Brazil is close to revolutionizing the way it uses its own money. The Central Bank launched last Wednesday, the 19th, the PIX system, in order to digitize the Brazilian currency, thereby reducing the costs of financial transactions between people, companies and even the government itself.
The country is being a pioneer in testing a universal instant payment system that not even large economies, such as China and the USA, have. PIX intends to connect fintechs, retailers, people, traditional and digital banks through a single system that will be able to transfer funds quickly and at a cost of cents per transaction.
The Central Bank will maintain a structure based on the ISO 20022 protocol, which will serve to catalog users and participating institutions, and also to record each transaction operated in the system. Everything will be fast, almost like direct communication. It is comparable to a P2P (Peer-to-peer) transaction, but not as Blockchain.
Cost per transaction
Unlike other payment methods, at PIX, the cost will be fixed. The total value of the purchase should not influence that of the transaction. It is not known exactly how many cents a transaction on the PIX will cost, but the Central Bank has already pointed out that the value will be very low. For the customer who makes a digital wallet compatible with the system, the cost will even end up being zero or diluted in the cost of some service provided by the contractor.
The deputy head of the Central Bank's Competition and Financial Market Structure Department, Carlos Brandt, said the market will be free to charge customers the fee they want in PIX transactions, but there will be control over abuse by the institution .
The Central Bank expects that with the creation of this new payment method, some current technologies will disappear, while others will only become less popular. In more isolated locations, for example, the main competitor will remain cash. And, although most Brazilians already have a smartphone, the biggest problem now is the signal from the cell phone, which is not always good in more distant places.
Starting in June, the Central Bank will force large banks to adopt the novelty. As a rule, any financial institution - bank or fintech - with more than 500 thousand active customer accounts will be required to participate in PIX under national regulations.
Initially, this mandatory criterion already includes around 30 institutions that are responsible for more than 90% of the transactional accounts offered in Brazil, thus ensuring that most Brazilians who already have bank accounts can benefit from the novelty.
The system will have strong security to avoid direct invasion in the management carried out by the Central Bank. However, security against fraud at the users' end will be made by the companies that will provide the digital wallet service. Therefore, the amount of fraud in the system will depend on the efforts of the participating companies.