I'm thinking, maybe controversially, centralized national payment service like this should be government-run based on my experience with Alipay which is a digital payment service in China.
Due to it's commercial origin, Alipay is filled with unwanted ads and traps. Almost every time I made a payment with it, a pop up prompts me to enlist their Ant Financial LOAN service either now, or being prompted for the same question again 30 days later (yep, not Yes or No, but Now or Later). It's just fucking ridiculous, I don't need a LOAN for a $400 projector, and I don't need a LOAN for a $4 hair cut (Xi should probably do something about it, really).
I'm glad that at least people of Brazil don't have to suffer that kind of shit. At least their government-run program is better scrutinized and boring, thus more dependable, that's a good thing in my eyes.
> Pix has spiced up Brazil’s fusty banking sector, but it gives the central bank a worrying amount of power
I think a largely prefer a government-run payment system than an US company monopoly.
As a Brazilian - Pix was a pleasant surprise, especially in that for once it feels like we're not lagging behind. It's convenient, free, instant transfers across banks. You can also easily create or programmatically generate QR codes or pastable codes with preset receivers and amounts. Great UX all around, and it quickly became the de-facto standard in how people send money.
It's technically quite impressive - it's a large scale thing and it works really well. I can think of maybe one or two times in these years where I saw downtime, and in both cases it was working again after a few minutes. The usual experience with the government building technical solutions is to have something that makes little sense, is slow, and goes down frequently with even the most predictable usage peaks, but with Pix they really seem to have nailed it.
It does feel a bit weird to have so many payments go through the government's systems, and it definitely feels like it puts them in a position of having more information than they should. There's a lot of Orwellian surveillance potential there, as any transfers are necessarily tied to both users' real identities. I don't think there's a realistic way around this, though.
Another concern is that people can expose some of their information without necessarily being aware of it. You can register e.g. emails and phone numbers as Pix "keys", and then anyone can initiate a transfer to those keys and your full name will pop up so you can confirm or cancel the transfer. I've seen some clever advice around this - "When using a carpooling app (often details are arranged off the platform using WhatsApp), put the driver's phone number on Pix. If a name comes up and it doesn't match the name or gender of the driver's profile, something is up". Obviously though there's potential for misuse and I'm sure the vast majority of people don't think about this when registering their Pix keys. You can, however, just use randomly generated uuids as keys as well, a different one for each transaction if you so desire, so this one can be a non-issue with more awareness.
Overall though it's a very convenient thing which works surprisingly well, and the downsides are theoretical at this point. IMO it's a rare case of our government nailing something.
WhatsApp is omnipresent for communication in Brazil, and WhatsApp Pay was ready before Pix, but the government blocked the launch to launch Pix first.[1] I rarely see this mentioned.
[1] https://www.reuters.com/article/technology/brazil-suspends-w...
Given the fact that the central government uses taxes to fund the creation and managements of a countries currency, it makes perfect sense that in the digital age it should also be funding the infrastructure to send digital transactions with that currency. I wonder how differently the internet would have developed if microtransations were free and easy to transfer.
Sweden has had a similar system for several years before PIX in Brazil. It is also integrated with the digital ID system (BankID). The main difference is that the Swedish system is ran through a private organization managed by all the major banks (and the central bank) in conjunction. So the central bank doesn't have direct access to the transaction data technically.
While the Brazilian system is only interacted directly through your bank application, the Swedish application is a separate application tied to your bank account in the backend. Given the... quality of bank apps this is a huge plus. The Swedish Swish app is MUCH easier to use because it only does one thing. My Brazilian mother does not know how to send PIX because her bank app is very confusing and the PIX option is just one of many.
The BankID system of Sweden though is even more impressive than money transactions, pretty much everything government related (including healthcare, taxes, etc) and most private institutions (bank apps, Swish, digital contract signatures) is done through the unified BankID login.
