What are Pix Payments?

Brazil's central bank created the instant payment platform to diversify the country’s banking industry and foster healthy competition. Pix payments became ubiquitous in Brazil by October 2021, just a year after the system launched. In just over two years, Pix has been used by 122 million customers (just over half of the population).

With Pix payments, users can execute transactions in under 10 seconds (2.5 seconds, on average), even on weekends and holidays. The goal of the Pix payments system is to reduce cash transactions while providing alternative payment options to boletos, ATMs, and bank slips. Pix also enables faster payments that are more convenient, affordable, and secure than traditional payment methods.

Pix is unique because it doesn’t require acquirers, card schemes, or issuers. As an interoperable instant payments system, it works with all digital wallets. That means two people using digital wallets from different service providers can still transact in real time using Pix.

Pix uses a database called the Transaction Accounts Identifier Directory (DICT) to link Pix keys with each user's transactional account information. Pix relies on the Instant Payment System (SPI), which is the centralized infrastructure to settle instant payments between various payment service providers in Brazil.

How do Pix Payments work?

Pix makes it easy for consumers to send payments. Users simply select Pix on the checkout page, then scan, copy, and paste a Pix code into their digital wallets or use a smartphone to scan a QR code. Once a recipient’s information is confirmed, the user can complete the transaction.

To receive payments with Pix, users can generate a QR code or provide the payee with their address key. If a user (recipient) generates a static QR code, the recipient doesn’t need to include the transaction amount, but the payee must manually include the payment amount. With dynamic QR codes, the recipient must include the amount to be paid.

Pix is cheaper for businesses to use and widely available to users who do not need a bank account to initiate Pix payments. Users just need a digital wallet or similar service from a participating institution.

Since Pix payments are real-time payments, they can’t be canceled, but payees can request a refund from recipients. Transaction amounts can be changed, and transactions can be canceled if the payment has not yet been confirmed. The Central Bank developed a Special Return Mechanism to be used in special cases where fraud may have occurred.

What are the Benefits of Pix Payments?

Pix allows online merchants to collect funds in real time without the need for intermediaries. Instant payments also foster improved business relationships with suppliers, vendors, and contractors who also get paid instantly. Faster payments mean better cash flow, which improves operations for business owners.

Consumers can enjoy Pix at no cost to send and receive payments in real time. This has bolstered financial inclusion and access. The system’s full availability means transfers can occur at any time, regardless of whether banks are open.