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Tag: #DigitalEconomy

  • PIX: The Revolution That Threatens Card Companies’ Profits and Promotes Financial Freedom

    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

  • Who Created PIX and How It Revolutionized Payments in Brazil

    The Creation of PIX

    PIX was created by the Central Bank of Brazil to modernize and simplify the country’s payment system. Development began in 2018, and the system was officially launched in November 2020. The initiative aimed to offer a fast, secure solution available 24/7, unlike traditional methods like TED, DOC, and cards.

    Who Was the Creator

    Although PIX is an initiative of the Central Bank, its development involved various internal technical teams and specialized fintech consultants. The then president of the Central Bank, Roberto Campos Neto, was one of the main supporters and drivers of the project, aiming to transform Brazil’s financial system and encourage digital innovation.

    How PIX Works

    PIX allows instant transfers and payments at any time of day, processing transactions in seconds. It is accessible through banking apps using PIX keys — such as CPF (tax ID), email, phone number, or a random key — to identify accounts, simplifying daily financial operations.

    Revolution in Payment Methods

    Before PIX, Brazilians depended on methods like TED and DOC, which only works during business hours and often charges fees. PIX removed these barriers by enabling instant, free transfers for individuals, increasing financial inclusion. Additionally, PIX introduced innovations such as installment payments, contactless payments, and integration with billing systems.

    Social and Economic Impact

    PIX significantly changed consumer and merchant behavior, facilitating e-commerce, bill payments, and even donations. The system’s speed and convenience encouraged the formalization of small businesses and expanded access to financial services for population segments previously excluded from the traditional banking system.

    References