People raised concerns over privacy, but the main problem really is that since these systems cut out the middle man (Visa/Mastercard) and have no fees you also have no fraud protection which is something to keep in mind when using them. Once you send the money it is gone, the banks will not give it back to you even if you got scammed. It creates a whole sort of scam industry in both countries.
As a foreigner that visited Brazil for some weeks, I found the ubiquity of the PIX payment system to be a handicap for tourists visiting the country.
PIX is only for locals as you need to register with a CPF (Brazil ID number which is hard and tedious to get as a tourist). I ran into many scenarios where the only option was to pay with PIX and the staff aren't used to tourists and look at you funny when you explain you can't use PIX.
Also beyond PIX, if you try to book buses, planes, or take out a gym membership, while you're within the country, 99% of the time it's shockingly impossible to pay without a CPF, even by credit and debit card. I've even seen this for paying the laundry machine.
I'm sure the PIX system is great for Brazilians, and it was helpful having a local friend to make payments on my behalf, but Brazil really lives in a bubble where it seems a side-effect of their system is making things actively very hard for visitors to operate within the country.
Sometimes there's no point in having market solutions. You need one thing that works for everyone and is free. It's cheaper and easier this way.
Despite a global move towards a cashless society, 54% of Brazilians now opt for cash withdrawals.¹
2024 has seen a surprising reversal, as cash usage makes an unexpected comeback, defying predictions that the world was moving toward a cashless society. With rising cybersecurity threats, concerns over financial privacy, and economic instability, consumers and businesses are increasingly turning back to physical currency as a preferred transaction method.²
¹) https://www.riotimesonline.com/brazil-news/brazils-shift-bac...
²) https://www.adeptswipe.com/cash-makes-a-shocking-comeback-as...
I agree its an amazing payment method, it worked for me for most of the time. Still, we depend on bank's stability and technical availability for it to work. Once i needed to pay for something and forgot my card at home, at that same time my bank was going trough technical issues and i couldn't pay.
Despite rare reliability issues, my fear about it is that it requires a phone. Being so popular, i fear when places will refuse any other form of payments and accept only PIX, making anybody not using a phone unable to buy their products, with the common assumption that everybody uses it ("don't you guys have phones???"). You can't install banking apps on rooted phones or alternative mobile OSs (or is very very hard), so you are trapped with Android or IOs to use it.
I hope it doesn't come to that, but it seems it's going that way.
India's UPI is similar and runs at even larger scale
Reference: https://www.gonuclei.com/blog/upi-vs-pix-unpacking-the-simil...
I wish more of these government-baked payment systems would just use GNU Taler [1] instead of implementing their own walled gardens.
GNU Taler ensures that the paying customer is anonymous while the merchant is identified and taxable. This is great for privacy, but not very attractive for commercial companies as your revenue has to be fully based on fees instead of making extra money by selling your customers data. The Swiss National Bank showed interest in adopting it some years ago, but I haven't heard much anymore since…
It is interesting that I did no see in the comments the costs of using Mastercard & Visa as a reason for governments to find alternatives for their economies.
Both Visa and MC are US companies so there is where the profits go ....
From US Senate hearing : "This is classic, classic monopolistic behavior. Yet you're testimony...is you don't want any competition...I'm having a hard time finding that position defensible, let alone sympathetic...it's unbelievable the amount of money you're making."
Margin 50% ....
Pix (and UPI, a related system in India with similar success) are my two go-to examples for how it makes sense for the central bank / public sector to get into the retail payment space. It baffles me that most major central banks (that are considering it at all) are considering doing so in the form of CBDCs [0]. CBDCs are like a bundle of two services, central bank money and a payment system. The central bank money part is the one that has everybody questioning its use cases, the reason why banks generally oppose it (hence making them likely to nudge their customers away from it), and it's a genuine financial stability concern that requires safety measures like holding limits [1] that complicate UX and/or the design.
