Pix revolutionizes payments in Brazil

Robson Ferreira walks with a sign amidst the cars waiting for traffic lights at an intersection in São Paulo. “I need help,” he wrote on the sign he holds next to the word “Pix,” followed by a numeric key.

Pix has become the most popular payment method in Brazil, surpassing the volume of credit and debit card transactions since last year.

“I get paid for Pix because I used to carry the sign and then the people who helped me told me: ‘Pix Pix, we don’t even carry money anymore’. With Pix I usually get more money”, says Ferreira, a 48-year-old unemployed man. years who beg drivers for alms.

The method was launched in November 2020 by the Central Bank of Brazil (BCB).

Soon, the initiative’s popularity gained space, including in the October election campaign: President Jair Bolsonaro (PL) attributed the authorship to himself, but the technical work began during the government of Michel Temer (2016-2018).

Pix was also the target of false information, which indicated that if elected, the favorite candidate in the polls, former president Luiz Inácio Lula da Silva (PT), would end the system to benefit the banks, which charge fees for the use of Pix between individuals.

small amounts

The Pix “keys” totaled 478 million until July – the majority of individuals – among 184 million Brazilians banked, according to the latest data from the BCB.

The number of transactions reached 4.2 billion in the first quarter of the year, 22.9% of the total, against 3.7 and 3.5 billion for payments with credit (19.27%) and debit (19.8%). , respectively.

The BCB also highlights the benefits for merchants: “The fees charged for receiving other electronic means (…) are very high. In addition, there is a very long period of time for the received ones to be effectively credited after the realization of a sale”, up to 28 days for credit cards.

In addition to this advantage, José Jefferson, a street vendor of coconut water on a beach in Rio de Janeiro, highlights another aspect: “Money can be lost, stolen. It’s much easier at Pix because everything is safe.”

The fact that it is instantaneous has placed Pix as the second means of payment in e-commerce, according to consultancy Gmattos.

However, Pix is ​​used for the time being for relatively small amounts.

This is reflected in the volume of transactions: R$ 2 trillion in the first quarter, almost five times less than the sum of electronic transfers.

According to Leandro Vilain, executive director of Innovation, Banking Products and Services at the Brazilian Federation of Banks (Febraban), “Pix cannibalized many of the transactions that were being made in cash.”

Analysts indicate that its scope is also due to free accounts, the government aid program paid to 20.2 million beneficiaries directly into their accounts and a base of more than one cell phone per person.

Kidnappings and Frauds

But cell phone bank account access and Pix transactions opened the way for various crimes.

Anna Novaes, a 52-year-old architect, was kidnapped last May in São Paulo for eight hours and forced at gunpoint to ask for loans from two banks, transferred via Pix to the kidnappers’ accounts.

Adding virtual purchases, the loss reached R$ 40,000 reais, told AFP Novaes, who got an exceptional reimbursement from his banks.

In July, there were 154,972 PIX frauds, more than double that of January, although this only represents 0.0075% of transactions, according to the BCB.

Having overcome the trauma of the kidnapping, Novaes took out insurance and was not resigned: “I continue to use the PIX in the same way as before. I don’t want to be without this facility”.