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Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneo

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks. Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US. Actions like that may show the current direction of the US government is aligned on preserving status quo. But still, I wonder how impactful a public digital infrastructure for the dollar would be.

kyrra 1y ago
My understanding is that Pix took over because the Brazilian gov did transfer payments during covid and the (only?) way to get those payments was via Pix. So it forced everyone to start using it. And once people had more familiarity with Pix, merchants started pushing for it because it charges ACH level fees. The chargeback system (MED) is only so-so right now, but expected to get better. There is a lot to like about Pix, but the spec is extremely complicated and hard to implement.
- ufo 1y ago
  Pix blew other kinds of bank transfer out of the water. TED, DOC, Boleto, were slow and expensive. Pix is instant, free for most people, and just works.
- forinti 1y ago
  I started using Pix, because it's the best way to do business with Chinese ecommerce sites. You don't have to give your credit card details and refunds go straight back to your account. In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.
  - anodari 1y ago
    If you use an intermediary, implementation is usually very simple and straightforward. The biggest challenge is becoming a direct participant—that is, communicating directly with the central bank. In this case, you need to enter the regulatory framework and become a payment institution.
  - Anarch157a 1y ago
    There are plenty of companies in Brazil that offer PIX payments to foreign e-shops. Valve has been accepting PIX for some time now, for example.
    - plumeria 1y ago
      Can you suggest some?
      - Anarch157a 1y ago
        Many banks and Fintechs here offer this, the trick is that you need to open a local office, so you have a Brazilian subsidiary with a CNPJ number in order to open a bank account and receive the money.
- dkga 1y ago
  No, the Central Bank of Brazil did not force any person to start using Pix. Also, care to elaborate why you think the spec is complicated and hard to implement?
  - kyrra 1y ago
    Coerce is likely a better word. Pix and OpenFinance are extremely chatty APIs with a ton of rules. Being a merchant using the ecosystem is not that bad, but trying to be a participant in the network is complicated.
forinti 1y ago
It's totally unfair that they don't get a cut from other people's business. /s
thimabi 1y ago
I got in this thread with the expectation of seeing a comment like yours, so thank you for that. I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia. Consumers like it because it is widely available and free, companies like it doubly so, and even governments like it because it helps to combat tax evasion and fraud. Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.
- kwanbix 1y ago
  In Argentina we have Mercado Pago which is basically this.
  - mzitelli 1y ago
    It is not the same. Mercado Pago is a product from Mercado Livre and charges at least 0.8% per transaction.
    - kwanbix 1y ago
      If you transfer between accounts is free.
    - paulsen 1y ago
      Transfers from a bank to another and between banks and/or digital wallets (like MercadoPago) are free and almost 99% of time instant in Argentina The transfer system is like that due to government regulation
- mzitelli 1y ago
  > Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share. I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.
dkga 1y ago
By the way, for those that want more context on Pix a good place to start is this BIS Bulletin: https://www.bis.org/publ/bisbull52.pdf https://www.bis.org/publ/bisbull52.pdf
man4 1y ago
[dead]
hopelite 1y ago
It is total corruption through Visa/MC of our political system in a way that people really do not understand. That is who and what would be affected. You can’t even get anyone to propose a bill to create a digital payment processing capacity just like how the government issues currency. It has been the hijacking and takeover of the most fundamental task of the government, issuing currency.
jimbob45 1y ago
Can anyone please steel man the opposition argument for Pix?
- toomuchtodo 1y ago
  You can’t create a moat to skim 3% of the economy as a for profit venture.
  - deleted 1y ago
    [deleted]
  - matheusmoreira 1y ago
    The brazilian government can choose to start taxing every single pix transaction at any time. Due to the electronic and centralized nature of the system, such taxes would be utterly inescapable. The only thing stopping them is the sheer unpopularity of such an action. It's already being used for data cross referencing, tax collection and investigation purposes. There are plans to implement into these payment systems pretty much everything that cryptocurrency maximalists warned us about. It's a convenient system but at the same time quite dystopian.
    - whatevaa 1y ago
      Nothing stops US government from doing the same to Visa/MasterCard networks.
      - mtrovo 1y ago
        Not really coming from the US gov but it already happens in very weird ways: https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-porns-star-chamber https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-p...
    - aledue 1y ago
      This argument works against all payment systems that are conceivably bannable (likely all of them). If a payment system doesn't collaborate, the government can ban it. > The only thing stopping them is the sheer unpopularity of such an action. This is the intended functioning of democracies I guess.
Art9681 1y ago
