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Brazil's Pix payment system faces pressure from Visa and Mastercard

elciudadano.com

321–330 of 397 posts

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#321

Earlier quoted context omitted.

There is a wide misconception that state stuff needs to be fully state-developed. I don't subscribe to that view. Delegating and designing just-enough simple solutions, avoiding bureaucratic tanglements, is an immense challenge and done beautifully in this case. The other direction (not using standards, owning parts you don't need) would make it for slower adoption, lots of new government responsibilities and very fe…

Yes, but my point was more nuanced, I didn't mean to say that the state needs a fully owned solution. The original article opens up with "Pix is igniting a geopolitical and commercial battle." The point I was trying to make, specially in the last paragraph, was that: Brazil doesn't really have full control, or the capability, to operate Pix without US infrastructure. Therefore, it is not smart, to engage in a geopoli…

Brazil has not started in any ideological battle regarding this. It has developed a national technology, and it allows other payment systems to coexist peacefully in the spirit of honest competition.

The ideological and geopolitical provocations comes from the US. The government is merely defending itself, and being decisive about our sovereignty is not an act of aggression. It's just good statesmanship.

The phrase "PIX is ours" wasn't even directed at the US. It was promoted because a previous Brazilian president tried to attach is personal name to the technology. It was later adopted in that defensive posture, but it was never about fostering any grievances with other payment systems.

Data centers are a commodity, and the US gets tremendous revenue from Brazilian businesses that use it (fourth largest AWS customer location). It's a symbiotic relationship, and there are other countries able to provide computing power if we need to cut ties with it. If that happens, businesses can rent those from somewhere else.

You underestimate our ability to handle these things. Watch us.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#322

I can see that Visa and Mastercard are freaking out, not because Pix can take over their business model, but because it can give ideas to other countries doing the same. I've spent three months earlier this year in Brazil and never used Pix once. Not because I didn't want, but because I couldn't, or let's be honest: my time was not worth the hassle. To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID…

Lots of other Asian countries already did something similar, e.g. Singapore had PayNow QR Codes (probably the closest to Pix) since 2017, Thai PromptPay was even earlier and India UPI (slightly different wallet system) since 2016. China was even earlier but different though private superapps.

What has changed, and I find interesting, is that Card rails are more and more used for political pressure [1], and I feel the "American hemisphere" is probably the reason Pix gets more of this pressure than Asian countries.

1) https://www.icc-cpi.int/news/icc-strongly-rejects-new-us-san...

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#323
post #318

Earlier quoted context omitted.

> We need instant, free SEPA transfers around the clock. We have? SCT inst has been rolled out almost everywhere > Switzerland is not part of SEPA We definitely are. Transfers in EUR from/to CH IBANs use SEPA rails. CHF accounts can also send or receive EUR transparently (usually at a bad FX rate, but it just works). > I don't understand what they solve. [...] > I always say that the day Trump decides to block Visa/M…

> We have? SCT inst has been rolled out almost everywhere That is true; I should have said "EEA" or "countries supporting IBAN". > We definitely are. Transfers in EUR from/to CH IBANs use SEPA rails. CHF accounts can also send or receive EUR transparently (usually at a bad FX rate, but it just works). Yes, which is exactly my point. We need it to work for CHF as well. Instant payments are not the norm and in fact UBS…

This is a false dichotomy. You can have very cheap transaction fees, Pix is state-run and probably operates at a loss, with merchant fees as low as 0.2~0.3%. In comparison the cheapest card payment under the EEA interchange cap is probably slightly above 0.5% when you add scheme fees and PSP costs.

However businesses do require payment systems and not just barebones bank transfers. Except for high trust, low volume transactions such as buying a car, paying your rent...

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#324
post #284

I've been living abroad for over a decade now, so I never got to experience Pix. I went back to Brazil a few years ago for a couple of weeks, and a kid on the streets asked me if I could buy some chewing gum and help him out. I wanted to, but I had no cash, so I told him I had no cash at all. He said "It's fine, just send me some with Pix". I still remember the incredulous look on his face when I told him I also didn…

> "_Everyone_ has it. How come you don't?" To put it in context: everyone with a Brazilian bank account can use Pix. That's the reason "everyone" has it.

