In a significant shift in Brazil's financial landscape, Pix, an instant money transfer tool, has become the most common form of payment by transaction volume, outpacing traditional non-cash methods. Central bank data reveals that Pix accounted for 29% of transfers in 2022 and recorded 153 million transactions totaling R$76 billion ($15.3 billion) in a single day this month. Despite being introduced nearly three years ago, it has already been adopted by approximately two-thirds of Brazil's population, or about 140 million people.
The tool, which requires users to have an account with a bank, fintech, or digital wallet provider, has been particularly beneficial for Brazil's substantial informal workforce and low-income individuals. It has boosted financial inclusion and reduced business costs with its speed, ease of use, and reliability. The majority of Pix transactions involve relatively small amounts of money.
Ceres Lisboa, a senior analyst at credit rating agency Moody’s, noted that Pix's introduction has significantly increased participation in the financial system. On a global scale, Pix is the second most-used real-time electronic transfer system after India’s United Payments Interface (NASDAQ:TILE), according to a report by ACI Worldwide (NASDAQ:ACIW).
Angelo Duarte, head of the Department of Competition and Financial Market Structure at the Banco Central do Brasil (BCB), stated that one of Pix's goals was to reduce the use of cash across Brazil's vast territory. The tool has expanded financial services to previously underserved consumers and opened up access to online shopping. Many Brazilian e-commerce sites do not accept debit cards, making Pix an appealing alternative.
Despite Pix's rapid adoption and success, it represented only 12% of the value of non-cash money transfers last year. Other payment methods like debit and credit cards remain popular, with traditional bank transfers still dominating overall volumes. However, banks are creating services around Pix to compensate for the loss of transfer fees, suggesting that its influence is likely to grow.
The development and operation of Pix cost taxpayers $4 million and $8 million, respectively, in 2022, according to the BCB. The tool is free for consumers, although businesses can be charged. For street vendors and taxi drivers, using Pix is often cheaper than wireless card machines.
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