For over a century, Kodak dominated the world of film photography, with analog films and cameras. At its peak, in 1975, it created a digital camera but didn’t immediately bring the innovation to market, fearing it would harm sales of traditional devices. In the 80s, it was surprised by the digital advance, led by companies like Canon, Sony, and Fuji. In 2012, Kodak filed for bankruptcy.
I draw a parallel between this story and the Brazilian payment market, where credit card companies play the role of Kodak, while witnessing the rise of the innovative Pix technology.
Does it seem like an exaggeration? Read on .
Pix was born digital, unlike credi t cards. And this affects the speed at which improvements happen, in an increasingly dynamic market. I see Pix as more than just a payment method. Its infrastructure allows the market to create intelligent functionalities tailored to current consumer needs, bringing more and more innovation.
There’s also a cost issue. For merchants, processing payments with Pix costs up to 14x less than with cards, not to mention the money’s liquidity, much higher with Pix.
In terms of economic impact, the money transacted by Pix stays here, while international card companies take a share of the value.
Furthermore, Pix plays a very important role in financial inclusion. Since its launch in October 2020, it has integrated 71 million Brazilians into the financial system, according to the Central Bank.
Given this scenario, I see that it will be difficult for cards to progress, as all motivations for their use can be met by Pix developments :
– Contactless payment (the latest card innovation) will be made possible by Pix Non-Redirection;
– Recurring payments can be made with Automatic Pix;
– The option to buy on credit or in installments will be possible with Guaranteed Pix;
– Benefit programs, once exclusive to cards, are being created by the merchants themselves. It’s common for retailers to offer discounts for Pix payments or create their own points programs.
This year, I participated in some payment technology and innovation events, most recently Money 2020 in Las Vegas.
I’m thrilled to see that Brazil is leading a movement that, over the years, should even take over developed countries . We created Pix, an innovative, inclusive payment method that is cheaper for consumers and merchants, important for the economy, and has a long agenda of evolutions.
Credit card companies, like Kodak, are doomed to disappear, due to lack of innovation and fear of harming their profits.
And you, what’s your perception about the permanence of cards in the country?
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