That's underselling it. Even people without a bank account have Pix.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#325

I can see that Visa and Mastercard are freaking out, not because Pix can take over their business model, but because it can give ideas to other countries doing the same. I've spent three months earlier this year in Brazil and never used Pix once. Not because I didn't want, but because I couldn't, or let's be honest: my time was not worth the hassle. To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID…

> Pix is a good local idea, but the world needs something better. There is no problem to continue using maybe Visa/Mastercard when dealing abroad or external, but when you are a normal citizen, it's far better to use Pix in this case, you are supporting a national company, paying fee's to them and not at the whims of an external countries policies. Edit: They also tend to be non profits ironically enough. In Ireland…

Europe already has plenty of alternative card systems e.g. France's Cartes Bancaires (CB) and ironically Germany just last year turned it's Girocard/Maestro system off in favour of Visa/Mastercard; the problem is the banks in individual countries in Europe are not willing to give up their control in favour of a compatible standard.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#326
post #175
post #164

Earlier quoted context omitted.

What's needed in Europe is federation of the existing systems, not one winner taking it all.

That's exactly what's happening, see the EU digital euro scheme. It's planned to be free of fees too, modeled around how SEPA was done for wires. There has been massive resistance by the incumbents of course, including banks (since they too charge a fee on top of visa). It's been in the backlog for years but the US sanction against ICC judges leading to them being cut off from most things including payment triggered…

The European Payments Initiative (Wero) made the mistake of only aiming for Peer-to-Peer QR code payments, carefully avoiding competing with cards so each country could keep their card schemes (Cartes Bancaires, Girocard etc). I don't think it will ever even _compete_ with cards in the near future.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#327

Earlier quoted context omitted.

Another advantage is anti-fraud measures and remedy (chargebacks). This (BTW clearly AI-generated) article mentions some fraud thing they're working on (Special Refund Mechanism), so we'll see how long it takes for that to take effect. For now, I'll be using our Canadian not-quite-Pix called Interac to pay small amounts of money to people I trust, but I won't any time soon be buying a fridge with it, or booking a wee…

Canadian here who's not familiar with Pix; is Interac a pretty close comparable? If so, it's not the end-all answer for exchanging money for goods & services, but great in a small subset of transactions.

It's not run by a central bank and not mandated, but it "organically" became standard for banks and many vendors to support it. I hope they find a good way to combat fraud and the fee differential will make it more frequent for vendors to offer a discount for cash/Interac (or an extra charge for credit cards). It used to be common, then got banned, and is now allowed but uncommon. I for one don't really want to use an American credit card, but the fact that I get 1.5% cash back and fraud protection is a fairly strong incentive.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#328

Earlier quoted context omitted.

Twint is in Switzerland for more than 10 years, hardly a new idea

Swish is even older. The issues with Twint: - Switzerland hasn't gotten Apple to open up NFC payments at the same conditions as the EEE, at least not yet. - Twint is part of the EMPSA which hasn't really delivered anything tangible. On the contrary there's now a real push from EPI and EuroPA to make Wero interoperable with non-Eurozone networks. Hopefully Twint will get on board too. - Transaction fees are on the hig…

> Twint is part of the EMPSA which hasn't really delivered anything tangible.

It's easy to see why. Both Swish and Vipps is part of EMPSA. In Sweden, everyone uses Swish. Vipps (from Norway I believe) wants to expand to Sweden but no one is using it since it's not compatible with Swish. So making it compatible would potentially hurt the business of Swish.

Regulation is needed. Otherwise it will never happen.

Re: Brazil's Pix payment system faces pressure from Visa and Mastercard

#329

People underestimate how difficult it was to transfer money before Pix, even between local banks. The process was hard to use, it could take days and the fees were huge, depending on your bank. Pix solved all these problems. What happens also is that many sellers provide discounts when using Pix, because you dodge the expensive fees charged not only by Visa and MasterCard, but the fees operators (banks, fintechs) cha…

> People underestimate how difficult it was to transfer money before Pix, even between local banks. The difficulties were the same as everywhere. I worked in Bank in Brazil and in Germany. A lot of the difficulties we still face in Germany today.

What difficulties do you mean? We got Sepa instant transfers nowadays...
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