Brazil's BNPL working practices

30 MARCH 2021


Banks and credit cards issuers in English-speaking countries would be well-advised to look to Brazil for insights on how BNPL is working in practice. When they do, they may be surprised to learn that:


  • It is common for merchants to offer shoppers multiple alternative instalment plans at the point of sale
  • Presentation of credit and debit cards at the point of sale enables the customer to ask to pay in instalments. Interest is not usually charged on sales, courtesy of the acquirers
  • Consumers frequently put outstanding balances on their credit cards – eventually paying off their borrowings via cards
  • People often ask merchants for discounts when they pay “on the spot” – usually getting 10 percent back. The options are cash, bnpl or instalments
  • Credit cards and BNPL co-exist, though BNPL has undoubtedly displaced a considerable amount of borrowing via credit cards
  • Brazil has a huge debt collection industry
  • Merchants sell future instalments to banks at a discount (factoring), anticipating the cash