importance of Local Payment Processing

Given the unique challenges of the Brazilian credit card market, such as restrictions on international transactions and the prevalence of installment payments, partnering with a local payment processor is essential for businesses operating in the country.

A local payment processor can simplify the complexities of the Brazilian payment landscape by:

• Navigating local regulations: Ensuring compliance with Brazilian financial laws and regulations.
• Processing transactions efficiently: Handling payments in Brazilian Reals (BRL), avoiding costly currency conversions and taxes.
• Offering preferred payment methods: Providing access to popular local payment options, such as installment plans and digital wallets.

At the heart of a seamless shopping experience lies a robust payment gateway. This digital infrastructure acts as a trusted intermediary, securely processing payments from various sources, including credit cards, debit cards, and alternative payment methods. By offering a diverse range of payment options and prioritizing security, payment gateways significantly enhance customer satisfaction and drive sales.

Some of the Best Payment Gateways in Brazil

When it comes to payment processing in Brazil, choosing the right gateway can significantly impact your business. Below are the top seven Brazilian payment gateways, each with unique offerings, strengths, and limitations.

• PagSeguro

PagSeguro, part of PagBank (NYSE: PAGS), focuses primarily on physical point-of-sale (POS) systems while also offering online transaction capabilities. It supports a variety of payment methods and is one of Brazil’s largest digital banks, claiming to have over 15 million active users.

• Mercado Pago

Backed by MercadoLibre, Mercado Pago integrates seamlessly with the MercadoLibre platform, making it a practical option for merchants who operate there. It offers support for both online and offline transactions, including payment links via social media and WhatsApp, QR codes for in-person payments, and a checkout system for online stores.

• Cielo

Cielo is a major player in Brazil’s payment processing market, focusing on a broad spectrum of solutions that include online payment gateways and physical POS systems. It supports various payment methods, including credit and debit cards, as well as the locally popular Boleto Bancário, catering to businesses of all sizes.

• Pagar.me

Pagar.me is known for its easy integration and customization options, supporting a range of payment methods like credit/debit cards and Boleto Bancário. Its user-friendly setup allows businesses to adapt their payment processes to specific needs, with reliable customer support available for operational assistance.

• Iugu

Iugu is well-suited for startups and SMEs, offering a flexible platform that accommodates various business models and supports a wide range of payment methods. It has advanced automation tools for billing and payments, and bolsters the ability to scale operations as their client business grows.

• CommerceGate

As a long-established and one of the most technologically advanced PSPs, CommerceGate empowers businesses to seamlessly enter the Latin American market and especially to capitalize on the speed of Brazil’s real-time payment system through its native, user-friendly Pix solution.

This platform prioritizes security, scalability, and transparency. CommerceGate’s proprietary Pix processing, encompassing both Dynamic and Static QR Codes, coupled with robust Anti-Money Laundering (AML) checks, fosters consumer spending and loyalty, and has proven to powerfully boost transaction volumes for merchants in every case.

How do I choose the right partner? Here’s what you need to look for

Selecting the right payment partner is crucial for successfully navigating the complexities of Brazil’s payment landscape. With so many factors to consider—such as local payment preferences, compliance with regulations, and robust security standards—it’s essential to choose a partner who understands the unique challenges of the Brazilian market.

CommerceGate excels in providing localized, robust, and secure payment solutions tailored to the Brazilian market and the broader LATAM region. Here’s what sets CommerceGate apart:

• • Boutique approach to payments strategy: CommerceGate has a strong commitment to working with tailored solutions matching your business needs.
  • Licensed and regulated: CommerceGate is a registered, regulated, and licensed entity by the Bank of Spain, with full authorization to operate in Brazil and across LATAM.
  • Audited for excellence: As a company audited by KPMG, CommerceGate ensures high standards of quality and reliability in all its services.
  • Top-tier security: Partnering with a PCI DSS Level 1-Certified company, CommerceGate prioritizes the highest security standards to protect your business and customers.
  • Minimized disruptions: Licensed operations reduce the risk of disruptions, such as account blocks, ensuring smooth and continuous transactions.
  • AI-enabled fraud prevention: Decades of experience in payment services, combined with advanced AI tools, enable CommerceGate to offer sophisticated fraud prevention measures.

• Proprietary PIX flows: Covering Dynamic and Static QR codes for repeat payments, increasing your Customer Lifetime Value (CLTV) up to +7%.

• Advanced PIX Fraud prevention (AML PIX Solution): with a unique QR code created for each individual user’s tax ID, increasing Operational Efficiency up to +13% .
• Fully transparent pricing tiers with no hidden fees: No FX & no IOF (Brazilian tax on financial operations), which is charged only when converted from R$.
• Transparent FX and overseas settlements: CommerceGate’s FX rate is one of the lowest in the industry, keeping your EMDR (Effective Merchant Discount Rate) low.

CommerceGate provides tailored payment solutions that give your business access to Brazil’s most popular local payment methods, such as PIX, Boleto Bancário, and local credit cards like ELO, Aura, and Hipercard. With CommerceGate, you benefit from immediate access to funds, swift and transparent fund transfers with fair exchange rates, and detailed transaction analysis for full control over your operations.

Ready to expand your business in Brazil?

If you’re looking to process payments effectively in Brazil and LATAM, CommerceGate is the partner you need. Book a free 30-minute consultation with our expert, Bruna Gomes, to explore how we can help you succeed in this vibrant and growing market.

^[1] https://www.statista.com/statistics/1364853/annual-value-of-credit-card-payments-brazil/

^[2] https://resources.emerchantpay.com/download-brazil-payments-guide

^[3] https://lawsofbrazil.com/tax-and-customs/