Does the Central Bank of Brazil publish data on the cost of running the network and how it is funded? Or is there a hidden tax that eventually makes its way to the customer in order to keep it going? Nothing is totally free. Who pays for the infrastructure costs, not to mention the legion of humans that it surely takes to maintain the network? Pretty sure that no matter what is published publicly, someone is paying for it, and that cost is being passed around the logistics chain and ends up on the prices of the products you buy. Sure, it may be much cheaper, but it's not totally free.
- Anarch157a 1y ago
  Pix is free for natural persons and individual entrepreneurs. For businesses, receiving is free, but they pay a fee to send money[0], this can vary from one institution to another. [0] https://www.contabilizei.com.br/contabilizei-responde/taxa-pix-pessoa-juridica/ https://www.contabilizei.com.br/contabilizei-responde/taxa-p...
- leonidasv 1y ago
  It costs up to ~$9m per year, processing 63 billion transactions per year: https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gasta-ate-r-50-milhoes-ao-ano-para-manter-sistema-do-pix-diz-campos-neto.ghtml https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gast... Banks pay a small fee (less than a cent) per batch of transactions.
- arccy 1y ago
  If the central bank offers it, it would be the equivalent to cash. Cash is also expensive to maintain and issue. Do you ask all the same questions as who pays for cash?
qskousen 1y ago
FedNow is still a thing, at least for now.
- matthewdgreen 1y ago
  How do I use FedNow to buy things from merchants?
danielscrubs 1y ago
People don’t really believe me when I say I went to the U.S. and had to sing the national anthem every day in class. There’s no other place that protects its companies so fiercely, meritocracy be damned. Great for investors though!
matheusmoreira 1y ago
American corporations have never been shy about using the might of the US government to protect their own interests. USTR's "notorious market reports" is a nice example. "Our stakeholders" want this, "our stakeholders" are concerned about that. It's a huge list sovereign nations get onto when american corporations don't like them. They put Canada on that list at some point. I fully expected Trump to attempt to leverage the Bolsonaro trial into economic advantage but it was pretty surprising to see him take issue with pix of all things.
john01dav 1y ago
I'd like to see a system like that that also integrates taxes. That is, it tracks total income for each payee each year and deducts taxes based on the appropriate tax bracket. It should also support sales tax and state income tax. That way, all that you need to do is appropriately mark the transactions and tax compliance is done. You could even mark business expenses in it and have deductions automatically processed. Someone could lie about the nature of their transactions, but that's called tax fraud and it's already possible and we already have mechanisms to deal with that.
godelski 1y ago
I'm not a big fan of crypto but I've always wondered why the US wouldn't want to create a highly secure private coin that's pegged to the dollar. I mean you put a very small transaction fee on it (can be far less than Visa's 2%) and you're suddenly generating revenue from tons of global transactions, benefiting from the status of the dollar being the global currency. You even get to "tax" illegal transactions, and as a consumption "tax". It would only work if it was highly private (effectively like cash) as no one else wants to be handing all that data over but it still sounds like it would be a big win to many parties (well not the authoritarians? Maybe?). Everyone will be "banked", you get digital payments everywhere, and you even probably reinforce the reliance on the US dollar. Is the demand for control so much greater than the demand for money combined with providing a public good? I know there's still challenges to resolve but a guy can dream, right?
- arccy 1y ago
  So like Circle's USDC Circle Payments Network?
  - godelski 1y ago
    Is Circle private? Their whitepaper is very lacking in that department...
- XorNot 1y ago
  Because nobody needs a cryptocurrency when you have a centralized trusted broker.
  - godelski 1y ago
    Another commenter pointed out that the correct term for what I'm suggesting is a CBDC, which, yes, uses a centralized trusted broker. Which I personally don't care if it is a centralized ledger or a distributed ledger, as long as it is actually private (a-la zcash ZKP or something similar)
- pjc50 1y ago
  > Is the demand for control so much greater than the demand for money combined with providing a public good? Yes. Also the current administration is hostile to public goods as a concept. The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.
belter 1y ago
> I wonder how impactful a public digital infrastructure for the dollar would be. The future digital dollar is being quietly sabotaged as the current administration realizes that crypto isn't just capable of anonymous bribery, it's the ideal medium for it.
rprend 1y ago
it's important to note that Pix took over Brazil because it was mandatory. The US Federal Reserve built equivalent infra: FedNow, as of 2023, is the rails for instant settling, $.04 bank transfers. But adoption is meh

kyrra 1y ago

My understanding is that Pix took over because the Brazilian gov did transfer payments during covid and the (only?) way to get those payments was via Pix. So it forced everyone to start using it. And once people had more familiarity with Pix, merchants started pushing for it because it charges ACH level fees. The chargeback system (MED) is only so-so right now, but expected to get better. There is a lot to like about Pix, but the spec is extremely complicated and hard to implement.

