With the advancement of Brazil’s instant payment system, many questions arise regarding the future of payments in the country. One of these questions is whether or not the system, named Pix, will eventually replace debit cards, as well as other payment methods such as TEDs, DOCs, and the boleto bancário.
We have narrowed down the impact of Pix on each specific payment method in Brazil. Check it out!
The impact of Pix on each payment method in Brazil
Debit cards are one of the payment methods that will be most affected by the inclusion of Pix, as they require users to be banked. Pix transactions, however, will not necessarily require a bank account, as users will be able to use their eWallets to send and receive money. With the high number of smartphone users in Brazil and large unbanked populations, Pix becomes a more attractive payment method in this sense than debit cards.
TEDs and DOCs
Since Pix will enable immediate money transfer, TED (Available Electronic Transfer) and DOC (Credit Order Document) payments will likely be replaced longer term. TED transfers allow same-day compensation but are limited to business days from 6:20 am to 5 pm. DOC transfers, on the other hand, are compensated only on the next business day. Pix will allow users to send and receive money 24 hours a day, 7 days a week.
The boleto bancário is the second most used payment method in Brazil, and many are wondering if this traditional payment method will be replaced by Pix. However, this will depend on how fast consumers shift from cash to digital payments. Today, 71% of Brazilians prefer using cash for their daily purchases, and many receive their salaries and extra income in cash. Since the boleto bancário enables cash payments, Pix will not be replacing the boleto bancário any time soon.
Credit cards are the number one payment method for online purchases in Brazil, and they offer a number of benefits to consumers. One of the biggest advantages is installment payments, which allows Brazilian customers to divide their purchases into monthly payments. Therefore, it is unlikely that credit card adoption will decrease with Pix.
What you need to know about Pix
The instant payment system is under development by the Central Bank of Brazil. All financial institutions with over 500,000 accounts must adopt the system before November 16th, when the system will effectively be launched.
Participation is voluntary for entities that have not yet reached this number. The initiation process will occur via QR codes, address keys, manually filled-in information, and proximity payments. Learn more in this article!