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Editorial

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Brazil's Pix used for more transactions than credit and debit cards combined

Brazil's Pix continues its runaway success, with more transactions made using the instant payments platform in the first quarter than credit and debit cards combined.

12 26 July 2023 4 comments

Brazil's Pix used for more transactions than credit and debit cards combined

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Launched in late 2020 by the Central Bank of Brazil, account-to-account payment option PIX saw transactions for Q1 hit 8.1 billion, compared to 4.2 billion for credit cards and 3.8 billion for debit cards.

Data from the central bank, reviewed by vendor Matera, shows that Pix accounted for 35% of all transactions in Q1, up from 23% a year ago. In contrast, credit card transactions were 18% of the total, down from 20% one year ago. Debit card transactions were 16% of total, down from 20%.

QR codes are proving an important part of the Pix success story, accounting for nearly 30% of the platforms transactions.

Last year, central bank chief Roberto Campos Neto said that he believes credit cards are on the brink of extinction due to growth in account-to-account based open payments.

Matera also argues that Pix is a clear challenge to credit cards and can provide a blueprint for the US market, which has just seen the debut if the FedNow payments rail.

“With FedNow and RTP, US financial institutions have a real opportunity to innovate on top of these new payment rails to give consumers and businesses better payment options,” says Carlos Netto, CEO, Matera. “Pix shows how intuitive payments can be. It poses the greatest threat yet to credit card dominance."

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Banco Central do Brasil Matera

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Comments: (4)

Jeremy Light Co-founder at Fourdotzero

26 July 2023

Pix is a shining example of how instant account-to-account payments have a far superior and up-to-date product/market fit than cards - same goes for UPI in India. Both were implemented in relatively short time frames and gained huge traction immediately.

However, cards are far more profitable for banks which is why in countries such as the UK, Australia, USA, Canada and the Nordics initiatives to implement or upgrade real-time a2a payment systems are delayed continuosly or slow to get traction. Behind the scenes foot-dragging seems to be the order of the day in these countries which is a shame and a huge detriment to their economies and consumers.

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A Finextra member

26 July 2023

Scams related to Pix have surged since its launch, with criminals taking advantage of its simplicity and wide availability to conduct fraud. Also, the lack of digital banking experience among many newly banked makes that segment a target for social engineering. Estimates by the banks point out that scams can cause losses in the magnitude of 2.5 billion (or $500 million) this year against the Brazilian financial system, of which 70% would originate from Pix transactions. Despite its positive contributions, the security of transactions continues to be weak. In that regard, the Central Bank of Brazil is looking for ways to reinforce onboarding security, an official said this month at an event hosted by the local banking association.

“If I know who paid and I know who sent the money, it easier to track (illicit) transactions,” Ricardo Mourão, head of Banking Operations at the central bank, was quoted as saying by local media. “We will make account opening more robust, with more identity data. This (issue) will be solved.”

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