Robson Ferreira begs among the cars at a crossroads in São Paulo. He doesn’t hold out his hand, but shows a sign that says “I need help” followed by the word “PIX” and a series of numbers.
PIX, which you activate with your mobile phone, is the most popular transaction, payment and transfer method in Brazil today. Since last year, it has surpassed the number of credit card transactions.
“I use PIX because many people want to help, but few have any money with them. And it works better, ”explains the 48-year-old unemployed.
This instant transfer electronic transaction method was launched in November 2020 by the Central Bank of Brazil (BCB), the first public body in Latin America to successfully install an alternative method to bank cards.
With the October presidential election approaching, Jair Bolsonaro claimed paternity, although the PIX project began under the rule of his predecessor Michel Temer (2016-2018).
PIX is also subject to misinformation. It is said that if poll favorite Luiz Inacio Lula da Silva, aka Lula, wins, he will discard PIX to satisfy banks that don’t charge peer-to-peer fees.
Any account holder has access to the system on their mobile phone via their bank’s application. To pay or transfer money, just enter the recipient’s social security number or phone number, or even enter a QR code, like at the supermarket checkout.
As of July, there were about 478 million PIX (“key”) accounts, mostly held by individuals – who may have more than one – among the roughly 184 million Brazilians with a bank account, according to the BCB.
In the first quarter of this year, 4.2 billion PIX transactions (22.9% of the total) were recorded, compared to 3.7 and 3.5 billion respectively for credit card (19.27%) and immediate debit ( 19.8%).
For merchants, this payment method offers many benefits.
“The rates charged for other electronic means (…) are very high, not to mention the collection period”, which can be up to 28 days for credit cards, stresses the BCB.
José Jefferson, a coconut water vendor on a beach in Rio de Janeiro, also finds PIX “much safer”. “With cash, you run the risk of losing it or being stolen,” he says.
The instantaneousness of the transaction also pushed PIX as the second most used payment method in e-commerce, according to consulting firm Gmattos.
If PIX is used for relatively small amounts, about 2 trillion reais (517 B $ CAD) were traded in the first quarter, the BCB specifies.
According to Leandro Vilain, Director General for Innovation, Products and Banking Services at the Brazilian Federation of Banks (Febraban), “PIX has mostly replaced cash transactions.”
The speed of its deployment has been favored, according to analysts, since
free bank accounts in Brazil (all banks must provide people with a free checking account), the government assistance program that 20.2 million poor families receive on their bank account and, finally, the large number of mobile phone owners ( more than one per person).
But the other side of the coin, mobile bank account access and PIX transfers are sources of crime.
Anna Novaes, a 52-year-old architect, was kidnapped in São Paulo last May for eight hours and forced under gunfire to grant loans to two banks that were transferred via PIX to her kidnappers’ accounts.
Adding online purchases, the damage was 40,000 reais (about 10,357 Canadian dollars), Ms. Novaes told AFP, which could be compensated by her bank.
154,972 frauds were reported in July, more than double compared to January. However, this represents only 0.0075% of total transactions, the BCB reassures.
Despite the trauma, Ms. Novaes is “using PIX as before”. Because “I don’t want to deprive myself of this structure” in transactions, she explains.