ufo 1y ago
Pix blew other kinds of bank transfer out of the water. TED, DOC, Boleto, were slow and expensive. Pix is instant, free for most people, and just works.
forinti 1y ago
I started using Pix, because it's the best way to do business with Chinese ecommerce sites. You don't have to give your credit card details and refunds go straight back to your account. In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.
- anodari 1y ago
  If you use an intermediary, implementation is usually very simple and straightforward. The biggest challenge is becoming a direct participant—that is, communicating directly with the central bank. In this case, you need to enter the regulatory framework and become a payment institution.
- Anarch157a 1y ago
  There are plenty of companies in Brazil that offer PIX payments to foreign e-shops. Valve has been accepting PIX for some time now, for example.
  - plumeria 1y ago
    Can you suggest some?
    - Anarch157a 1y ago
      Many banks and Fintechs here offer this, the trick is that you need to open a local office, so you have a Brazilian subsidiary with a CNPJ number in order to open a bank account and receive the money.
dkga 1y ago
No, the Central Bank of Brazil did not force any person to start using Pix. Also, care to elaborate why you think the spec is complicated and hard to implement?
- kyrra 1y ago
  Coerce is likely a better word. Pix and OpenFinance are extremely chatty APIs with a ton of rules. Being a merchant using the ecosystem is not that bad, but trying to be a participant in the network is complicated.

forinti 1y ago

It's totally unfair that they don't get a cut from other people's business. /s

thimabi 1y ago

I got in this thread with the expectation of seeing a comment like yours, so thank you for that. I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia. Consumers like it because it is widely available and free, companies like it doubly so, and even governments like it because it helps to combat tax evasion and fraud. Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

kwanbix 1y ago
In Argentina we have Mercado Pago which is basically this.
- mzitelli 1y ago
  It is not the same. Mercado Pago is a product from Mercado Livre and charges at least 0.8% per transaction.
  - kwanbix 1y ago
    If you transfer between accounts is free.
  - paulsen 1y ago
    Transfers from a bank to another and between banks and/or digital wallets (like MercadoPago) are free and almost 99% of time instant in Argentina The transfer system is like that due to government regulation
mzitelli 1y ago
> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share. I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.

dkga 1y ago

By the way, for those that want more context on Pix a good place to start is this BIS Bulletin: https://www.bis.org/publ/bisbull52.pdf https://www.bis.org/publ/bisbull52.pdf

man4 1y ago

[dead]

hopelite 1y ago

It is total corruption through Visa/MC of our political system in a way that people really do not understand. That is who and what would be affected. You can’t even get anyone to propose a bill to create a digital payment processing capacity just like how the government issues currency. It has been the hijacking and takeover of the most fundamental task of the government, issuing currency.

jimbob45 1y ago

Can anyone please steel man the opposition argument for Pix?

toomuchtodo 1y ago
You can’t create a moat to skim 3% of the economy as a for profit venture.
- deleted 1y ago
  [deleted]
- matheusmoreira 1y ago
  The brazilian government can choose to start taxing every single pix transaction at any time. Due to the electronic and centralized nature of the system, such taxes would be utterly inescapable. The only thing stopping them is the sheer unpopularity of such an action. It's already being used for data cross referencing, tax collection and investigation purposes. There are plans to implement into these payment systems pretty much everything that cryptocurrency maximalists warned us about. It's a convenient system but at the same time quite dystopian.
  - whatevaa 1y ago
    Nothing stops US government from doing the same to Visa/MasterCard networks.
    - mtrovo 1y ago
      Not really coming from the US gov but it already happens in very weird ways: https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-porns-star-chamber https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-p...
  - aledue 1y ago
    This argument works against all payment systems that are conceivably bannable (likely all of them). If a payment system doesn't collaborate, the government can ban it. > The only thing stopping them is the sheer unpopularity of such an action. This is the intended functioning of democracies I guess.

