Pix: the Brazilian innovation that transformed instant payment system

Projected and implemented by the Central Bank of Brazil (BACEN) as an instant payment system that it’s available 24/7 and works through high speed internet using ID keys, Pix was released at November 2020, and became the major payment method used in Brazil, prioritizing speediness, low cost and interoperability between Brazilian financial institutions.

Not even after 2 years in operation, Pix did overtake credit cards’, TED and DOC’s transactions, which are different forms of wire transfers. While TED usually doesn’t arrive the same day, DOC, discontinued in 2024, was a done deal but had a limited transfer amount (approximately US$932). As the leading payment method used in the retail sector, Pix increased the access to electronic payment methods, reducing costumers’ and retailers’ costs, aside from accelerating the informal economy’s digitisation. With a massive population adherence, Brazil is now seen as a technological innovation reference centre, due to its instant financial system’s management and wide spreading on a national scale like Brazil.

Because of ID keys and transaction’s QR-code usage, the Pix’s implementation contributed decreasing the transaction’s complexity, incident fees, and operational costs once card terminals are no longer needed. Before Pix, the small retailers and unbanked costumers were limited to use paper-money for transactions, but BACEN worked for the financial inclusion of these people.

The Brazilian payment system stands out for its transactions’ traceability and cross-checking data at BACEN, which formalised the retail’s economy transactions and, alongside to the competitiveness’ and innovation’s incentives for financial services, Pix played an important role on the growth of fiscal collection.

As for regulatory risks, the fraud transactions’ reversal time was reduced even though BACEN is constantly improving regulations and implementing preventive actions as real time fraud detection, real accountability and refund’s mechanisms. Pix was structured to concentrate transactions’ data at BACEN for a better management of ID Keys and personal data treatment pursuant to the local general data protection regulation. In this regard, prudential terms are strictly observed, so sudden changes on transactions’ behaviours do not compromise financial institutions’ stability or liquidity.

Brazil adopted a centralized approach, being BACEN the designer and operator of a groundbreaking “state-owned Fintech”. This structure is therefore being studied by other central banks and international organizations as an alternative to promote financial inclusion and market competitiveness. Some countries and institutions, as well as the Bank for International Settlements (BIS) and the International Monetary Fund (IMF), see Pix as a role model in controlled management by the central bank, national popular adherences results, interoperability and data protection.

The global discussion on this subject highlights the general interest on Brazilian technology and experience. Nowadays samples of a “Pix cross-border” are already being considered, even with speculations of bilateral agreements non intermediated by other currencies as the American dollar. Brazilian Pix is a benchmark for its innovation, public politics and regulation that led to a solid popular financial inclusion reality and fiscal collection efficiency, without undermining Brazilian financial system’s security and supervision, but building the future of the money.

Ana Clara Arantes Megid
Romano Donadel Lawyers
Uberlândia, Brazil

Wanderley Romano Donadel
Romano Donadel Lawyers
Uberlândia, Brazil

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References:

• Central Bank of Brazil. Pix, page and statistics, management report, Available here. 
• Rocha, Gustavo H. R. Pix impacts on National Financial System (2020–2022). PUC-Goiás, Available here.
• Schapiro, Mario G.; Mouallem, Pedro S. B.; Dantas, Eric G. PIX: explaining a state-owned Fintech. Scielo Brazil. J. Polit. Econ. 43 (4) Oct-Dec 2023, Available at: https://www.scielo.br/j/rep/a/nyNzzZP7CXyPHvJgmMQV6Xw/?lang=en
• International Monetary Fund. Western Hemisphere Dept. Pix: Brazil’s Successful Instant Payment System. International Monetary Fund, Volume 2023: Issue 289, Available here.
• Angelo Duarte, Jon Frost, Leonardo Gambacorta, Priscilla Koo Wilkens and Hyun Song Shin. Central banks, the monetary system and public payment infrastructures: lessons from Brazil’s Pix. BIS – Bank for International Settlements, Available here.
• Krugman, Paul. Has Brazil Invented the Future of Money? And will it ever come to America? (July, 22, 2025). Paul Krugman Substack Notes on economics and more, Available here.
• Sarkisyan, Sergey. Instant Payment Systems and Competition for Deposits (June 12, 2024). Jacobs Levy Equity Management Center for Quantitative Financial Research Paper, Available here.