What is PIX?
PIX is an instant payment system created by the Central Bank of Brazil, launched in November 2020. It allows real-time transfers and payments, 24/7, free of charge for individuals.
Threat to Card Corporations
The business model of major credit card companies, like Visa and Mastercard, relies on charging fees ranging from 1% to 2.5% per transaction. PIX, on the other hand, offers significantly lower fees — about 0.33% for businesses — and is often free for consumers. This difference means substantial savings for merchants and consumers, making PIX an attractive and challenging alternative for traditional card operators.
How Card Companies’ Dominance Affects People’s Wallets
The near-monopoly of card companies causes merchants to pass high fees onto consumers, who end up paying more for goods and services. Additionally, banks and card issuers often charge high interest rates on credit use, directly impacting family budgets and personal finances. PIX breaks this cycle by offering a payment method with little or no fees, helping to lower the final cost for consumers.
Financial Freedom for Countries
Beyond cost reduction, PIX promotes financial inclusion by allowing unbanked individuals to participate in the digital economy. It facilitates access to essential financial services like bill payments, transfers, and online purchases without relying on traditional financial intermediaries. This strengthens countries’ financial sovereignty, reducing dependence on foreign financial systems and promoting a more self-sustaining economy.
Reactions from Card Corporations
The growing popularity of PIX has generated significant reactions among credit card companies. In July 2025, then-US President Donald Trump criticized the system, claiming it harms American companies. This stance reflects concerns over market share loss and decreasing revenues from transaction fees.
The Future of PIX
PIX continues to evolve, introducing new features like installment payments, allowing consumers to split purchases into multiple payments directly through the system. This innovation further expands PIX’s reach, making it a powerful tool in transforming the global payment system.
References
- Central Bank of Brazil. “Pix: Instant Payment System.” Available at: https://www.bcb.gov.br/en/financialstability/pix_en
- Reuters. “Brazil’s Pix payments are killing cash. Are credit cards next?” Available at: https://www.reuters.com/business/finance/brazils-pix-payments-are-killing-cash-are-credit-cards-next-2024-04-02/
- Financial Times. “Brazil rallies to defend much-loved payment system from Donald Trump’s attack.” Available at: https://www.ft.com/content/e17e6de1-d863-46f8-bfab-fa8cbfc495f0
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