The payment system is the part that imho makes complete sense, in multiple ways: more competition in a market dominated by two US networks, strategic independence wrt to a critical infrastructure, providing a public good for underbanked demographics,... I don't get why places like the ECB, Bank of England, Bank of Canada, PBC,... (the US Fed is one of the few not pushing too actively in that direction) insist on bundling the two together instead of focusing on the payment system. If you succeed there, the potential for success is massive, without needing a central bank money feature, as shown by Pix and UPI. Getting one such feature right is hard enough, I don't get why they don't just focus on that and leave the central bank money baggage by the wayside.
[0] Central Bank Digital Currency, a form of money that has similar UX to bank accounts but represents a central bank liability, as opposed to commercial bank liabilities like your usual bank account. It doesn't need deposit insurance, it's legal tender and is at the same level as physical cash economically (M0).
[1] see eg https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op326~d5c223d9b...
Same with India's UPI https://www.npci.org.in/what-we-do/upi/upi-ecosystem-statist...
The EU would do well to study Pix and it's rollout as it seeks to replace US payments systems across the bloc:
https://www.businesstoday.in/world/us/story/march-to-indepen...
A fun fact, one of the biggest PIX players is also the company that acquired Cognitec¹, the company behind Clojure and Datomic. Until not long ago, Rich Hickey was part of the staff².
1. https://building.nubank.com.br/pt-br/nubank-acquires-us-comp...
2. https://building.nubank.com.br/clojures-journey-at-nubank-a-...
I'm a Brazilian. Everything here can be paid through pix. It's very convenient, fast reliable and, for a country like ours where walking on the streets with money is a risk, safe.
There's only one reason I don't use it: there's no FLOSS app (AFAIK) to use it.
Something as common as the dominant payment system should not depend on proprietary software.
See relevant regulation for the Pix payment system and protocols:
https://www.bcb.gov.br/estabilidadefinanceira/pix?modalAbert... (Brazilian Portuguese)
See also relevant regulation for the instant payment system (SPI):
https://www.bcb.gov.br/estabilidadefinanceira/sistemapagamen... (Brazilian Portuguese)
We have a saying in Brazil that absolutely no part of our government works, except for our IRS. Pix is such a huge win for them. Brazil has a huge informal/illegal economy that employs more people than those who are lawfully employed (40M vs 39M). We have an effective tax plus legal compliance rate of around 60%, that really stifles down anyone attempting to open a legit business in an already harsh environment. Pix has not yet been used to crack down on the informal sector, but with sufficient motivation and some data analysis, it absolutely can be.
It's surprising how far Brazil has come in terms of financial transactions. Truly something amazing.
It's also unsurprising to see outlets like The Economist somewhat criticise this, along with fintech corporations, because the government is offering a free and high quality alternative to something that companies would have done exactly the same but for money.
Before PIX there was TED which worked normal but you usually had to wait up to 3 hours to clear the transfer. Now because of the offload caused by PIX every single transfer you make through TED takes up to 10 minutes, usually 2, but noone cares. The look of happiness people have when they scan qr-code is the same of that kid that just got an ice cream. The reason why Pix was adopted so rapidly, and is so omnipresent, is because of ease of use. You scan the QR-code and that's it, transaction completed. Nobody mentioned that half of users is unable to figure out how to get started with pix, that is register keys, so they ask some techie parents, friends or go to the financial institution to get them started. Before most people that were inept to type in few necessary numbers to complete a transfer from one bank to the other, now switched to Pix and all they have to do is give the phone number or tax ID and are ready to receive money or scan qr-code to sent it out.
Because of that there is a total inclusion and also utter surveillance. So now in Brazil there are 2 problems, 60-80% of financial transactions are processed by the government and to add to the damage the entire economy is run on one point of failure which is WhatsApp. If at the same time, 2 of them would stopped, let's say for 3 weeks or maybe less, entire COUNTRY would do down the drain.
