Explaining Pix for Gringos: A Comprehensive Guide to Brazil’s Instant Payment Method

Have you heard about Pix but have no idea how it works? Look no further. We’ve wrapped up a comprehensive guide about Brazil’s instant payment method that’s influencing the digital payment industry worldwide. 

Could you imagine that Brazil would be at the forefront of one of the most advanced technologies in digital payments worldwide? Well, neither could I. 

Pix has been breaking records since its launch. According to the CX Trends 2022 report, carried out in January by the companies Octadesk and Opinion Box, Pix already represents 13% of consumer preference in online purchases, behind only the credit card (62%).  According to the Central Bank of Brazil, nearly 1.8 billion transactions were made in July, adding up to more than BRL 811 million.

What is Pix?

Pix is an instant payment method developed by the Central Bank of Brazil. Wire transfers can be completed within a few seconds between accounts at any day or time, including weekends and holidays. 

Pix can be carried out from a checking account, savings account, or prepaid payment account, and it’s available for both natural and legal persons. 

The Fintech & Regtech Global Awards 2021 awarded this payment technology as one of the most ground-breaking payment solutions of the year.

Read more: Pix: 10 Questions and Answers About Brazil’s Instant Payment Method

 

Pix Features

  • Fast: Transactions are completed in a few seconds, and resources are available to the payee in real-time.
  • Available: 24/7, including holidays.
  • User-friendly: Easy to use – all it takes is a smartphone, internet connection, a bank account, and a Pix key.
  • Affordable: Free for a natural person and very cost-effective for a legal person. 
  • Safe: Robust mechanisms and measures to ensure the security of transactions.
  • Versatile: Multipurpose tool, which can be used for payments regardless of transaction type and value, between individuals, companies, and government.

The instant payment method has many benefits for the payer and receiver. And as we’ve already mentioned, it’s quick and easy to use. 

Making a Pix transfer takes just a few seconds. The payer can use the receiver’s Pix key, manually insert the QR code or point their phone camera to a preexisting QR code with an amount already embedded. Users don’t need to resort to a POS machine, check, credit, or debit card; they only need their smartphones. 

Read more: The Future of the Payment Industry in Brazil is Digital

Pix also facilitates automation and payment reconciliation for receivers – reducing friction and promoting fluid checkout. 

 

The Difference Between Pix and Other Payment Methods

Pix was created to be a comprehensive payment method. Any payment or transfer that today is made using different means (TED, card, bank slip, etc.) can be made with Pix, simply using a mobile phone.

Traditional wire transfers in Brazil are between accounts of the same institution (simple transfer) or between accounts of different institutions (TED and DOC). It can take more than 24 hours to arrive at the receiver’s account, and it only works during business hours.  

The difference is that with Pix, you don’t need to know which bank the other person has an account with. You carry out the transfer from, for example, a phone number in your contact list using the Pix key. Pix works 24/7 between banks, from bank to fintech, from fintech to payment institutions, among others. 

Read more: Brazil Among the Main Digital-first Consumers in the World

As a real-time payment method, both the payer and receiver will get a notification within seconds after the transfer is completed. 

 

Pix for What?

  • Transfers between people
  • Payment in commercial establishments, including physical stores and ecommerce
  • Payment of service providers such as supplier payments
  • Payment of charges
  • Payment of utility bills such as electricity, internet, and water supply

 

Pix and Ecommerce

The benefits are many. The consumer without a credit card who wants to purchase online finds it hard to find ecommerce shops that accept debit cards. In addition, buying with boleto bancário involves additional steps such as printing the invoice and waiting a few days for payment confirmation. 

Read more: How Pix Has Influenced the Digital Payment Realm in Brazil

From the merchant’s side, there are benefits too. Firstly, they can save money by offering Pix as a payment method –  there’s no transaction fee for the natural person and just a small amount for businesses – and the money is instantly available to them. Secondly, there is little to no risk of chargeback, as such a payment method is less likely to succumb to fraud or an error, thus decreasing the chances of chargeback.

 

What’s Next for Pix?

With such tremendous success, Pix is expanding. The payment method that is shaping how Brazilians make their payments will have more functionalities to come, according to the Central Bank of Brazil.

Automatic Recurring Payments with Pix

Recurring payments are one of the biggest payment trends in 2022. The Central Bank of Brazil will allow automatic recurring payments with Pix for companies operating on a subscription-based model.

Read more: Pix 2022: What to Expect from Brazil’s Newest Payment Method

Automatic Charges

Similar to credit cards, Pix will allow merchants to make future charges. This functionality will let users collect extra fees, fines, discounts, and interest fees.

Pix Credit

Like installment payments offered by credit card operators, the modality Pix Crédito – also called Pix Garantido (in English, Pix Credit) – will qualify users to choose whether they wish to pay in installments or opt for a one-off payment.

Pix Will Be Accepted in International Ecommerce Transactions

The Central Bank of Brazil has also announced that an international ecommerce website will be able to receive payments with Pix. This option is an excellent opportunity for merchants selling in Brazil who wish to boost their sales.

PagBrasil Pix: Instant Payment for Online Businesses in Brazil

PagBrasil Pix can be easily integrated into online stores via API. In addition, PagBrasil Pix is also available in Shopify, VTEX, and WooCommerce integrations.

Want to offer the best payment experience for your consumers in Brazil with Pix? Watch the video above to learn more about PagBrasil Pix and get in touch today!

 

Camila Santiago

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