PB 1Optimizing E-commerce payments in Brazilwww.americasmi.comwww.americasmi.com

OPTIMIZING E-COMMERCE PAYMENTS IN BRAZILA practical guide to Brazil's local payment landscape

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Table of Contents

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Executive Summary

Introduction

Brazil’s E-commerce and Banking Landscape

Market Size, Growth and Trends

Brazil’s Banking SystemBrazil’s Acquiring Landscape

Credit Cards

International Card Networks

Domestic Card Networks

Other Local Schemes

Installment Plans

Boleto Bancario

Debit Payments

Digital Wallets and Other Payment Methods

What do Local Merchants do?

E-Commerce Payment Methods

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04Models for Market Entry Into Brazil

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List of Figures

List of Tables

List of Images

Operating with no legal entity

AppendixPayment Provider Profile Definitions

About AMI

About the Author

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Merchant Case Studies

Conclusion

WePlannLeading Global Technology Company

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05Gateways and Payment Service Providers in Brazil

Introduction and Methodology

Payment Gateway Profiles

Payment Gateway Benchmarking

Payment Service Provider Benchmarking

Payment Service Provider Profiles

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Establishing a Full-Fledged Local Entity

Establishing a “Shell” Entity1. Brazilian E-commerce Market,

2011-2016, R$ and USD billions..................................................4

2. Cross-border and Domestic E-commerce in Brazil, 2015, USD billions ...............................................................................4

3. Brazilian E-commerce by Product Type, 2015, USD billions .............................................................................................9

4. Brazilian E-commerce Market, 2011-2016, R$ and USD billions ......................................................................... 10

5. Brazilian E-commerce by Segment and Device Type, 2015, USD billions ............................................... 10

6. Domestic vs Cross-border, 2015, USD billions ................ 11

7. Acquirer market share, 2015, credit card spend processed, % ........................................................................................ 11

8. E-commerce Spend by Payment Method, 2015, % of spend .............................................................................. 13

9. E-commerce Credit Card Spend by Card Network, 2015, % of spend ........................................................ 13

1. Brazil’s Top Ten Banks by Assets, 2014, USD billions .... 11

2. Acquiring Landscape ..................................................................... 12

3. International Card Networks ..................................................... 14

4. Elo............................................................................................................... 15

5. Hiper and Hipercard ....................................................................... 15

6. Cielo’s Installment Plan Fee Structure .................................. 16

7. Acceptance of credit cards by select merchants .......... 20

8. Acceptance of non-card payment methods by select merchants............................................................................... 20

9. Acceptance of debit cards by select merchants ........... 21

1. MercadoLivre.com advertises a leather purse ................ 16

2. Submarino offers a Samsung Galaxy S7 ............................. 16

3. iPhone payment plan options ................................................. 17

4. Apple Store advertises a 32GB iPad ...................................... 17

5. Online furniture retailer ................................................................ 17

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4 PBOptimizing E-commerce payments in Brazil www.americasmi.com

About AMI

Senior Director, AMI payments practice co-leaderLindsay Lehr

• Leadership of 70+ consulting engagements, 30 in financial services• 10+ years experience working in Latin America• Co-author of AMI payments whitepaper• Frequent public speaker and thought leader in mobile money, mobile payments,

e-commerce and m-commerce and financial inclusion in Latin America• Fluent in English, Spanish and Portuguese

Mobile money Cash in/cash out Financial inclusion Correspondent banking Remittances

Personal credit cards

Small business and corporate credit cards Prepaid cards Fleet cards Distribution and

purchasing cards

POS systems NFC EMV cards Mobile payments E-commerce

Payment gateways Digital wallet Retail cards Credit lines Mortgages

Experts in the Latin American payments industry

AMI is the leading independent Market Intelligence provider in Latin America

About the Author

+1 (305) 873-4311 llehr@americasmi.com

AMI is Latin America's leading Market Intelligence and Advisory group.

AMI has experience in every market in Latin America and the Caribbean.

AMI is a member of SCIP – Strategic and Competitive Intelligence Professionals.

AMI’s founding partners are pioneers in the field of Market Intelligence in Latin America, with over 20 of years experience in the region.