All the alternatives are fading away, lots of people don't even know how to change a ringtone on the phone but know how to do everything through WhatsApp. Try to ask, not even demand, in random business to provide you with alternatives for contact, you'd get that look saying GTFOOH. If pix would stopped, people would not go to atm to withdraw money, they'd wait until it'd come back online. When WhatsApp stops for few hours it feels like Sunday morning before the picnic.
Government+meta=success story of Brazil
Pix is super interesting. I have two questions to which Google wasn't able to provide quick answers:
1. Is there an easy way for a US resident to sign up for a Pix-enabled account (e.g. at a Brazilian bank?)
2. Can Pix be used easily for online payments?
If both are true, it seems like it could be used as a drop-in replacement to crypto for small-value transactions which are currently infeasible in the US due to transaction overhead and fees.
This is were many central banks have failed. It is the job of the central bank to ensure payments can be made by everyone and to stabilize the currency.
As payments have shifted from cash to digital this control has shifted to private sometimes foreign entities with their own view of what payments are permitted and which aren't.
Brazil was in constant economic chaos in the 80s and 90s, so the banking system invested a lot in automation and communications.
I actually think it took too long for Pix to be invented. The piping was all there. Somebody just had to have the idea.
Even in the 80s you could easily transfer from any bank to any other bank.
Pix has really spurred up small local businesses. It's so much easier to buy digitally from local stores now, or even just a person starting up a business because it required no setup, no fees or anything.
If I need to buy a gift for someone from a store at the mall, for example, I just text them, they send me pictures with the options, I pay instantly via pix and they send the product through local delivery. The whole thing takes 5 minutes of my time and the purchase shows up on my door in 30 minutes. I saved on time, gas and parking, and meanwhile the store made a sale through a local employee instead of me buying online from their national franchise for example (if it's a franchise of course). Win win for everyone.
It is something like Polish Blik / Chinese WeChat payment system, I understand?
In '98 I rigged something like Pix using IRC bots and a cron job on a Solaris box. Worked beautifully until daylight saving time, then everybody got paid twice.
Not to mention that soon, it will be able to pay in installments using Pix, that’s called Pix Parcelado.
> Pix has spiced up Brazil’s fusty banking sector, but it gives the central bank a worrying amount of power
Economist what you think central bank does exactly that this is somehow too far?
Theortically it would now be possible to implement a similar service in the US using FedNow: https://en.wikipedia.org/wiki/FedNow
Of course in practice it is a chicken-egg situation. Few people will use it over established credit based systems unless there are other incentives.
Credit card companies, including PayPal & Co, are essentially rent seeking: They are middle men that technologically aren't needed anymore for instant cashless payments, but they still exist because they can extract enormous amounts of profits via fees. But countries like Brazil and India show that they can be replaced with free or almost free systems based on instant bank transfers.
It's true that credit cards still have the use case of providing a "chargeback" service. But this isn't possible with ordinary cash either. Moreover, most people likely buy online from trustworthy shops like Amazon, so this isn't often a problem in practice. In expectation people spend way more money on credit card fees than they ever save with chargeback. Chargeback is like an overly expensive insurance that hardly anybody needs.
Pix is amazing, really. The technical side is incredible—I remember reading or watching some really good content about the architecture, but I can’t recall exactly where and haven’t been able to find it again. All payments have to be completed in under 100ms, which is impressive considering how resilient the infrastructure needs to be to handle thousands of transactions per second.
Can we please have one post regarding a payment system (which works well by most accounts) not be taken over by crypto shills and skeptics whatabouting everything? I've had enough in the past 5 years and I hope it stops soon.
Most people are simple, they want to pay, and get paid, in their local currency. There's a homegrown software which enables them to easily do just that. That's a great technological and social achievement, it would be great if we could discuss that, and not crypto, which is not the main subject here.
