Opinion – Why? Economês in good Portuguese: Some conjectures about the growth of Pix

Pix went live in late 2020 and quickly became the preferred way to send money in the country. Data from the Central Bank indicate that, in the number of transactions carried out, Pix already exceeds, by a large margin, other modalities of transferring resources or making payments, such as TED, DOC, boleto, check, etc.

But this movement was not accompanied by a corresponding drop in these alternatives. Yes, transactions carried out through some of these avenues have dropped, but not by nearly the same amount. This suggests that its growth goes far beyond mere substitution between transfer modes within the financial sector.

This evidence is reinforced when we look at the total value of transactions (in reais). In this case, the shrinkage in the other modalities is even smaller. In fact, despite staggering growth, Pix is ​​still not the leader when comparing value. TED transactions still dominate, due to their high average value.

Thus, Pix is ​​by far the leader in transactions, but not in value. This implies that it tends to be used more for transfers of smaller amounts.

As mentioned, Pix’s growth has not been accompanied by a corresponding drop in other ways of transferring funds within the financial sector. But there are possibly effects outside the financial system that these data do not capture. My suspicion, especially given the small average values ​​associated with Pix, is that it is replacing cash transactions.

If this is true, the Pix’s impact on violence is far from obvious. On the one hand, we have the traditional effect: with greater ease in transacting, there are more opportunities for theft. On the other hand, people and companies would carry less cash, which would reduce opportunities for criminals at this end (which is particularly attractive, as cash is less traceable).

In the near future, our academic economists will be able to evaluate this conjecture more rigorously.