Brazil’s central bank on Monday launched an instantaneous payments platform which will speed up and simplify trades, as well as cultivate financial sector competition and lure in new players such as tech titans Facebook and Google.
Dubbed “Pix,” the instant payments method allows consumers and companies to make money transfers 24 hours a day, seven days per week, without requiring debit or charge cards. It is also free of charge for individuals.
Society demands something that is fast, cheap, safe, transparent and open,” central bank president Roberto Campos Neto stated in a digital press conference to mark the launching.
The move from Brazil’s central bank intends to increase competition in a highly concentrated banking system, with its top-five creditors, including Itau Unibanco Holding SA and Banco Santander Brasil SA , holding approximately 80% of total deposits and assets.
Since the central bank sets low rates for money transfers and payments via Pix, the regulator believes competition will increase. Itau’s card chip, Rede, said on Monday that it will not charge merchants using Pix for the initial six months.
By 2030, Pix is very likely to account for 22 percent of payments in Brazil, consultancy company Oliver Wyman stated in a recent study. Last year, debit and card payments in Brazil totaled 1.8 trillion reais (approximately $382 billion).
Pix will induce banks to lose some fees as individuals use it.
The stage went live at 0930 local time Monday, and may be used to get anything from ice cream to an auto, Campos Neto said.
According to the central bank, 72 million registrations have been opened for the support, by 30 million individuals and 1.8 million businesses.
“WhatsApp will start doing P2P soon. I have talked a lot with their CEO, we are making good progress.
“Our only concern is that we must go through all the approval criteria and that we have a system that fosters competition,” Campos Neto said.
Some 750 companies have signed up to Pix to accept and offer instant payments. Uber Technologies Inc stated it began to accept Pix payments, expecting to include unbanked customers.
In the future, Pix will add new functionalities, including cash-back and pre-programmed payments, which are currently available mainly through bank cards.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Jamie McGeever, Marcela Ayres and Carolina Mandl.
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