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Brazil's government-run payments system has become dominant

economist.com

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Re: Brazil's government-run payments system has become dominant

#151

Post by aspenmayer »

Etheryte wrote: post #42
Asraelite wrote: post #35

Earlier quoted context omitted.

> crypto is all proprietary What?

I think a steelmanned version of their comment is that crypto apps are proprietary, which I think is mostly true. There are open source apps, but most of the big ones are all proprietary.

I interpreted it as: crypto is proprietary in that it is bespoke. Crypto prior to ethereum didn't even have a concept of compatibility. Forks of existing crypto could be considered proprietary with respect to each other and with respect to the original project being forked. The need for bridging to other chains/coins as well as the need for on/off-ramps also speaks to the somewhat-proprietary nature of modern cryptocurrencies.

All that said, however, crypto isn't proprietary compared to traditional banking or other payment transfer tech in the ways that make crypto, well, crypto - the lack of third party intermediaries. Anyone can develop for crypto, and the capabilities of the network can be extended by properties of crypto tokens.

Any individual crypto token or network may be open source or proprietary with respect to its development and acceptance of outside contributions, but the ecosystem as a whole is amazingly interconnected and interoperable. This seems incongruous conceptually when crypto is framed in terms of being proprietary, because crypto is constantly reinventing itself in plain view, through entirely new networks and tokens, and out of sight, through the efforts of working groups and individuals to support and maintain existing projects.

I think it's entirely fair to call crypto proprietary, and also fair to find it not to be, but there's a world of difference between how proprietary bitcoin or even ethereum is compared to something like xrp. Who controls the network and who controls development are the key differentiating features among these axes to my mind.

Crypto could potentially be the best or worst of both open and proprietary worlds, but in the best case, crypto can be open in ways that are good, and only proprietary in ways that are necessary and sufficient.

Re: Brazil's government-run payments system has become dominant

#152

Post by carlos_rpn »

DanielHB wrote: post #55

Sweden has had a similar system for several years before PIX in Brazil. It is also integrated with the digital ID system (BankID). The main difference is that the Swedish system is ran through a private organization managed by all the major banks (and the central bank) in conjunction. So the central bank doesn't have direct access to the transaction data technically. While the Brazilian system is only interacted dire…

My suggestion would be to create an account for her with Nubank or Mercadopago, which are easier to use, faster to login than any banking apps, and have PIX more readily available after login, and then keep some money on the new account just for the kind of purchases she'd use pix for. I do that for myself just for ease of use.

Re: Brazil's government-run payments system has become dominant

#153

Post by rglullis »

SwiftyBug wrote: post #8

I've been living in Brazil for the last 20 years. Pix revolutionised the way we transact in Brazil. I've used Pix to pay for things that cost only cents, and I have a friend who bought her house using Pix. The system just works for any transfer amount. And it's so easy to use. Its speed is truly baffling, and so is its reliability. Never have I failed to make a Pix payment because of downtime. I never cease to be ama…

> I've been living in Brazil for the last 20 years.

If you have moved about 15 years before that, you'd have experienced the hyperinflation years and you've come to understand why Brazilian (retail) banking systems were always pushing the state of the art.

(You'd also understand that cryptocurrencies are not meant to compete with payment networks that have institutional backing, but that's a lesson for another day)

Re: Brazil's government-run payments system has become dominant

#154

Post by xinayder »

oulipo wrote: post #13
SwiftyBug wrote: post #8

I've been living in Brazil for the last 20 years. Pix revolutionised the way we transact in Brazil. I've used Pix to pay for things that cost only cents, and I have a friend who bought her house using Pix. The system just works for any transfer amount. And it's so easy to use. Its speed is truly baffling, and so is its reliability. Never have I failed to make a Pix payment because of downtime. I never cease to be ama…

Interestig, but this is also worrying to know that the government now knows exactly what you bought, where, when, and for how much. They can also (if there's a rogue government) create fake transactions to implicate you in things you haven't done

In a sense it didn't change much. It's not like the government can access your transaction data all the time. They still need to go to court and request a warrant for that, to break your bank secrecy.

It's not different from what we had before.

EDIT: it didn't actually change a thing. Banks are still required to maintain transaction data private, and agencies, including the government, MUST obtain a warrant to break transaction data secrecy.

Re: Brazil's government-run payments system has become dominant

#155

Post by afarah1 »

ave_b_2011 wrote: post #138
afarah1 wrote: post #101

Earlier quoted context omitted.

WhatsApp Pay is available today in Brazil. The official reason for blocking the launch was missing paperwork, but word on the street at the time was that it was to favor Pix. This is all mentioned in the Retuers article. The reasons for favoring Pix are left for one to speculate. You say national security, the other says financial surveillance and control over the population. Time will tell.

Financial surveillance would happen either way. It’s either from your government or to a foreign company, bundled and sold en mass.

