Brazilian Software Industry: A Market to Explore

Brazil is quite a promising market to explore for software developers. The Brazilian IT market, which includes the software industry as well as hardware and services, was responsible for 3.3% of Brazil’s GDP in 2015. This represents a total amount of USD 60 billion and the software industry was responsible for USD 12.3 billion of the total. In comparison to 2014, there was an increase of 30.2%, according to a study from the Brazilian Association of Software Companies (Associação Brasileira das Empresas de Software). The study also reveals that over 76% of the software products available in Brazil were developed in a foreign country.

 

 

 IT Share in the Brazilian E-commerce Market

 

The latest E-bit Webshoppers report shows that 7% of Brazilian e-commerce businesses are IT related. The report also indicated that the IT sector represents 5.9% of all e-commerce transactions, taking the 7th position in terms of number of transactions. However, when it comes to revenues, it is number 4 in the categories’ ranking, representing 9.5% of the Brazilian e-commerce turn-over.

 

There is no doubt that the evolution of e-commerce has helped advance the commercialization of software worldwide. With electronic deliveries, software developers can now reach a bigger number of users easily. In fact, 25% of the Brazilian consumers who purchased online on international websites bought IT products or services.

 

 

Brazilians’ Payment Choices

 

Brazilian consumers are used to having different payment choices for e-commerce transactions. Looking exclusively at the software sector, PagBrasil estimates that 58% of the purchases are paid by credit card, while boleto bancário is the chosen method 28% of the time and bank deposit or bank transfer represents 11% of the transactions. Other payment methods, such as debit cards, represent just 3% of the total. It is important to highlight that the importance of the boleto becomes a lot more significant in the B2B segment, as it is often the only way to charge corporate customers.

 

It is well known that Brazilians are used to financing their purchases and depending on the industry, installment payments can represent 75% to over 90% of all credit card transactions. According to Cielo, out of the buyers who choose to pay their software products by credit card, the vast majority, 91%, prefer to pay in installments.

 

 

Recurring Payments and the Software Industry

 

Recurring payments is a big trend in the software industry, as many products are available on a subscription basis. Recurring payments allow merchants to charge buyers on a regular basis, which is essential for merchants selling subscription software products or SaaS. Credit cards are the only option to set up automatic recurring payments. However, that doesn’t mean software businesses need give up on 42% of their customers who choose other payment methods. PagBrasil offers a solution that allows merchants to offer recurring payments with boleto bancário.

 

Let’s take a monthly subscription, with a duration of 12 months, as an example. This is how recurring payments with boleto should be set up: the merchant can easily generate 12 boletos with different expiry dates through our system and use PagBrasil’s e-mail service to send the boletos to the user on a monthly basis. Unlike credit card payments, this solution will require an action from the buyer. However, in PagBrasil’s experience, if consumers are satisfied with the product or service, as well as with the customer support, they are likely to keep their subscription active.

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