Pix: Latest update on Brazil’s leading instant payment scheme

Four years ago, the Brazilian Central Bank introduced an instant payment scheme called Pix, the initiative has experienced remarkable growth since its inception.

To learn more about the latest updates, the European Payments Council conducted an interview with Carlos Eduardo Brandt, Head of Management and Operation for Pix, at the Brazilian Central Bank.

Pix is considered a major success in mobile wallet-driven instant payments: can you provide us with the most recent updates regarding Pix, including any statistics available?

At its launch in November 2020, Pix already had multiple use cases, such as transfers between people, between companies, purchases at the point of sale and in e-commerce, electronic billing, and payment and tax collection.

After its launch, new functionalities were developed, such as payment scheduling, the possibility of initiating payments through third-party providers (payment initiator service providers or PISP) and the withdrawal of cash from merchants and ATMs.

We are currently developing a new solution for recurring payments, allowing periodic payments to be easily made with payee inputs and with a single authorisation from the payer.

In addition, we are carefully looking at the buy now pay later (BNPL) initiatives of some payment service providers (PSPs) and will discuss the possibility of having a standardized BNPL product for Pix at some point.

We are also exploring new forms of initiation (NFC payments in particular). Alongside all these developments, we are continually developing new solutions to add even more security mechanisms to the ecosystem and minimize frauds and scams.

With all these features, today Pix is used by around 153 million Brazilians (around 75% of the population) and 15 million companies.

In 2023, there were 42 billion transactions (75% growth compared to 2022), with a turnover of 17.2 trillion Brazilian reals (around 3.5 trillion US dollars).

By December 2022, 71.5 million individuals who, prior to Pix’s launch, had not used any form of electronic credit transfers, had already used Pix. We currently have 816 PSPs – including banks of all sizes, non-banks, fintechs, credit unions – and PISPs offering Pix in Brazil.

More statistics can be found here.

Can you share the lessons that you have learned since the launch of Pix four years ago?

There were several lessons and key success factors.

I would highlight the following:

Strong communication strategy was needed, including the definition of a name and a brand that was easily perceived by the population.
We had no fees for individuals initiating a Pix account.
We opened up the ecosystem to any PSP, including through indirect access to the settlement platform, promoting a highly competitive environment and, consequently, high quality service and low fees for companies and merchants.
We had a strong user-centred approach, defining minimum requirements for the user experience in order to minimise friction and developing standard application programming interfaces (APIs) for merchants’ integration with PSPs.
We were interested in many use case approaches, helping Pix to achieve ubiquity.
We have a well-defined governance structure, in which Banco Central do Brasil is the rulebook owner and in which there is intense public–private interaction through the Pix Forum, where any stakeholder can give their input on the rules created in the ecosystem.
We ensured the development of robust security mechanisms.

Can you tell us more about how the Brazilian Central Bank and the PSPs participating in Pix implementing fraud prevention measures and combating fraud?

Pix’s security is based on four dimensions: user authentication to initiate any transaction, including the management of Pix aliases; transaction traceability; secure information traffic via an encrypted private network completely separate from the internet; and security rules and mechanisms to mitigate fraud risk.

Banco Central do Brasil is responsible for defining the security rules and mechanisms that the PSPs are required to implement.

These rules and mechanisms include the need for each PSP to set transactional limits for each user according to their risk profile.

The possibility of using additional time (up to 60 minutes) for the paying PSP to authorise a transaction with suspected fraud; the possibility of a precautionary block, by the receiving PSP, of amounts transferred that are suspected of being fraudulent; automated procedures for requesting the refund of amounts in the event of fraudulent transactions or transactions originating from scams.

Banco Central do Brasil is also responsible for operating the antifraud database.

PSPs are required to flag fraudulent users in the database, and the information is shared with all participants, to feed the antifraud engines of PSPs.

Can you tell us more about International Pix and the plans for international instant cross border payments?

We are exploring ways to interlink Pix to instant payment systems in other jurisdictions to enable cross-border transactions and help the G20 achieve its goals of improving the speed, transparency, cost, and access of these transactions.

These interlinks could happen in a bilateral way (one by one) or in a multilateral way (in a multilateral platform, like project Nexus, for example). The multilateral approach, although more complex to implement, tends to be a more efficient solution for achieving the G20 goals.

What insights can you provide on the future of Pix?

Pix will likely keep growing over the coming years, with the development of new solutions for new use cases and the improvement of existing features.

Banco Central do Brasil’s present and future actions will be guided by the objective of allowing payers and payees to have the option of choosing Pix for any type of payment, regardless of value and use case.

Among the future possibilities for the evolution of Pix, there are several products and features that will make it even easier to use Pix in bill payments and purchase situations, which are typically transactions between individuals and companies (P2M) or between companies (P2B).

We will also keep exploring the synergy with Open Finance Brazil, which has proven to be a powerful driver for new and innovative products and for niche solutions.

In summary, Pix has been happily adopted by the Brazilian population, and we will continue to work to ensure that it continues to help increasing inclusion, digitalisation, and efficiency in the Brazilian economy.


The interview was originally published in the European Payments Council (EPC) Newsletter


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