Art9681 1y ago

Does the Central Bank of Brazil publish data on the cost of running the network and how it is funded? Or is there a hidden tax that eventually makes its way to the customer in order to keep it going? Nothing is totally free. Who pays for the infrastructure costs, not to mention the legion of humans that it surely takes to maintain the network? Pretty sure that no matter what is published publicly, someone is paying for it, and that cost is being passed around the logistics chain and ends up on the prices of the products you buy. Sure, it may be much cheaper, but it's not totally free.

Anarch157a 1y ago
Pix is free for natural persons and individual entrepreneurs. For businesses, receiving is free, but they pay a fee to send money[0], this can vary from one institution to another. [0] https://www.contabilizei.com.br/contabilizei-responde/taxa-pix-pessoa-juridica/ https://www.contabilizei.com.br/contabilizei-responde/taxa-p...
leonidasv 1y ago
It costs up to ~$9m per year, processing 63 billion transactions per year: https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gasta-ate-r-50-milhoes-ao-ano-para-manter-sistema-do-pix-diz-campos-neto.ghtml https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gast... Banks pay a small fee (less than a cent) per batch of transactions.
arccy 1y ago
If the central bank offers it, it would be the equivalent to cash. Cash is also expensive to maintain and issue. Do you ask all the same questions as who pays for cash?

qskousen 1y ago

FedNow is still a thing, at least for now.

matthewdgreen 1y ago
How do I use FedNow to buy things from merchants?

danielscrubs 1y ago

People don’t really believe me when I say I went to the U.S. and had to sing the national anthem every day in class. There’s no other place that protects its companies so fiercely, meritocracy be damned. Great for investors though!

matheusmoreira 1y ago

American corporations have never been shy about using the might of the US government to protect their own interests. USTR's "notorious market reports" is a nice example. "Our stakeholders" want this, "our stakeholders" are concerned about that. It's a huge list sovereign nations get onto when american corporations don't like them. They put Canada on that list at some point. I fully expected Trump to attempt to leverage the Bolsonaro trial into economic advantage but it was pretty surprising to see him take issue with pix of all things.

john01dav 1y ago

I'd like to see a system like that that also integrates taxes. That is, it tracks total income for each payee each year and deducts taxes based on the appropriate tax bracket. It should also support sales tax and state income tax. That way, all that you need to do is appropriately mark the transactions and tax compliance is done. You could even mark business expenses in it and have deductions automatically processed. Someone could lie about the nature of their transactions, but that's called tax fraud and it's already possible and we already have mechanisms to deal with that.

godelski 1y ago

I'm not a big fan of crypto but I've always wondered why the US wouldn't want to create a highly secure private coin that's pegged to the dollar. I mean you put a very small transaction fee on it (can be far less than Visa's 2%) and you're suddenly generating revenue from tons of global transactions, benefiting from the status of the dollar being the global currency. You even get to "tax" illegal transactions, and as a consumption "tax". It would only work if it was highly private (effectively like cash) as no one else wants to be handing all that data over but it still sounds like it would be a big win to many parties (well not the authoritarians? Maybe?). Everyone will be "banked", you get digital payments everywhere, and you even probably reinforce the reliance on the US dollar. Is the demand for control so much greater than the demand for money combined with providing a public good? I know there's still challenges to resolve but a guy can dream, right?

arccy 1y ago
So like Circle's USDC Circle Payments Network?
- godelski 1y ago
  Is Circle private? Their whitepaper is very lacking in that department...
XorNot 1y ago
Because nobody needs a cryptocurrency when you have a centralized trusted broker.
- godelski 1y ago
  Another commenter pointed out that the correct term for what I'm suggesting is a CBDC, which, yes, uses a centralized trusted broker. Which I personally don't care if it is a centralized ledger or a distributed ledger, as long as it is actually private (a-la zcash ZKP or something similar)
pjc50 1y ago
> Is the demand for control so much greater than the demand for money combined with providing a public good? Yes. Also the current administration is hostile to public goods as a concept. The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.

belter 1y ago

> I wonder how impactful a public digital infrastructure for the dollar would be. The future digital dollar is being quietly sabotaged as the current administration realizes that crypto isn't just capable of anonymous bribery, it's the ideal medium for it.

rprend 1y ago

it's important to note that Pix took over Brazil because it was mandatory. The US Federal Reserve built equivalent infra: FedNow, as of 2023, is the rails for instant settling, $.04 bank transfers. But adoption is meh