Pix Payment System’s Dominance in Brazilian E-Commerce by 2028
Brazil’s revolutionary instant-payment platform, Pix, is poised to command a remarkable 50% of the nation’s e-commerce transactions by 2028, outpacing credit cards significantly, as indicated by a recent study from payments firm Ebanx.
This projection underscores the swift ascendancy of a system developed and managed by Brazil’s central bank, which has dramatically curtailed cash transactions in the region’s largest economy.
Since its inception in late 2020, Pix has already eclipsed the combined volume of credit and debit card transactions in 2023, solidifying its status in the market.
By monetary value, Pix ranks as the second most prevalent payment method among Brazilians, following only traditional interbank transfers that are typically utilized for substantial transactions.
Last year, the system attracted scrutiny from the U.S., where a probe into alleged unfair trade practices raised questions regarding the dual role of the central bank as both the operator of Pix and the regulator of the financial system.
The Brazilian financial authority maintains that it serves as a neutral architect of public digital infrastructure, fostering a more efficient, inclusive, and competitive marketplace. This assertion is bolstered by the entrance of over 70 million individuals into the financial ecosystem since Pix’s launch.
As Pix expands, it has put considerable pressure on the share of card transactions, traditionally dominated by American giants Mastercard and Visa.
Historically a bastion for credit cards, Brazil’s e-commerce landscape witnessed Pix represent 42% of online purchases in the previous year, marginally surpassing credit cards, which accounted for 41%, according to Ebanx.
Data sourced from Payments and Commerce Market Intelligence (PCMI) suggests that Pix’s online participation will soar to 45% by the end of this year, and further ascend to 50% by 2028, with its lead over credit cards projected to widen to 14 percentage points.
Eduardo de Abreu, Ebanx’s chief product officer, noted that the central bank’s introduction of a recurring-payments feature last year significantly contributed to Pix’s growth trajectory after it initially gained traction in person-to-person transactions.
Central bank metrics reveal that payments from consumers to businesses have constituted Pix’s largest volume category since September. As of January, these accounted for 46% of total Pix transactions, in contrast to 40% for person-to-person transfers.
Abreu attributes Pix’s success to increasing trust among consumers and its growing prevalence on e-commerce platforms.
Nonetheless, he cautions that credit cards will likely maintain a steadfast following due to the deeply entrenched practice of interest-free installments, particularly for higher-value purchases, even when merchants incentivize immediate payment through discounts via Pix.
“While discounts are appealing and beneficial mathematically, consumers often consider their monthly cash flow, leading them to think: even with the discount, I can’t afford to pay in full this month,” he explained. “Installment plans effectively cater to those who genuinely require cash-flow flexibility.”
Source link: M.economictimes.com.
