From Cross-border Pix to recurring payments, see what are the main improvements Brazil's Central Bank is working on for the revolutionary instant payment method.
Focused on establishing Brazil as a leader when it comes to financial innovation, the country’s Central Bank puts Pix at the center of its strategies. Rightfully so — the instant payment method was a game-changer, having been adopted by the population so quickly and widely that it already became an intrinsic part of Brazil’s payment landscape.
With well over 1 billion transactions per month, Pix has already received new features and should become even more complete in the next few years, as the Central Bank keeps studying to establish Pix not only as a leading payment method in Brazil and Latin America, but worldwide.
Therefore, the country’s Central Bank is continuously working on new features for Pix, which help increase user retention and conversion. In this post, let’s understand more about what’s to come for Pix and the main additions already made to the instant payment method.
When this feature is released, users will be able to use Pix to set up recurring payments for services such as Netflix, Spotify, and other types of subscription services. This will facilitate payment for consumers who don’t have credit cards, for example, who right now have to turn to less practical payment methods, such as cash-vouchers and gift cards.
Brazil is the second country in the world with the highest rate of streaming service users: 64.58% of the population has at least one streaming service, behind only New Zealand (65.26%), according to research from Finder. The worldwide average is 55.71%. Thus, it’s a market full of potential of increasing Pix’s numbers even further.
Pix Credit for installments
Paying in installments is a common habit for Brazil’s credit card holders: BoaCompra’s white paper on e-commerce and payments in Latam shows that up to 50% of e-commerce payments paid by credit cards are made with installments, depending on the merchant.
However, while Brazil has a banking penetration rate of 86%, only 36% of the adult population has a credit card — and, therefore, are able to pay in installments. Pix Credit then comes along to increase access to this payment practice. Some financial institutions already offer this opportunity, but it’s not yet regulated by the Central Bank.
Brazilian users could soon have the possibility of setting up automatic payments for electricity bills, water bills, and others, through Pix Direct Debit. Compared to regular direct debit offered by banks, the advantages are the greater agility and security of Pix transactions, both for the user and for the company.
Another benefit is that, since Pix is wholly controlled by Brazil’s Central Bank, consumers could choose this option with more freedom, without depending on what their bank accepts or not for direct debit.
We’ve saved the best for last: cross-border Pix is high on the list of features the Central Bank wants to implement. It should still be a few years away, but the idea is to integrate Pix’s system to other instant payment systems around the world.
With Cross-border Pix, Brazilians would be able to send money in Reais to an instant payment key in another country, and that user would receive it directly in their national currency, and vice-versa. That is, making cross-border transactions would be as easy as making a Pix transfer or payment is today.
It’s a big project that requires innovative technology, regulatory studies, strong security measures, and robust integrations with many different systems, so Brazil’s Central Bank doesn’t expect it to be launched that soon. However, when it does come, Pix could revolutionize cross-border payments as it already did with transactions in Brazil, where the instant payment method quickly became a phenomenon.
Already live: Pix Change and Pix Withdrawal
In December 2021, a little over a year after the release of Pix, the Central Bank implemented two new features for the instant payment method: Pix Change (“Pix Troco”) and Pix Withdrawal (“Pix Saque”).
With Pix Change, users can pay for a purchase with Pix and then receive the change in physical cash. Since cash is still routinely used in Brazil, even as digital payments rise, the feature is useful for some users: from December 2021 to June 2022, Pix Change was used almost 3 thousand times.
Pix Withdrawal was considerably more successful, since clients can use it whenever they need cash, with no purchase involved. With this functionality, people that have a Pix key can go to any establishment that offers Pix Withdrawal to withdraw money from their own account. From December 2021 to June 2022, it was used over 220 thousand times.
Pix’s success leads Brazil's Central Bank to continuously invest in the fastest-rising instant payment in Latin America. To keep up with the current Brazilian payment landscape, offering Pix as a payment option for your consumers in the country is a must. Talk to BoaCompra and see how our Payment Processing Solution can help: