Brazil is shifting how consumers and businesses make payments, from mobile adoption to instant transfers. This progress highlights both opportunities and challenges for financial innovation in emerging markets.
Cash, while still widely used in Brazil, is steadily losing ground to digital alternatives. Debit and credit cards are now common, with mobile payments gaining momentum thanks to high smartphone penetration.
A standout success is PIX Brazil’s instant payment system launched by the Central Bank in 2020. PIX facilitates real-time transactions without fees for individuals, shaping how Brazilians send and receive money. As of 2023, PIX had processed over 10 billion transactions, becoming an essential part of the payment ecosystem.
The COVID-19 pandemic accelerated digital payment adoption as businesses and consumers turned to online transactions during lockdowns. Mobile wallets and contactless payments became everyday tools, influencing consumer habits and driving ecommerce growth.
According to McKinsey, this period also saw financial inclusion improve significantly, with the share of banked individuals in Brazil surpassing 73% in recent years.
Source: PayFuture
Emerging markets are economies in transition, moving from low-income systems to modern ones with rising per capita income, increased foreign investment, and improved regulatory frameworks. Brazil reflects the opportunities and challenges of this shift.
While it has achieved significant progress in modernising payments and increasing financial inclusion, it continues to face hurdles such as informal employment, regulatory complexity and uneven infrastructure.
For businesses, this duality requires a tailored approach, balancing innovation with an understanding of the local environment.
Brazil’s payment system offers vast potential for businesses willing to adapt to its unique characteristics. With over 200 million people, including a significant underbanked population, the market provides fertile ground for growth.
Local payment preferences: Brazilians use a mix of payment methods, including PIX, QR codes, and instalment-based credit card payments. Instalments remain a major part of Brazilian consumer spending, particularly in ecommerce. They enable consumers to divide purchases into manageable payments, often without interest, driving larger transaction volumes and building loyalty. Payment providers must cater to this diversity to meet consumer needs effectively.
Partnerships with local players: collaborating with local banks, fintechs, and merchants is essential for understanding Brazil’s regulatory environment and building trust with consumers.
Economic inclusion: offering accessible payment solutions can connect businesses to underbanked populations, expanding market reach while promoting financial inclusion.
Despite its potential, Brazil poses challenges for businesses entering its payment ecosystem. Informal employment, where cash dominates, slows the adoption of digital methods. Regulatory requirements can also be complex, particularly for foreign firms, while cybersecurity risks, including fraud, remain a pressing concern.
Economic factors add another layer of complexity. While Deloitte highlights Brazil’s GDP growth of 5.9% in 2024, inflation and interest rate fluctuations influence consumer behaviour and impact payment preferences. Businesses must stay agile and invest in secure, reliable systems to address these challenges effectively.
Technology is driving significant change in Brazil’s payment systems. Affordable smartphones and data plans have brought mobile payments within reach for millions, while QR codes provide a simple, low-cost option for merchants. Government-led initiatives like PIX demonstrate how innovation can drive widespread adoption and financial inclusion.
Contactless payments are also gaining traction, particularly in urban centres where speed and convenience are priorities. Tap-to-pay options, powered by NFC technology, complement other digital methods, providing faster transactions for in-store purchases.
Small and microbusinesses have also benefited, as digital payments reduce reliance on cash and enable greater participation in the formal economy. To sustain this momentum, businesses must focus on user-friendly solutions and ensure systems are compatible with others to maximise accessibility.
As digital payment adoption continues to grow in Brazil, attention will likely turn to underserved areas and long-term sustainability. Expanding digital infrastructure in rural regions, improving fraud prevention measures, and enhancing digital literacy will be important next steps.
For fintechs and global payment providers, success lies in understanding local needs, offering diverse payment options, and addressing security concerns. By fostering partnerships and leveraging technology, businesses can establish themselves in Brazil while showcasing how emerging markets can drive the future of financial innovation.
As PayFuture’s Co-Founder and Chief Technology Officer, Zaki has over 30 years of experience in fintech, cybersecurity, and payments. He’s known for building successful companies from the ground up, having founded Computrad, a managed IT and cybersecurity solutions provider which served several high-profile clients including the US Military, and growing it into a multinational enterprise. Zaki’s expertise now drives the development of PayFuture’s global payment gateway, empowering businesses to tap into emerging markets. He’s passionate about building scalable, high-volume systems and solving complex payment infrastructure challenges.
PayFuture is an innovative payment technology platform designed to unlock access to local payment solutions in emerging global markets. Through a single integration, PayFuture enables online merchants to instantly connect with the most popular payment methods in each region, simplifying market entry and growth. PayFuture’s gateway provides unrivalled advantages in enhancing the customer journey, improving approval rates, and optimising conversion recovery – helping merchants boost revenue in these high-potential regions. With innovative technology and industry-leading solutions, PayFuture is empowering merchants to expand globally and capitalise on new opportunities.
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