This article will give you an overview on Boleto Bancário, the most popular solutions for invoice payments in Brazil.
Boleto Bancário is closely related to the Sistema de Pagamentos Brasileiro (Brazilian Payment System) also known as SPB.
Sistema de Pagamentos Brasileiro is a set of procedures, rules, instruments and integrated operations that electronically support financial transactions between economic agents and the Brazilian market. It aims protection against leaks and against the breakdown of financial institutions.
Its main task is to allow the transference of financial resources, the processing and the payments liquidation for private people, legal entities and governmental institutions.
Boleto Bancário in a nutshell
Boleto Bancário is a financial document, a kind of proforma invoice issued by a bank that enables your client to pay the exact specified amount to the receiving party (merchant). As long as within the due date period, your client may use a lotto house, supermarkets, post offices, home banking in addition to any bank agency in the Brazilian territory.
The main characters involved in this billing are the Bank, the Merchant and the Merchant's Client, or "sacado".
- Bank: Financial institution responsible for the issuing and collection based on agreement between the merchant and itself. The bank, once authorized to collect payment for the Merchant, will credit the amount owed by the Client in the Merchant's bank account.
- Sacado (Client): The individual or corporate entity that pays the boleto.
- Cedente (Merchant): The individual or corporate entity that issues the boleto and whose account will be credited.
A boleto bancário will always include:
- Bar Code: a code consisting of a group of printed and variously patterned bars (always 103mm in length and 13mm in height) and spaces and sometimes numerals that is designed to be scanned and read by a digital laser scanner and that contains Information to identify the object it labels.
- Identification Field: Numerical representation of the bar code, contains all the information necessary to identify the Cedente's (Merchant's) bank account and allow the clearance. This field is used in home banking and self service banking.
- Nosso Número: On the upper right hand corner of the Ficha de Compensação (Clearance Receipt) Nosso Número will be inserted according to rules established by each bank. Nosso Número (our ID Number) will enable identification of a boleto for the billing sector.
The identification field must be to the right of the bank identification number. In case of problems with reading the bar code the information field will be used in its stead.
How to issue a Boleto Bancário?
Anyone who has a bank account can issue a boleto bancário trough their bank, but here are some aspects that you must keep in mind in order to get started:
- Your bank will have to authorize your account to issue boleto bancário.
- Banks have different pricing schemes so you will have to choose one that match the volume you plan to issue.
- Some banks have very strict policies for individuals that want to issue boleto bancário.
Types of Collection
Some banks allow its costumers to choose from two types of collection: registered and unregistered.
Registered collection consists on sending billing information beforehand to the bank through collect commands file of several types - the most common are CNAB and/or FEBRABAN - in order to enable additional services such as printing and mailing of boletos, reporting tools, control of collection, payment status, and alterations to mention a few.
Some banks use CNAB 400 standards and others use FEBRABAN 240, and others yet use both. A few banks will have their own layouts. In order to collect, the Cedente (Merchant) must send the appropriate file to his bank. The type of file accepted for the Merchant's account should be informed by your bank account manager.
Unregistered collection entails the receipt of bills without previous registration of these in the banking system, which means that the bank will receive the payments due, credit the appropriate account and deduct bank collecting fees. The Merchant can issue their own boletos specifying bank and any other information they deem necessary. The bank will by means of magnetic archives, files or other, transmit bill and payment information to the Merchant.
How to pay?
The payment process for Boleto Bancário transactions is similar to many other payment methods. It is a Consumer push-payment, which relies on the Consumer initialize the payment action.
One difference between cash payments is that with Boleto Bancário, consumers may also pay with their online banking. Once the payment is made, a payment confirmation is provided in real-time, while the funding can take an additional period of time.
There are no built in logic for direct debit nor recurring payments in the boleto bancário scheme.
When paid after the due date period, the client has to pay a fee that increases daily and its value varies from bank to bank.
Besides the fee, after the due date the client can only pay the boleto at the bank that issued it, losing the option of paying it at the post office, lottery houses or any other facility.
Banks charge a fee over every boleto payed by the client. This fee varies from BRL 1,00 to BRL 12,00, depending on the bank. If the collecting is registered, then the bank will also charge a fee for every issued boleto, regardless of whether it was paid or not. Therefore, unregistered collection is more suitable for online transactions.
The bank also takes into account the size of the client, so a client with a higher volume of banking transactions, who has been working with the bank for a while, etc, is able to get lower fees or even fee exemption. Therefore, it is important to consult your bank about the fees involved.