Tech Roundup: The future of instant payments in Brazil

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: how the instant payments industry will fare in 2021. A new IoT law could boost hires in Brazil. And the Justice system’s efforts to go digital.

The future of instant payments in Brazil

One of the biggest innovations in 2020, the Brazilian Central Bank’s instant payments system PIX has proven to be a hit. During its first month of operation, 46.1 million individuals and another 3 million companies enrolled, and transactions reached a combined BRL 83.4 billion (USD 16.3 billion), accounting for one-third of all wire transfers in Brazil. Still, the new payment method is in its early days, and users and companies can expect further disruption. 

Telecoms team up for instant payments. PIX could become an even bigger part of Brazilians’ financial life after a deal between the Central Bank and telecom operators which would allow for cell phone credit charges to be made through PIX. This would accelerate an ongoing development, as the use of the tool by TIM’s customers to pay their bills rose by 30 percent.

Retail payments. The adoption of PIX as a payment method in brick-and-mortar shops has been considerably low, with 84 percent of transactions using the system coming on a peer-to-peer basis. A few reasons explain why vendors have yet to join the PIX frenzy: 

• Firstly, regulators have not been clear on fees for companies using the service. And there is a difficulty in confirming transactions have been successfully processed, as notifications go directly to company accounts, which few employees have access to.
• Another factor could be the time of year, as companies avoid making changes to their payments structure ahead of major retail dates such as Black Friday or Christmas.

Outlook. Central Bank Director João Manoel de Pinho Mello expects peer-to-business payments to grow, and the competition among the 750 financial players registered to operate PIX will guarantee lower prices.

Fraud. Though the Central Bank ensures the system is safe, scammers have been using PIX for phishing scams. For Carlos Macedo, founding partner at consulting firm Cortex and an expert...