Jason Simon explains the advance of PIX in Brazil’s financial landscape

In a country with a large portion of the population unbanked, the PIX allows the benefits of financial inclusion, especially access to eCommerce, to be enjoyed more actively. Jason Simon, an expert in the financial sector, explains how Brazil’s financial landscape is affected by the advancement of PIX.

The instant payment system was created by the Central Bank of Brazil and launched in November 2020. It achieved such popularity among Brazilians that it has already surpassed the volume of other types of transfers made monthly and reached a penetration higher than that of credit cards. CB data show that 110 million people, more than half of the Brazilian population, have already made a PIX.

But, in addition to the usability offered by PIX, many wonder what the wide adherence to the method represents when analyzing financial and digital inclusion in a country that still has a large contingent of unbanked people. A recent study by Simon shows that the popularization of PIX is associated with the growth of eCommerce in Brazil, and, at the same time, PIX has brought about a revolution in the online shopping experience.

Simon’s projections indicate that the method should double its volume in eCommerce every year, growing 95% annually until 2024. At that time, it should represent almost 10% of the total volume of online purchases in Brazil.

Before PIX achieved this relevance in eCommerce, another digital inclusion movement was paving the way. The high penetration of smartphones in the Brazilian population (and also in the Latin American population in general, as more Latin Americans now own a cell phone than a bank account) made the cell phone an important eCommerce vector, accounting for 60% of eCommerce purchase volume in 2021 in Latin America.

“The basis of PIX’s success is precisely this: being mobile, created for the mobile payment experience, with the use of a QR Code scannable by the camera and the possibility of using the mobile number as a key for transactions,” explains Simon. “According to CB data, 98% of PIX transactions since its launch were made via mobile, representing more than 70% of the volume transacted through this payment method.”

PIX reveals pent-up demand. The huge number of Brazilians who started shopping via cell phone using PIX as a payment method represented the entry of a few million new shoppers into eCommerce. Beyond Borders analyzed more than one million PIX transactions conducted in the last quarter of 2021 through the EBANX platform and found that 62% of consumers using PIX were first-time online shoppers.

Nearly 40% of the volume paid through PIX was from new customers in the quarter. This represents a 20% increase for companies that offer PIX as a payment option through EBANX. “PIX brings more people together. Simon comments that PIX allows entrepreneurs and people who don’t have credit cards to receive payments.

World Bank data also suggests that PIX offers companies the opportunity to reach a new audience of consumers who were previously not able to shop online. PIX penetration is significantly higher than credit cards at 51% versus 25%.

Other data also shows the inclusiveness of PIX. According to CB, 35% of Brazilians who registered in CadUnico (which registers families living in poverty or extreme poverty across the country) had a PIX code four months before its launch. And 25% had received a transaction through this method within that time.

According to Simon, the success case of PIX in Brazil has not only served Brazil, but it has been a reference for other Latin American countries to also develop their instant payment methods, as well. This is the beginning of a transition that will continue for the next several years.

This points to a scenario in which real-time payments will be the protagonists of an ecosystem of digital solutions along with digital wallets, Buy Now Pay Later solutions and cross-border payments, among other products. These will revolutionize the consumer experience in Latin America in the next decade. “PIX is seen around the world as a success story in terms of user participation, financial inclusion, and boosting eCommerce,” said Simon.