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Brazil central bank launches instant payments system ‘Pix’

BCB president Roberto Campos Neto: speaking at this week's press conference to launch Pix | Credit: Banco Central do Brasil

Brazil’s central bank has this week launched a state-run instant payments platform for citizens, the private sector and government entities as it looks to boost competition.

The scheme – ‘Pix’ – is being introduced as part of ‘Agenda BC#’, an ongoing Banco Central do Brasil (BCB) initiative to promote structural change across the financial sector to keep pace with and capitalise on technological advances.

Pix transactions are initiated through either what is described as an ‘alias’ (effectively a personal code that looks similar to a zip-code) or by a QR (Quick Response) code, BCB said as it announced the rollout. The central bank describes the scheme as an ‘instant, low-cost, safe and intuitive’ means of payment.

The scheme, which is free of charge for citizens, has entered full operation across 734 organisations – for example, payment institutions, banks, fintechs, credit companies, credit unions, and saving and loans associations – after a couple of weeks of ‘restricted’ use.

Up to 15 November, more than 71 million Pix aliases had been registered and more than 1.9 million transactions had been carried out, in total worth more than BRL 780 million (about $144.5m), according to the BCB.

WhatsApp authorisation ‘advancing a lot’

Pix’s overarching aim is to encourage competition in the financial sector and better services, whether users are citizens, businesses or governmental entities, as well as helping with financial inclusion, the BCB said.

It is also aimed at encouraging the digitisation of payments which, the BCB said, can reduce the ‘social cost associated to paper-based instruments’ (paper money). The central bank believes Pix will mean a ‘better payment experience’ for the Brazilian population, which is estimated to number about 212 million.

The central bank’s president, Roberto Campos Neto, told a press conference (in Portuguese) to mark Pix’s launch that the BCB seeks to encourage all payment arrangements that are competitive, inclusive and that are fully regulated.

The BCB suspended WhatsApp’s payments feature in June, just days after the Facebook-owned messaging service announced its rollout. But Campos Neto said at this week’s press conference that WhatsApp would start P2P (peer to peer) payments “soon” in the country and that its journey towards authorisation is “advancing a lot”.

Pix open to expansion from next month

The BCB says a further ‘homologation’ phase for Pix will start on 1 December. This means that, from next month, a new window will open up for further institutions and organisations to join the scheme. Organisations looking to do so must apply and register with the BCB to start the authorisation process.

Pix falls under the ‘competitiveness’ stream of Agenda BC#, which was launched by the central bank 18 months ago.

Its launch comes shortly after the BCB’s recent announcement of details of a regulatory sandbox for new fintech initiatives.

Global Government Fintech reported last week that the BCB had unveiled guidelines for the operation of a ‘controlled tests environment for financial and payment innovations’. The sandbox is also part of Agenda BC#’s competitiveness dimension.