In Payments

The success of Pix is far from over. Data from Americas Market Intelligence (AMI) show an adoption rate of 73% among Brazil’s adult population—according to the number of users with a registered key. At the same time, the more than 9.5 billion transactions done in 2021 have turned Pix—a mobile payments system developed by the Central Bank—into the instrument most used in Brazil, exceeding credit cards, debit cards and the boleto (a system that uses payment slips).

Below we present the situation of Pix and the disruption it has caused in the Brazilian payments ecosystem, including its potential for e-commerce and new solutions in the 2022–2023 period. This article is a summary of a recent AMI Coffee Chat on this topic. Payments Coffee Chats are weekly Zoom meetings where experts on payments in Latin America discuss the latest advances and trends in the sector.

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Current Situation of Pix in Brazil

The Pix electronic payment platform allows for electronic transfers between users in real time. Users can easily register with the system using a key (chave,in Portuguese), such as an email address or telephone number. With Pix, a user can have several accounts, and can also set up different keys in the same user account.

Pix was launched in November 2020, with integration into the various banking apps in Brazil. From then on, the numbers began rocketing. As of May 2022, the Pix platform has close to 129 million users and 454 million registered chaves. 96% of these users are individuals (as opposed to organizations).

“Pix is growing much faster than any other payment method in Brazil, according to conversations we have had with players in the ecosystem and with payment processors,” says Marina Gil, a Brazilian affiliate of AMI’s payments division. “Pix will very likely continue to grow considerably over the next few years, ahead of any other payment method.”

Potential for P2B Payments with Pix

Additionally, AMI analyses show that 73% of Pix transactions in 2021 were person-to-person, or P2P. However, P2B payments with Pix are gaining momentum, as they obtained an 18% share in number of transactions during 2021.

In terms of transaction volume, P2B payments through Pix accounted for 10% of its total in 2021, reaching 84 billion dollars. This P2B payments dynamic reveals Pix’s potential as an instrument of e-commerce, as we will see further on.

P2B payments through Pix accounted for 10% of the total transaction volume in 2021, reaching 84 billion dollars

According to experts, there are two different stages and scenarios of P2B with Pix in Brazil.

  1. Immediate-payment P2B sales models: e-commerce, supermarkets, pharmacies, and retail
  1. Post-sales P2B model: subscriptions and payments of bills for services

Evolution of Pix Compared with Other Payment Methods in Brazil

“One of the most surprising things about Pix is that, just one year on from its launch, the system surpassed all other payment instruments in the country in terms of the number of transactions,” says Marina Gil. “In transactions, Pix overtook the most popular methods at the time, such as credit cards, debit cards and the boleto, and other methods with a smaller share, such as TED (the bank transfer system formerly most-used in Brazil), DOC, and prepaid cards,” she says.

In fact, during the fourth quarter of 2021, the number of transactions in Pix reached 3.9 billion. Compare that with 3.8 billion debit card transactions, and 3.7 billion credit card transactions. The TED (Available Electronic Transfer) system, which preceded Pix, reached just 294 million transactions in the same quarter.

Nevertheless, Marina explains, TED transfers are still the predominant payment method in terms of transaction volume, out of all Brazil’s payment instruments. In the last quarter of 2021, TED transfers recorded a volume of BRL 9.8 trillion, compared with Pix, which recorded BRL 1.9 trillion (USD 357 billion). On the other hand, in terms of volume, Pix overtook credit cards, which recorded a volume of BRL 470 billion (USD 87 billion).

Pix’s Potential for Electronic Commerce

“When Pix began, and to a large extent because it began, it became common to see advertising about payments with QR codes in brick-and-mortar stores, which was accompanied by the use of chaves (keys),” recalls Marina Gil. This dynamic evolved until it began impacting online commerce in Brazil: AMI analyses show that 70% of all online stores in Brazil now accept Pix as a payment method. “Market players believe Pix will account for between 30% and 40% of e-commerce payments over the coming years,” says Marina, “in fact, for some businesses in Brazil, Pix is already the second most-used payment mechanism.

According to AMI data included in our datapack, in 2021, Pix obtained a 15% share in payment methods for e-commerce, capturing part of the payments with boleto and the credit card. This is further evidence of Pix’s higher penetration in digital purchases. “It is the first time in history that we are seeing a method like the credit card—whose share had been growing since 2016—losing market share in Brazil, apparently due to the accelerated increase of another payment method like Pix,” says Marina.

Marina points to three potential factors involved in the success of Pix for e-commerce, above other payment methods:

  • Dynamics in the Use of Payment Methods. “Before Pix, many people would borrow credit cards from friends or relatives to make online purchases, as they found using boleto inconvenient. Although boleto is still relevant (as it captures the percentage of the population that are not banked), those with access to a bank primarily use Pix.”
  • High Declination Rate in Credit Cards. “Additionally, Brazil has seen a high rate of declined transactions with credit cards. Pix, on the other hand, has proven to be a fluid, easy mechanism for its users.”
  • Slow Growth of 3D Secure in Brazil. “Last year (2021), merchants and payment processors made efforts to accept debit cards, especially because of the COVID subsidy the government handed out through virtual debit cards. However, at AMI we found that this strategy did not have the success expected. We believe this was because the 3DS security protocol was not developed in the way it was anticipated. Pix authentication methods are much better.”

Projections and Scalability of Pix

Although Pix adoption in Brazil has been highly successful, neither the Central Bank nor the sector’s players have decided to stop there. Proof of this is the development of Pix Saque and Pix Troco, two solutions launched at the end of 2021. Pix Saque allows users to make cash withdrawals in commercial establishments and ATMs. For its part, Pix Troco or Pix Cashback allows the user to make payments above the purchase amount at establishments in order to receive the cash back from the extra amount they have paid.

Additionally, according to Marina Gil, other solutions within the Pix ecosystem are planned for 2022 and 2023. One of them is the Pix Débito Automático option, which allows users to make automated monthly payments through Pix. Another solution that could be available in 2023 is Pix Garantido, the first Pix credit product, which will allow users to pay for purchases in installments.

Lastly, Pix Offline will be the new Pix initiative in real-time transactions made without being online. This Pix feature is currently in the testing stage. The arrival of Pix Internacional—a model that promises to be disruptive by allowing cross-border transactions—is also anticipated. Pix Internacional is expected to begin development in 2023.

Download the AMI Payments Coffee Chat Presentation

Updates on Pix and what is coming next

We also invite you to register for AMI Payments Coffee Chats to get the latest first-hand news on the payments sector in Latin America.

Moving beyond chats

Contact us if you would like a detailed investigation about Pix in Brazil, or about other payment systems in specific markets. Americas Market Intelligence can design and implement a personalized study focusing on solutions to enable your company to minimize risks and increase its chances of success in Latin America.

In addition to Pix, our market intelligence team can help you with research on a range of relevant payments-sector topics in Latin America, including cryptocurrenciesBuy Now Pay Latere-commerce, payment methods between consumers and SMBs, mobile wallets, open banking, and much more.

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