Understanding Pix Payments and its Benefits

Pix, a real-time payment system developed by the Central Bank of Brazil, has been making waves in the financial world. Launched in 2020, Pix has rapidly gained popularity due to its speed, convenience, and accessibility. Business expert and Vice President of Primeo, Bank Mauricio Mendes Dutra says the aim of the government is to diversify the banking industry and promote competition.

That is why they came up with this brilliant instant payment platform that has become a game-changer in the banking industry. Pix allows transactions to be completed in seconds, using simple things like phone numbers, email addresses, or random codes (Pix keys).

It is now taking the centre stage, replacing more traditional payment methods like wire transfers (TED or DOC), credit cards, and even cash. Mauricio Mendes Dutra explains everything you need to understand about Pix payment including its benefits.

The Popularity of Pix Payments

It has quickly gained popularity, thanks to its speed, convenience, and low costs. As of 2023, there were over 160 million users in Brazil, covering a good part of the adult population. Pix processes billions of transactions annually. In 2022, it had surpassed 26 billion transactions.

This is a huge one considering it was only launched a year before. It can execute transactions in under 10 seconds at any time and anywhere. Infect, Pix has accounted for about 20% of all payments made in Brazil, this surpasses the credit card usage, ATMs and even cash “Businesses are also jumping on the bandwagon as many of them begin to embrace pix as a payment option.

It also goes without saying that financial institutions who are lagging behind might end up being kicked out of the game. Hence, it’s not surprising that around 99% of financial institutions including traditional banks, digital banks, fintech companies, and e-commerce platforms have adopted pix in a big way” Mauricio Mendes Dutra says.

Has Pix Extended Operation Outside Brazil?

No, they haven’t. Pix is primarily used in Brazilian innovation and banking systems but its success has attracted attention globally.

Key features of Pix include

• Instantaneous Payments: Transactions are processed in real-time, 24/7, 365 days a year.
• Accessibility: Pix is available to individuals and businesses of all sizes, whether big organisations or small-sized businesses..
• Convenience: Payments can be made using QR codes, phone numbers, or email addresses, which makes the process easy, peasy.
• Security: Pix makes use of advanced security measures which helps to protect user data and prevent fraud.
• Versatility: whether it is to pay bills, shop online, do peer-to-peer transactions, or purchase goods and services in physical stores, Pix has made life easier, helping to make a wide range of transactions without hassle..
• Security: It is backed by Brazil’s Central Bank, which has set strict security standards for banks and financial institutions offering Pix services.

How does Pix Payment Works

Mauricio Mendes Dutra says to start using Pix, individuals or businesses need to register a Pix key with their bank or financial institution. This key acts as a shortcut to your bank account and can be a phone number, email, CPF/CNPJ, or a randomly generated alphanumeric code.

Since it is an interoperable instant payments system it works with all digital wallets. Hence, users with digital wallets from different service providers can still transact in real time using Pix. If you for instance want to make a payment in a coffee shop that accepts Pix, you will need to select Pix as the payment option through their banking app or other financial service provider’s app.

To make the payment, Instead of inputting the recipient’s bank account number and details as expected of traditional transfers, you can simply input the recipient’s Pix key, like their phone number or email. After you confirm the transaction, the payment is processed instantly like within 10 seconds. The money is debited from your account and credited to the recipient’s account.

Pix payments can also be made using QR codes, which is popular for payments in stores or online. The merchant generates a QR code, and the customer scans it with their banking app to make an immediate payment. You and the store are notified in real-time once the transaction is completed. The confirmation includes details such as the amount, date, and time of the transfer.

Benefits of Pix Payments

Pix has a lot of advantages to offer to both individuals and businesses which include:

For Individuals:

• Speed: Transactions are processed instantly, eliminating waiting times.
• Convenience: Payments can be made using QR codes, phone numbers, or email addresses, simplifying the process.
• Accessibility: Pix is available to everyone with a bank account, making financial transactions more inclusive.
• Security: Advanced security measures protect user data and prevent fraud.
• Reduced Costs: Pix often offers lower transaction fees compared to traditional payment methods.

For Businesses:

• Increased Sales: The convenience and speed of Pix can encourage customers to make purchases.
• Improved Cash Flow: Faster payments can improve a business’s cash flow.
• Reduced Costs: Lower transaction fees can help businesses save money.
• Enhanced Customer Experience: Pix provides a seamless and convenient payment experience for customers.
• Access to New Markets: Pix can help businesses reach a wider customer base, including those who may not have access to traditional payment methods.

Overall, Pix has revolutionized the Brazilian payment landscape by offering a fast, secure, and convenient way to send and receive money.