The Latin American Payments Blog

Reaching the Unbanked Population in Brazil


How do you reach the unbanked population of Brazil?

As we all know from years of seeing sweeping images of Ipanema beach, the vibrant street culture in Salvador, and hearing the soft sounds of samba, Brazil is a unique country in many ways. With a population of over 210 million citizens, Brazil has a thriving economy. It is truly leading the way in Latin America. However, another unique aspect of the country is the number of citizens who are classified as ‘unbanked’. Research carried out by the Locomotiva Institute in 2019 revealed that 45 million citizens of Brazil were considered unbanked. This same unbanked population is responsible for spending and moving over R $800 billion (about $200 billion USD) each year.

What does unbanked mean?

Being unbanked (uma pessoa sem uma conta bancaria) refers to anyone who does not use any form of bank or banking institution to house their funds. That or they have not used their account for over 6 months. This means that this segment typically purchases goods using cash or on prepaid debit cards. According to the Locomotiva Institute study, around 29% of the adult population in Brazil either do not have access to a bank account or have purposely not taken one out.

 Who is Unbanked in Brazil?

The vast majority of those considered unbanked, fall into the lower-middle to poor economic classes. Defined by the Brazilian government, there are five economic classes overall. These are based on the overall gross monthly income of the household, broken down as follows:

  • Class A: Above BRL 15.760
  • Class B: Above BRL 7.880
  • Class C: Above BRL 3.152
  • Class D: Above BRL 1.576
  • Class E: Below BRL 1.576

Additionally, nearly 60% of those classed as unbanked are women. Whilst those living in the countryside are more likely to be unbanked than those in more urban areas. Naturally due to a lack of banking resources within a reachable distance.

Perhaps most surprising is that the vast majority of unbanked people in Brazil are relatively young. Aged between 16-34 years old. For some, the lack of money is the main reason that they do not have a bank account. But 75% admitted to avoiding banks as much as possible by choice.

Why are so many Brazilians unbanked?

There are many different reasons why there’s such a large population of unbanked citizens in Brazil. One of the primary reasons, as cited in the Locomotiva Institute report, is that the population does not earn enough to warrant an account.

Those residents living in low to middle-income brackets are on an incredibly low wage. Their monthly minimum wage is 1045BRL, which is around $230 USD. In addition to low wages, standard banking fees in Brazil are some of the highest in the world. Leading Brazilians to pay billions each year in bank fees. 

For people on low incomes, the bank fees that are applied on loans can equate to over 20% of their monthly salary. Should they fall behind on loan repayments for any products that they have purchased, their interest rates will increase significantly. This leaves them paying far more for the item than its original retail price.

The required minimum values in the account can be discouraging for many potential account holders earning low wages. 29% of Brazilians surveyed admitted to preferring to use cash. Whilst nearly 50% of those surveyed admitted to not trusting banks. Additionally, if a family member already has a bank account, members share the account so as to reduce the expensive fees for the household.

With the vast majority of those unbanked Brazilians living in rural areas, many also cited that financial institutes were too far away. Which is a common reason for no longer maintaining or opening a bank account.

What impact does this have on businesses wanting to operate in Brazil?

The lack of customers with an active bank account can pose a serious problem for foreign e-commerce sites who want to operate in Brazil. Especially if they are not prepared to best serve this unbanked population. It should be noted that although a vast portion of the country does not have a bank account, they do have access to the internet and cash. Meaning they are still active and purchasing goods, both online and in stores.

The fact that they do not have access to a bank account means that many citizens are not able to secure a credit card. This is because they do not have a credit rating. A survey in 2017 revealed that only 27% of the population actually owned a credit card.

This means to operate a business in Brazil, a company needs to be able to accept either pre-paid debit cards or Boleto Bancario. Boleto Bancario is the most common form of payment. Similar to how wire transfers and cash payments work, Boletos act like an invoice that is provided to the consumer. This invoice instructs them on the amount due and when that payment is due. 


Millions of Brazilians use Boletos every day, and with the rise of internet banking, the popularity of this method is continuing to grow. Especially that now consumers are able to pay off Boletos online. You can read more about how Boletos work and their importance to the Brazilian economy by reading our recent blog on them here.

If you want to operate successfully in Brazil then you must include Boleto as an option for your potential consumers.

Can anyone accept a Boleto Bancario?

The fact that nearly every Brazilian has used a Boleto Bancario at least once in their life, and many use them on a monthly basis, indicates just how popular and frequently used they are.

To accept Boletos as a foreign merchant, you will need to manage the actual payment process. This would be done only via a local entity that is situated in the country itself. This is an incredibly complex procedure to try and open up yourself. Your company would need to engage the knowledge of a local expert. This is to help you negotiate your way through the required laws, rules, and taxes you would be required to pay.

The easier and less time-consuming way your foreign company can accept Boleto as a payment method in a matter of weeks is to use the services of a financial company already established in the country, like epag.

Can anyone accept a Boleto Bancario?

Based right here in Brazil, our team have lived and worked in the country their entire life. We know everything there is to know about the region’s complex financial systems. We have helped hundreds of merchants from around the world set up their payment solutions here in the country. This means our clients do not need any local entities or Brazilian-based bank accounts to be able to accept Boleto (and local cards).

Using state-of-the-art technology, we are able to collect payments in the local currency, opening your business to the entire 210 million-strong population of Brazil. This is before remitting it to you anywhere in the world in either EUR or USD.

With no hidden fees, we are a one-stop-shop for big business all the way down to SMEs. Giving each of our customers a tailored and personal service. So if you are seeking to expand your business and take advantage of the incredible opportunities that retailing in Brazil offers, then get in touch with our experienced team today to find out more.