Banks lose BRL 2.7 billion in fees and seek to diversify Pix

As Pix gained ground among Brazilians, the country’s five largest banks saw their current account service revenues drop by nearly R$2.7 billion in 2021. But the system also opened up new business and earnings possibilities, such as credit offer for transactions via Pix.

After Bradesco, a pioneer in the modality, Santander launched, at the beginning of March, the option of Pix in installments, heating up the dispute in the sector.

István Kasznar, professor at the Brazilian School of Public and Business Administration at Fundação Getulio Vargas (FGV/EBAPE), highlights that Pix and its new features are part of the digital transformation strategy in the financial system.

“It is not surprising that the banking system, especially the large retail bank, is having to review its integrated portfolio of products, services and fees,” he said.

In 2021, operations via Pix increased more than five times at Santander, with a transacted value of around BRL 20 billion between individuals. Meanwhile, revenues from current account services totaled BRL 3.80 billion, compared to BRL 3.96 billion in 2020, down 3.9%. In this context, the bank advanced in a new line of business.

“Divide o Pix” is a new personal credit operation made available by Santander, in which the account holder can pay the amount of the Pix sent in up to 24 installments. Interest, ranging from 2.09% per month, and IOF (Tax on Financial Operations) are charged on the transaction, in the minimum amount of R$ 100.

“Usually, people seek credit in installments after having consumed and need a financial breath. Our thought was to invert this logic and enter the exact moment when people are consuming”, said Luciana de Aguiar Barros, director of Credit Products for Individuals from Santander.

According to her, 80% of the customers who paid the Pix in installments are not trivial borrowers. In the first week of operations, the bank recorded more than 2,000 transactions in the modality, with an average installment of 12 installments and an average value of R$ 880 – double the average amount of operations via Pix (R$ 400).

According to other bank employees, a service in which the customer can choose the debit date for transactions carried out through the instant payment system is under development.

Serving the corporate segment in the offer of credit via Pix is ​​on Santander’s radar and also on Bradesco’s for the coming months.

Bradesco was the first to launch itself in the segment of credit service via Pix for individuals, in November 2020. In just over a year, it reached 850 thousand people and released R$ 170 million in this type of loan, with interest at from 2.36% per month.

“In the last quarter of last year, we grew more than 70% in the number of credit conversions in these contextual Pix journeys”, said Alessandro Zampieri, director of Credit Products at Bradesco. Today, the average value of transactions via Pix is ​​R$200.

According to Julio Paixão, director of Loans and Financing, when the customer needs a supplementary amount to complete the payment via Pix, Bradesco offers, in real time, the credit option to the account holder, and the person decides on the spot. whether or not to accept the loan conditions.

Unlike competitors, Bradesco did not see its revenues from checking account services drop last year, but it had a reduction in income from bank fees from R$7.98 billion to R$7.76 billion between 2020 and 2021.

Roberto Campos Neto, president of the Central Bank, stated at a BIS (Bank for International Settlements) event that the largest financial institutions in the country understood throughout the process that, by diversifying their portfolios from the new opportunities created by Pix, they could expand their monetization methods.

In the wake of the evolution of credit via Pix, Bradesco plans to include another offer scenario. “We made a lot of journey for customers without a limit balance, but the idea is also to offer credit options for those who have a limit balance and want to pay the Pix in installments”, said Zampieri.

While Bradesco and Santander are more advanced in the discussion on the subject, Banco do Brasil says it has already started studies to offer the credit service via Pix and Caixa says it is studying formats to make credit available. Both were the main affected by the drop in revenues from current account services.

Itaú is another company that plans to enter the segment. A project aimed at carrying out revolving or installment payment transactions using Pix features was selected to be part of the Regulatory Sandbox — a BC initiative that tests innovative financial projects.

The initiative is led by Itaucard, a subsidiary of the bank responsible for issuing and managing credit cards. Itaú, however, declined to comment on the matter.

For Nathália Rodrigues, better known as Nath Finanças, credit via Pix can be positive for families who need to pay a bill, for example. But she warns: “Although the bank [Santander] give this option to pay in installments, we have to understand if it’s really worth paying in installments.”

The specialist in financial education points out that the lack of knowledge about credit, added to the shrinking income of Brazilians, contributes to the indebtedness of families.

“Indebtedness tends to be boosted when we don’t have financial education, when we don’t earn a decent wage, don’t have access to fair credit or don’t know how to use it to our advantage,” he said.

Nath Finance’s tip to avoid over-indebtedness, and default, is to wait for an installment plan to end before starting another. The installment payment of Pix proposed by Santander, for example, does not consume the credit line of the cards.

In December 2021, the average debt level of Brazilian families hit a record, reaching 76.3%, according to data from the CNC (National Confederation of Commerce in Goods, Services and Tourism).

Serasa identified 64 million Brazilians in default. The trend is that this number will rise this year with the increase both in inflation and in interest rates, with emphasis on the revolving credit card, overdraft and payroll-deductible credit modalities.

Banks that offer loans in transactions via Pix say they value responsible credit. According to Bradesco, as the customer’s commitment to income increases, their ability to obtain credit decreases.

Santander, on the other hand, said that Pix credit in installments offers better conditions than other types of services, such as overdraft, and reaffirmed its commitment to the financial health of its customers.