Pix: Simply the best
The meteoric rise of Pix in Brasil demands our attention. Period.
In this deep dive newsletter we explore the meteoric rise of Brasil’s new payment system with a guest blog from Jeremy Light’s Agenda:Payments newsletter - huge thanks to Jeremy for allowing Payments:Unpacked to feature “Simply the best” as a guest blog.
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Simply the best
More than a decade ago, a senior executive at a big bank in Brazil told me that encouraging financial inclusion was proving impossible. His bank had a large number (30m+) of low-income customers mandated to have a bank account to receive government benefits. As soon as the benefits arrived in their accounts, almost all account holders went to an ATM to withdraw their cash and then queued in a branch for any residual amount the ATM was unable to dispense. No amount of innovation, including on mobiles could change consumer behaviour and their preference for cash.
Fast forward to today and all has changed
The Central Bank of Brazil (BCB) launched Pix in November 2020, resulting in probably the fastest adoption of a payment system anywhere in the world. It has 157m individuals registered to use it, or about 93% of the adult population and 15.4m companies1. In 2024, four years after launch, it processed 56bn real-time payments, or 266 payments per capita2.
Two weeks ago, I wrote3 about the rapid rise and extraordinary success of UPI payments in India – however, Pix’s growth has been even more rapid and outpaces UPI by far.
For comparison, in its fourth full year after launch (2016), UPI processed 19bn payments, or 13 payments per capita. Last year, eight years after launch, UPI processed 172bn payments4 , three times the absolute volume of Pix in the same year, but at 119 payments per capita, less than half that of Pix. Figure 1 shows the difference.
Figure 1 – comparison of UPI and Pix payment volumes per capita
Evidently, to achieve such strong and rapid product-market fit, the BCB must have done their homework on what works well in the world’s real time payment systems before designing Pix (see footnote 10 for the full story).
How Pix Works
Pix is a real-time payments scheme, operating on the central real-time clearing and settlement system, SPI that operates 24/7. All banks and payments institutions in Brazil with more than 500,000 accounts must offer and receive Pix payments.
Each participant has their own online or mobile banking or payment app which is used to make Pix payments, following a standardised user interface and user experience defined by the BCB.
A core component of the Pix system is the Transaction Accounts Identifier Directory (DICT) which holds an encrypted identifier, or alias for anyone or any business that wishes to receive Pix payments.
Individuals and businesses can choose their own identifiers to share with Pix users to get paid. Up to five aliases (keys) per account are permitted (that must be unique to an account but are portable to other accounts) or 20 aliases for accounts of legal entities. Aliases used can be an e-mail address (15% of a total 828m aliases as of January 2025), a mobile phone number (18% ), a Taxpayer Identification Number (19%), or a randomly generated alphanumeric string for privacy (48%).
When paying a recipient, the payer either keys in an alias for the recipient (42% of all initiations); captures an alias through a dynamic QR code (38%) or static QR code (8%); or manually keys in payee account details (12%). QR codes are used extensively at point-of-sale, on invoices and online for ecommerce.
The alias is decoded against the DICT and the recipient’s name is displayed to the payer to check it is correct before paying. This helps prevent misdirected payments and fraud. Typically, users can report any fraudulent aliases they encounter directly to the BCB through their payment apps. Payers are authenticated in their app by their bank or payment provider, who then authorises the payment.
Pix Participants
There are 903 Pix institutions connected to SPI through a private communications network, including the government and 884 transaction account providers, with 186 direct participants and 703 indirect participants. Most of the participants are credit cooperative banks which operate mainly in rural areas, 582 in total, with 73 banks of varying sizes and 175 payment institutions, the remainder being an assortment of other FIs (see footnote 2).
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