Exploring the Transnational Payment Capabilities of Pix
In an exclusive report published today, our platform delves into the cross-border potential of Pix, an instant payments system owned and regulated by Brazil's Central Bank (BCB).
Pix, which has surpassed 160 million users since its launch in 2020, is making significant strides in the global arena. The BCB's Pix cross-border initiatives are being closely monitored by our platform, with potential to grow B2B payments in and out of Brazil.
An international Pix version enables Brazilian account holders to make payments in over 60 countries, enhancing cross-border usability and expanding global merchant acceptance. This cross-border integration exemplifies Pix's role in advancing currency sovereignty and reducing dependence on the U.S. dollar in international transactions.
Looking ahead, developments include the authorization of payment providers like Boku to offer Pix recurring payments by 2026, facilitating subscription billing and broadening access to Pix for international platforms and merchants operating in Brazil. Additionally, Pix's regulatory framework, enforced by the BCB, ensures security, compliance with anti-money laundering (AML) and know-your-customer (KYC) standards, and data privacy under Brazil’s LGPD. These regulations bolster confidence and reliability, supporting Pix's scalability and cross-border credibility.
The benefits of Pix's cross-border capabilities include instant, cost-free transactions for individuals, enhanced financial inclusion, and reduced costs for remittances and trade by avoiding dollar conversion fees. Pix also promotes de-dollarization, strengthening local currency usage and financial autonomy for Brazil and potentially other Latin American economies through linked initiatives like the Local Currency Payment System with Argentina and Uruguay.
However, it's important to note that Pix is not currently able to enable instant cross-border transfers through its infrastructure. Sending money to recipients in Brazil via Pix is possible from other countries but requires the assistance of specialised payment providers like Wise, Paysend, and Remitly. Various fintechs, such as PagBrasil, have filled the gap by enabling Pix payments to merchants based in other countries through their own infrastructure.
While other domestic projects are more immediately in the pipeline for the BCB, Pix cross-border could be highly beneficial for people sending and receiving remittances, given the 21% growth in inbound consumer remittances into Brazil in 2022. The BCB has expressed an interest in Nexus, a project spearheaded by the Bank for International Settlements to develop a platform for instant payment systems to connect globally, suggesting that Pix cross-border may not be far off.
In summary, Pix's cross-border potential lies in its expanding international acceptance, regulatory robustness, and strategic positioning as a tool to challenge the dollar's dominance in payments, offering faster, cheaper, and more inclusive financial services domestically and internationally. As the BCB continues to report on the progression of Pix cross-border initiatives, our platform will remain vigilant in providing updates and analysis on this exciting development.
[1] Source: Our platform report, published today [2] Source: BCB authorization of Boku [3] Source: BCB regulatory framework [4] Source: Pix cross-border integration statistics
The BCB's Pix cross-border initiatives, with potential to grow B2B payments, are being closely monitored by our platform and could offer significant opportunities in the finance and technology sectors. With regulatory compliance and data privacy under Brazil’s LGPD, Pix cross-border could facilitate faster, cheaper, and more inclusive financial services, connecting global merchants and enhancing cross-border usability.
The authorization of payment providers like Boku to offer Pix recurring payments by 2026, as mentioned in the BCB authorization of Boku, could further broaden access to Pix for international platforms and merchants operating in Brazil, potentially impacting the finance industry.