This like a public-run PayPal alternative. Other countries have moved beyond this, Saudi Arabia for example created Mada, it's alternative for visa and mastercard. They take close to nothing on transactions, and that's how the government could enforce card payments everywhere.
And the cards are hybrids, they support both visa (or mastercard) and mada.
The long game pattern and cycle is obvious for those with the vision to see beyond the horizon. Politics obviously has a foundation in the choice of countries to control and operate their own payments systems given the value of the data and the social connections it reveals, aka national security. All security starts at the foundation and without financial security one is indebted and controlled by another. As the world enters a new cycle around those changing patterns the basis of the control they seek is founded in individual continuity without exterior influence by their adversaries. This can be seen today with the financial controls that can greatly impact an entire country filled with individuals that have no association with the reasoning of why the restriction was placed to begin with. We have many options today for instant cross border payments and as more and more countries move to own and operate their own payment platforms so too will those cross border payments methods grow in adoption foregoing an adversaries oversight and control.
I speak from direct experience in these words as the architect and founder of multiple acquired payment systems over the decades because this past December I was contacted by an African country seeking to build, own, and operate their own payment platform backed by their energy reserves. The concerns and threats around a country's monetary system are real and in time we will see more and more countries taking up this initiative to cut out the middlemen.
As a bonus over and above countries moving in this direction we can also see businesses doing the exact same thing over the last decade. Thee who controls the money also has induced influence over the users of that money as we see this more and more through 'progress'. Feel free to replace the word "money" with the word "data" in my previous statement as well.
Stay Healthy!
The government already spends money administering the original payment system of cash and coins. I don't see why electronic payments shouldn't also be administered by the government. Letting visa handle electronic payments has turned them into a private tax collector.
None of these systems is global yet. We still have to get a physical card with a magnet, then enter the number of this card and its date of issue and another 3 digit number to the google wallet in order to pay with our phone . And now when i buy a sex toy, everyone including a girl in VISA, my bank, google , my tax service, they all have to know.
Saying this as a user but especially as a central banker and financial economist: Pix is truly amazing, and in fact an inspiration for many other countries. Beyond the payment sphere, we are only now beginning to scratch the surface on the effects Pix (and fast payment methods in general) can have on the economy.
My Brazilian wife always complains about how bad our American banks and money transfer mechanisms are.
I wonder will the SEPA instant work like this.
Privacy conscious people: we can still use your preferred private super secretive way to pay for important stuff, and use PIX for a Coca Cola. One thing doesn’t stop the other.
So this sounds just like PayID in Australia or what was payM in the UK (which got shut down a couple of years ago due to lack of use), minus the QR code generation part.
It's used between private people to make it easier to send money to one another without having to type in bank account details, but never really used to pay businesses (except under the table).
How come this is so popular in Brasil for paying businesses vs using a card or your phone to tap and pay (which seems more convenient)?
I was in Mexico City recently, and boy did I hate rummaging around for cash to make payments. True, many places accept credit cards, but that seems like an unnecessary tax on the merchant (credit cards charge nearly 3% in fees).
A system like Pix (or UPI from India) would be a godsend for Mexico. However, any such system should have support for tourists (non-residents visiting the country briefly).
> it gives the central bank a worrying amount of power
Heh, only an American would say that. What a peculiar worldview.
Brazil government should open Pix to tourists in South America.
I would loved to have used it in Argentina & Brazil.
I tried to find a way to use Pix as a tourist (I'm from New Zealand). It would have been really super handy in Argentina tourist destinations (lots of Brazilian tourists so Pix accepted). Argentina was so painful for transactions I ended up buying Argentine Pesos using crypto. Argentina missed out on thousands of dollars export income from me because I hated their payment bullshit so much that I just left Argentina and went to Brazil instead (with different shenanigans). Turned out I enjoyed Brazil more too (great people).
