An extremely popular payments platform (that you’ve likely never heard of) is under attack.
Driving the news: Last week, the U.S. launched a probe into digital trade practices by Brazil that allegedly discriminate against American companies. Pix, Brazil’s national digital payments platform, has been singled out, with Brazil now launching a campaign to defend it.
- The Brazilian government made a post on X last week using the slogan “PIX é Nosso, My Friend” or “Pix is Ours, My Friend.”
Catch-up: Brazil’s central bank launched Pix in 2020 to expand access to digital payments. Today, 76% of the country uses Pix, accounting for nearly 50% of all transactions, and it’s slated to pass credit cards as the main e-commerce payment method by the end of the year.
- Pix is hugely popular because of its near-instantaneous transaction speed, with payments settling in just three seconds, and low transaction fees — just 0.22% of a transaction on average, compared with over 1% for debit and 2% for credit cards.
Why it matters: Even as it comes under attack from the U.S., Pix has shown the benefits of developing a free public system that isn’t beholden to payment giants like Visa. As more nations look for economic independence from the U.S., it could provide a good blueprint.
Yes, but: Some critics feel that Pix creates a conflict of interest by having the central bank competing in the market and regulating competition — a concern amplified by the bank’s budgetary struggles.—QH