In this case, maybe. But it's not the only option. The old payment system was a bit more private, as payments went through commercial banks and one needed a court order to access transaction history. According to The Economists' article the instant payment system in other countries adopts a similar scheme, which is more private than Brazil's, and which could have been adopted here too. Also, there exists technology today enabling private micro-transactions, such as Monero. But governments - including Brazil's - prevent exchanges to offer it. Europe is no different.[1] One may argue this prevents abuse, which may be true, but it also prevents financial privacy.

[1] https://support.kraken.com/hc/en-us/articles/support-for-mon...

Re: Brazil's government-run payments system has become dominant

#156

Post by djoldman »

There's a lot to discuss here. Focusing on one thing however:

> But unlike India, where UPI is run by an industry body, Pix is managed entirely by the BCB.... the BCB alone runs Pix’s infrastructure and controls the encrypted database that stores all transactions.... This concentration of power in a central bank is unusual, and has led to criticism. “Now we live in a democracy, but imagine if this existed under an autocracy and all your information was available to the government,” says the head of one prominent fintech company. He thinks citizens in richer countries would balk at the government having Pix’s level of access to all financial transactions. Also, if the system is ever hacked or breaks down, the fallout would be greater than if a single bank were attacked.

(Just looking at the privacy aspect) For something like Pix to have a chance at long term success in the US, there'd have to be unambiguous regulation absolutely prohibiting access by the government to transaction information that could be tied to a person. Preferably, it would be technically impossible to tie a transaction to a person/entity without going to the bank that facilitated the transaction and a warrant signed by a judge.

10 years down the road:

IRS: "if we could look at that, it'd be great..."

Police/FBI/NSA: "think of the children..."

etc.

Re: Brazil's government-run payments system has become dominant

#157

Post by Gud »

dtquad wrote: post #77
bestouff wrote: post #5

> Pix has spiced up Brazil’s fusty banking sector, but it gives the central bank a worrying amount of power I think a largely prefer a government-run payment system than an US company monopoly.

There are alternatives to both inefficient government-run monopolies and US tech giant monopolies. Even a small country like Denmark has multiple software and finance companies doing apps and software in the digital payments and banking field.

Why do you assume a government-run monopoly is inefficient?

You should try to take a train in Switzerland sometime. Its government run and I guarantee you will be mind blown over its efficiency.

Re: Brazil's government-run payments system has become dominant

#158

Post by afarah1 »

jowea wrote: post #28
afarah1 wrote: post #15

WhatsApp is omnipresent for communication in Brazil, and WhatsApp Pay was ready before Pix, but the government blocked the launch to launch Pix first.[1] I rarely see this mentioned. [1] https://www.reuters.com/article/technology/brazil-suspends-w...

Well I'm thanking the government for saving us from yet another Facebook monopoly thorough first mover advantage and network effects.

It's an interesting topic for study. Being the first to launch wasn't the only factor, but certainly an important one - WhatsApp Pay is available today, but it's nowhere near as popular as Pix. That's why I mentioned it. With that being said, I don't think people need "saving" from choosing to use a service. It's not certain that WhatsApp Pay would really take off as much as Pix did. I also don't think one should be thankful for having one monopoly replaced by another (in the sense of market dominance, you can still use alternative payment methods). Imagine instead of WhatsApp Pay it was WhatsApp itself. Meta is no saint, but at least messages are E2E encrypted. How would GovApp look like? As mentioned in the article, Pix has every transaction go directly through the central bank, as opposed to going through commercial banks like traditional payment methods. It may provide great usability, but also concentrates power and risk, as written in The Economist. So far there is no indication this power has been used in any malicious way, or that any significant breach occurred, but the infrastructure for that is there, and governments change. That should at least be in one's mind, if one values some kind of personal financial freedom.

Re: Brazil's government-run payments system has become dominant

#159

Post by thisissomething »

marcodiego wrote: post #14

I'm a Brazilian. Everything here can be paid through pix. It's very convenient, fast reliable and, for a country like ours where walking on the streets with money is a risk, safe. There's only one reason I don't use it: there's no FLOSS app (AFAIK) to use it. Something as common as the dominant payment system should not depend on proprietary software.

> there's no FLOSS app (AFAIK) to use it.

Does this mean that you also don't use your bank Android/iPhone APP? So your entire financial life is handled via a browser?

Re: Brazil's government-run payments system has become dominant

#160

Post by panick21_ »

DeathArrow wrote: post #135
TrackerFF wrote: post #89

Earlier quoted context omitted.

I don't think it is a realistic option in the US, at least in the current climate. There are so many powerful and influential anti/small-government that are rabidly opposing anything made by the government, and offered to the people. The argument is always the same: - "It will stifle innovation" - "It is unfair to business" - "It will make people dependent on the government" - "It will give government more access to…

>For decades the American people have been told that anything the government touches will be expensive, inefficient, and lead to a more taxes. Private sector knows best, and all that. Do you have some counter arguments?

Do you mean US examples or world wide examples?

Because I think the whole government are inefficient and suck is partly a self fulfilling prophecy.

Swiss railways or how Taiwan created the semiconductor industry from scratch comes to mind. Estonia E-Government. Or like the Panama canal?

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