The impact of exchange rates on cross-border spending
Based on Brazilian cross-border spending data from 2009-2015 from Banco de Brasil, you can see there is a direct correlation between Brazilian international spending and U.S. dollar exchange rates (demonstrated in the Brazilian Cross-Border Spending from 2009-2015 chart), and this impacts consumer credit card spending across borders. Cross-border card usage is stable when the Real is 3:1. But the Real has been bouncing back and forth between 3.5 to 3.9 Real to the U.S. dollar. When the Real was greater than 3:1 after 2015, Brazilian international spending dropped dramatically. Prior to 2015, conditions were more favorable for international purchases.
The exchange rates took a toll on both spending and payment methods. As shown in Brazilian Cross-Border Payment Methods used from 2013-2015, in December 2015, international transactions on credit cards dropped 4 percent from December 2014 to December 2015—the lowest they have been over the past three years.
Brazilian Cross-Border Payment Methods, 2013-2015
Source: Visanet transactional data for Brazilian credit, debit and prepaid card international transactions from 2013 to 2015.
In 2011, the Brazilian government increased the tax for international transactions for credit cards, and as a result, cardholders started using cash instead of credit according to Brazilian Central Bank statistics.
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