I also wanted to use crypto because it is such challenging fun to play with using it for money (versus speculating), plus I wanted to learn how to manage the risks of using crypto (so I was willing to pay spreads and risk losses; since I highly valued educating myself).
One American I met had taken thousands of USD in cash to Argentina because blue dollar exchange rate (cambio / cuevas) to gain much better ARS per USD than other ways to pay as a US tourist. More reliable too (I had a few problems paying by card which sucked).
South American governments charge expensive fees and have crappy exchange rates to withdraw their money from ATMs: foolish foolish foolish dickhead governments. I hated their greed so much I just won't return to Argentina (goodbye 10x - 100x the export income versus the gains they nicked from me). Plus ATM limits to withdrawal well below a couple of hundred NZD (or USD) so I couldn't withdraw enough cash to spend - just damn retarded - print some more ya fools. Result is I'll warn friends against travelling to some South American countries (especially Argentina). Tourists are fickle - treat them fairly and make it easy for them to spend money, or they'll visit a different country that cares about earning export income. New Zealand has heaps of tourists so I know both sides of the equation (Overseas visitor arrivals to New Zealand totalled 3.3 million in the 2024 year; with a population of 5 million).
I really really loved Brazilians - I'd return ASAP if Chilean LATAM airlines didn't dominate costs (USD1600).
We are getting a copy of Pix here in Colombia called Bre-B, it will be launched in September 2025.
There's a similar system here in Switzerland, called Twint. It is run by a group of banks though, and I don't know if the central bank is involved. Each bank issues its own App. It had a slow start, but suddenly got a lot of traction, and nowadays you can pay literally everywhere with it. Online shops, regular shops, restaurants, the bars in the stadium of your favorite football club. Person to person payment is also possible. You can also easily create a QR code if you set up a stand at a flea market or something like that, but it's not necessary, since all you need is the cell phone number of the recipient. Everybody with a cell phone is using it, even my grandma. It's a huge success. It works like a regular bank transfer between bank accounts. The banks get no information about what was paid with it, only the amount and from where to whom. The only downside: The banks set fees according to the market, so it's in competition with bank transfers, but also with credit cards like Visa and Master, or Paypal. It's still possible to pay very small amounts of cash like CHF 2.- or 3.- though. Recently, I had a walk with my kid and we walked past a stand where kids sold self made popcorn and cookies. They asked 1.- per piece, and they accepted Twint. I bought some things and paid by Twint to the cell phone number of the kids dad they gave me. :)
Yes, now in Brazil you can hardly find anyone not using Pix. It is all digital and free. Even in Argentina and Paraguay, many local merchants are now accepting Pix.
There is something similar in Poland: https://en.wikipedia.org/wiki/Blik
It is run by the banks themselves though. I like the 2 minute codes aspect of it.
I am wondering if this payments system would be able to make society more resilient to crashes in the banking system.
e.g. banks being allowed to fail, without the payments system stopping working.
CBDCs and privacy don't necessarily need to be at odds!
Cryptography makes it possible to have both! We can have a payment system run by the government and at the same time not need to give up our privacy!
Hopefully ECB’s TARGET Instant Payment Settlement (TIPS) service will enable the same widespread adoption. With a price of 0.002 euro per transaction it’s guaranteed to become the most convenient solution.
Pix is huge and so much better than anything in the world. VAI BRASIL
Is it possible to calculate how much wealth they are saving by not having to create a profit and other kinds of free market deficiencies?
Governments can never do anything right! Shut it down so the private sector can complete with some crappy POS with ads and an integration with some data brokers.
Is there a tech blog of how Pix is built?
It would be great if we could have some sort of roaming to interconnect those country specific systems...
> Brazil’s fusty banking
That's precious coming from an US publication, a country where checks are still used.
Standard workflow in Brazil:
- You need to buy something from person XZ, whether an individual, small business, or huge business.
- XZ sends you an invoice (including relevant taxes).
- You pay the invoice. XZ knows you’ve paid.
