Traditionally recognized for its beautiful beaches, pristine rainforests, and fanatic endorsement of all things football, Brazil has recently become a hotbed of economic growth.
Brazil's web-based transactions already account for more than 59% of all eCommerce revenues in Latin America. As cited by news portal Fator Brasil, the Brazilian E-Commerce Association (ABComm) reported over $13 billion in web-based sales registered by Brazilian retailers in 2013 - up 29% from the prior year. And, ABComm expects investments in local infrastructure and 4G to increase the number of Brazilians completing online purchases by almost 27% in 2014 – reaching an estimated revenue of over $16 billion USD.
The nomination of Rio de Janeiro as host city for both the upcoming 2014 FIFA World Cup and the 2016 Summer Olympics is expected to provide an additional boost to online retailers. According to one report by research firm eMarketer, eCommerce should see double-digit expansion in 2014, as these events prompt a surge in domestic travel and other event-related purchases.
This rapid growth of Brazil's online retail market arrives hand-in-hand with an increased threat of fraudulent activity. Now the 4th largest payment card market globally, Brazil ranks 1st in Latin America for incidents of card penetration and criminal abuse of compromised accounts. Over the last 5 years, more than 33% of Brazilian credit card users have reported experiencing fraudulent activity, according to research conducted by Aite Group.
This lack of security has proven to be a major deterrent, historically, for many potential e-customers – however, a survey cited by Câmara Brasileira de Comércio Eletrônico indicates that consumer confidence is improving. Approximately 70% of Brazilians surveyed stated they are more willing to share information with online retailers in recent years, as businesses have adopted new methods of identity verification and online security.
Still, official regulation of Brazil's eCommerce activity is in its infancy, and security is still a huge concern. While the Brazilian government scrambles to enact measures which address the unprecedented growth of online retail, businesses are left to shoulder the responsibility of secure authentication and fraud prevention independently.
As the government gradually addresses security-related issues, we expect increased scrutinization of all online business transactions intended to crack down on money-laundering and other fraudulent activities. Effective and reliable identity verification will be a must for addressing these concerns, mitigating risk, and ensuring compliance with new regulations.
Businesses which hope to profit from the predicted economic growth surrounding Brazil's participation with the World Cup and Olympic events must devise a plan for addressing electronic identity verification (eIDV) requirements. In order to create a relationship of trust and reliability, businesses must also establish best practices which meet standards of global compliance for large cultural events. And, all of this must be accomplished in a fashion which allows online retailers to interact with their customers quickly, easily, and securely.
Businesses can best protect themselves and their customers by using an eIDV service which ensures that all personal details provided are accurate and authentic, without resorting to cumbersome in-person interactions or processing paper documents. While large organizations such as Microsoft are creating their own technologies to address the challenges of online verification, smaller businesses are improving security by adopting turn-key strategies.
As online retailers explore Brazil's upcoming economic opportunities, they can build trust and improve customer relationships by improving security and authentication measures, and taking action to curb fraudulent activity. Businesses who gain consumer confidence by improving their methods of verification can expect eCommerce to boost economic growth long after the World Cup and Olympics have ended.