Brazil skipped the line in digital payment innovation

Would you face a block-long line to pay for a product you just bought online? I didn't think so either, until the day when that was my only option to pay for furniture for my new apartment in Buenos Aires. I've lived in Brazil for more than two decades, having moved there as a child, but a few years ago, I spent some time in my native country. Since I didn't have a financial history there, it would take a long time to get a credit card in my name. I had to opt for the only payment method available to me: a kind of payment slip that could only be paid in cash at the bank counter.

An international model for innovations in the payments market, Brazil has transformed an ordinary activity in other countries – like standing in line to pay bills in cash at physical locations – into a scenario that's hard to imagine for those who live here. If I had lived in São Paulo or any other Brazilian city at that time, my situation would have been resolved in seconds, literally, thanks to Pix. It would have been good for me, as I wouldn't even need to leave home; it would have been good for the store owner, who would receive the payment immediately. It's because of advantages like these that we are leading the transformation of digital commerce.

Pix is the payment method that will grow the most in e-commerce in emerging markets over the next two years, ahead of digital wallets, debit and credit cards, and even other real-time payment systems, like India's UPI. A study by EBANX with data from Payments and Commerce Market Intelligence (PCMI) estimates an annual growth of 35% by 2027, an impressive pace for a product that is just over four years old but is already used by 91% of Brazil's adult population. This acceleration, of course, includes Pix Automático.

The new Pix feature, which will allow automated recurring payments starting in June, hasn't even been launched yet and is already causing buzz among market experts. And it's no wonder: Pix Automático has the potential to unlock more than US$ 30 billion in recurring payments in just two years. This will come mainly from new customers who, even without access to credit cards, will be able to use Pix to pay for streaming platforms, Software as a Service (SaaS), app subscriptions, games, retail, and more. They will become part of a recurring market that currently moves US$ 50 billion per year in Brazil alone. We estimate that Pix Automático will represent 12% of Pix volume in digital commerce by 2027.

A few weeks ago, I received an email from one of the world's largest subscription-based companies. They have been preparing for months to offer Pix Automático to their customers from day one and invited us to give a presentation at an internal event dedicated to the topic. "Brazil is a key market for us, and we can't miss this opportunity," they told me. Like them, all our clients, from every corner of the world, without exception, are mobilized not to be left behind. In the industry, there's no doubt that Pix Automático will transform Brazilian digital commerce and, in the process, further consolidate the country as a global leader in payment innovation.

In the second half of this year, Colombia is expected to launch Bre-B, an instant payment system inspired by Pix. They not only came here to understand how things work but also brought professionals working in Brazil to participate in the development process of this new product. My team was invited, and we shared discoveries and experiences from the last four years. The main features that made Pix the most used payment method in Brazil will be present in Bre-B: interoperability, 24/7 availability, and instantaneity. EBANX's study forecasts a jump in the volume of account-to-account transfer payments in Colombia: from US$ 18 billion in 2024 to US$ 33 billion in 2027. It's the Pix effect crossing borders. Other countries like Egypt, with InstaPay, and South Africa, with PayShap, are also betting big on real-time payments.

Brazil's and emerging markets' pioneering spirit has also reached credit cards. The popularization of alternative methods, such as Pix and digital wallets, has raised the bar and triggered a race for innovation. New players, such as fintechs and digital banks, have emerged with solutions aligned with local demands and a much more fluid and intuitive user experience, plus new security features that have considerably reduced rejection rates for legitimate transactions. Result: credit cards remain extremely relevant for e-commerce as well, with a growth rate of 13% per year until 2027, and continue to dominate segments such as streaming, SaaS, games, and travel. In these sectors, they represent 51% to 77% of online purchases in rising economies in Latin America, Africa, and Asia.

Emerging countries have already understood that digital transactions and inclusive payment methods are the path to modernizing the financial system and democratizing access to banking services. They are the ones who have been innovating the most and leading the transformation of the global payments market, creating solutions that combine simplicity, security, and accessibility. Brazil has become a world reference in this area, and any comparison with developed economies will seem unfair (to them). For example: FedNow, the "US Pix," processed 915,000 real-time transactions in the 4th quarter of 2024. This represents only 0.5% of the total number of Pix transactions in the same period, which reached more than 18 billion, according to the Central Bank of Brazil.

The explanation for the chasm that separates the two countries involves market characteristics and sizes that make the demand for instant payments lower in the United States: American consumers are more digitalized and banked than those in some emerging countries, where digital and financial inclusion is still in progress. The novelty in the payments market, which remains the biggest trend for the coming years, lies in the players who are occupying the vacuum left by more developed economies and in how they are transforming these populations' unmet needs into opportunities. Emerging markets are tired of standing in line.