- At year end you can download all your invoices, including any taxes already paid, for doing your taxes. (Brazil taxes make American taxation look simple.)
Standard workflow in America:
- “Do you want cash, mail a check, or PayPal/Venmo/Cashapp?”
- “Umm do PayPal but friends and family please… also it’s at my wife’s email that still has her maiden name”
- Zero detail on invoice (maybe a receipt printed on thermal paper or a random email) which you lose by tax time
was it based on India's UPI? If so, this is the basis for SWIFT for BRICS?
There's a lot to discuss here. Focusing on one thing however:
> But unlike India, where UPI is run by an industry body, Pix is managed entirely by the BCB.... the BCB alone runs Pix’s infrastructure and controls the encrypted database that stores all transactions.... This concentration of power in a central bank is unusual, and has led to criticism. “Now we live in a democracy, but imagine if this existed under an autocracy and all your information was available to the government,” says the head of one prominent fintech company. He thinks citizens in richer countries would balk at the government having Pix’s level of access to all financial transactions. Also, if the system is ever hacked or breaks down, the fallout would be greater than if a single bank were attacked.
(Just looking at the privacy aspect) For something like Pix to have a chance at long term success in the US, there'd have to be unambiguous regulation absolutely prohibiting access by the government to transaction information that could be tied to a person. Preferably, it would be technically impossible to tie a transaction to a person/entity without going to the bank that facilitated the transaction and a warrant signed by a judge.
10 years down the road:
IRS: "if we could look at that, it'd be great..."
Police/FBI/NSA: "think of the children..."
etc.
The original dream of crypto was a good one.
How does Pix deal with fraud?
Brazilians are the proverbial boiling frogs....
“Now we live in a democracy, but imagine if this existed under an autocracy and all your information was available to the government,”
the belief that democracy is some sort of bulwark against government surveillance is mindbogglingly naive
.. meanwhile, the EU has been discussing about the Digital Euro for like 5 years
Pix ou presente?
Do not put your money into Pix because Brazil's government has become extremely authoritarian and anti democratic, including jailing political opponents.
How do people pay for illicit drugs, prostitution, bribes, etc.?
I've worked with banking tech for almost 20 years in Brazil. The Pix system is great, but before that we already had TED which was slower but very reliable (the main downside is that it that it closes outside commercial hours for post processing). There are a lot of a lot of other things like Boleto (which are use for billing) and more recently the "Open Finance" system which allows different institutions to share customer data and even perform operations using connect accounts. It allows a customer to, for instance, check all of their balance in a single place. It allow institutions to learn more about you which can facilitate credit.
The reason? Why is a third world, poor country like Brazil so advanced on finance? While there's no single reason myself and most of the execs I've worked with tend to believe in two:
- Fraud, which is rampant in Brazil, incentivizes banks to invest a lot into modernizing their systems
- Complex financial rules, imposed by our government, required a lot of investment in systems as well
These all come from the 80s, so by now we have modern, fully digital systems in all our financial institutions, so things like pix and open finance can be easily implemented.
I've been living in Brazil for the last 20 years.
Pix revolutionised the way we transact in Brazil. I've used Pix to pay for things that cost only cents, and I have a friend who bought her house using Pix. The system just works for any transfer amount. And it's so easy to use.
Its speed is truly baffling, and so is its reliability. Never have I failed to make a Pix payment because of downtime. I never cease to be amazed by how fast money arrives in my Brazilian account when I make a withdrawal directly from my EUR wallet on Wise. I receive a push notification from my Brazilian bank before Wise finishes running the animation of confirmation of withdrawal. It's like magic.
And it's so widespread that nowadays I don't even question whether someone accepts Pix. When I get in a taxi, no matter how old the driver is, it's certain that they take (and prefer) Pix.
I've even had homeless people ask me for Pix instead of change on multiple occasions.
Cryptocurrencies don't stand a chance.