Brazil's Pix ‘much cheaper' than card payments, paper by central bank economists shows

Banco Santander Brasil SA

23/03/2022 14:30

By Marcela Ayres
    BRASILIA, March 23 (Reuters) - Brazil's Pix retail instant
payment system is "much cheaper" than card payments for
merchants, according to a paper published Wednesday by the
umbrella body of the world's central banks, highlighting its
growth potential for businesses after its vertiginous rise among
individuals.
    The paper, which was co-authored by economists at the
Brazilian central bank for the Bank of International Settlements
(BIS), says Pix costs an average of 0.22% of a transaction's
value for merchants, whereas debit cards cost slightly above 1%
and credit cards reach 2.2% in Brazil.
    It is also more competitive than credit card fees of 1.7% in
the United States, 1.5% in Canada and 0.3% in the European
Union, the paper added, saying it does not necessarily represent
the views of the BIS or the central bank. 
    Launched in November 2020, Pix is ​​free of charge for
individuals, but policymakers allow banks and payment
institutions to freely define costs for merchants, both for
transfers and receiving funds.
    The BIS paper said person-to-person payments are still
dominant in Brazil but have reduced their share to about 75% of
total Pix transactions as of February, with person-to-business
(P2B) payments quickly gaining ground.
    "A further increase in P2B usage is expected over time, as
new overlay services such as direct debit and electronic bill
payment are scheduled to be released in the near future," it
noted.      
    Merchants' growing use of Pix can hurt payments processing
companies, such as Cielo  CIEL3.SA , controlled by Banco do
Brasil  BBAS3.SA  and Bradesco  BBDC4.SA , and Itaú-owned Rede
 ITUB4.SA , since their revenue is linked to card usage in their
machines. 
    That group also includes companies such as PagSeguro
 PAGS.N , Stone  STNE.O  and GetNet  GET11.SA , the merchant
payment business of Santander Brasil  SANB11.SA .
    About 9.1 million companies have signed up to Pix,
accounting for 60% of firms with a relationship with banks or
payments organisations, said the paper. 
    Just 15 months after its launch, Pix has been used by 114
million individuals in Brazil - 67% of the adult population -
moving 6.7 trillion reais ($1.36 trillion) and reaching the
level of credit and debit cards.
    ($1 = 4.9103 reais)

 (Reporting by Marcela Ayres
Editing by Mark Potter)
 ((marcela.ayres@thomsonreuters.com; +55 11 5047-2444;))