About Pix...

Pix is Brazil's highly advanced Fast Payment System (FPS) that has revolutionized the country's financial landscape. It allows for instant, 24/7, low-cost (often free) transactions, enabling payments "anywhere, to anyone, for anything, at any time, and in an instant." What truly sets Pix apart and designates it as a "new gold standard" is its ubiquity and generativity. Ubiquity means Pix is an all-encompassing network that connects every payment account in the Brazilian financial system without requiring specific sign-ups, making it universally accessible. Generativity means Pix was designed as an extensible platform, not a single product. This allows the Brazilian Central Bank (BACEN) and other participants to innovate and create new products and experiences without needing to alter the core Pix infrastructure, ensuring its future-proof adaptability and efficiency in reducing transaction costs across the economy.

Pix has had a profound and rapid impact on Brazil's economy and financial inclusion since its launch in November 2020. It quickly surpassed all other payment methods in transaction volume and most in financial volume. Within six months, half the banked population adopted it, and its financial volume exceeded 50% of Brazil's GDP within eight months. Today, over 95% of the adult population and 84% of businesses use Pix, moving more than twice the country's quarterly GDP every quarter.

Its impact on financial inclusion is particularly notable. From 2013 to 2025, 72 million Brazilians became customers of financial institutions, with Pix significantly accelerating this after its launch. The system has enabled more people to build a digital financial footprint, facilitating access to other financial services like credit. For small businesses, 97% accept Pix, and 48% prefer it for receiving payments, accounting for over half of their pay-ins. Pix has fostered competition in the financial market by eliminating the size advantage for new entrants, allowing any Payment Service Provider (PSP) to reach all 190 million Pix users. It has also supported the digitalization of public services, such as tax payments and social benefit disbursements.

Several key strategic decisions by BACEN were crucial to Pix's exceptional success:

• Effective Governance: BACEN took a leading role in building the infrastructure, defining rules, and acting as the guardian of public interest. They engaged industry stakeholders through "Requests for Inputs" (RFIs) via the Pix Forum but maintained decisive authority to avoid "design by committee" issues (lengthy processes, inconsistent choices, and complex code).

• Clear Principles: From the outset, Pix was guided by principles of openness, cost-effectiveness, ease of use, safety, and integration with existing payment methods. This provided a common language for debate and ensured alignment in design decisions.

• Technological Architecture: Pix was built using powerful abstractions, a 1-to-n information and settlement system, alias based on event logs, distributed systems engineering best practices, and open standards. This versatile and evolvable design reduced development, implementation, and operational costs.

• Policy Mandates: Mandatory participation for large PSPs ensured widespread adoption from day one (covering over 90% of accounts). It was designed to be free for basic use by individuals, significantly lowering activation and adoption costs. BACEN also established usability standards and trust-enabling mandates for PSPs, and fostered competition by encouraging alias registration.

• Centralized Alias Database (DICT): BACEN built and runs the DICT database, storing payment aliases (Tax ID, phone number, email, and random virtual payment addresses) for routing information and anti-fraud purposes. This provides a trusted source for payee verification.

Pix's architecture and payment flow are designed to ensure high levels of reliability, transparency, and foster competition. Its core is the Instant Payments System (SPI), built and operated by BACEN, which handles both money and data flows. Transactions are gross-settled in real-time, are final, and irrevocable, typically completing in under 10 seconds.

• Reliability: Pix employs distributed systems best practices like unique end-to-end IDs for idempotency (preventing duplicate transactions), a single source of truth (SPI) for transaction status, strict timeouts for each step (canceling transactions if limits are exceeded), and eventual consistency. All operations are signed with digital certificates for undeniability. SPI boasts high availability (99.9% often reaching 99.99%).

• Transparency: Because SPI is the single source of truth for transaction status, both payer and payee receive real-time notifications about the payment's success or failure. Payer PSPs are mandated to retrieve and display payee information from the DICT database at the confirmation screen, ensuring the payer knows exactly who they are paying.

• Competition: The "one integration to connect to the whole country" model means any regulated PSP, regardless of size, can connect to Pix and reach all 190 million users. This commoditizes the basic fund transfer capability, shifting competition to experience and added-value services, thus reducing market concentration and fostering innovation from smaller players.

Pix offers various payment initiation methods, primarily focused on payer-initiated payments, which put the payer in control and enhance security:

• Manual Insertion: This allows users to manually input all transaction details (value, time, payee account, Tax ID). While basic, it was crucial for early adoption as it mirrored traditional bank transfers, bridging the "technology adoption chasm" by requiring no change in user behavior initially.

• Payment Alias (Pix Key): Users can link their account to a phone number, email, Tax ID, or a randomly generated Universal Unique Identifier (UUID). The payer only needs to provide this alias, and the payer's PSP automatically retrieves all routing information from BACEN's DICT (a trusted source), which is then displayed for confirmation. This significantly improves usability and security by eliminating manual input errors and verifying payee identity.

• QR Codes (Static, Dynamic, Compound):Static QR Codes: Encode a payment alias and optional value/message. The payer's PSP pulls payee details from DICT.

• Dynamic QR Codes: Encode a unique URL that the payer's PSP accesses to retrieve all payment information directly from the payee's PSP servers. This allows for arbitrary metadata (e.g., shopping lists, due dates) to be shared, making them highly versatile for various use cases and enabling innovation without changing core infrastructure. The use of verified domains and SSL certificates enhances security.

• Compound QR Codes: Used for recurring payments (Pix Automatic Payments). These methods, especially those leveraging payment aliases and QR codes, prioritize user experience by simplifying payments and ensure security by sourcing payee information from trusted, verified channels.

Pix also supports third-party-initiated payments through overlays like Open Finance APIs and Pix Automatic Payments (recurring requests), which require separate authorization mechanisms but leverage the core Pix infrastructure.

Pix was built with a "security-by-design" approach, resulting in an extremely low fraud rate compared to other payment rails. Its primary security concern stems from social engineering attacks targeting individuals, rather than system vulnerabilities. Key anti-fraud mechanisms include:

• Robust Information Security: Participants must adhere to minimum information security requirements and report incidents.

• Dedicated Links: Connections to Pix's infrastructure (RSFN) are through dedicated, secure links.

• Transaction Idempotency and Error Handling: Prevents duplicate transactions and ensures accurate status updates.

• Payer-Initiated Payments: Reduces risks associated with compromised Point-of-Sale (PoS) devices.

• Trusted Information Source: Payee information for alias-based payments always comes from BACEN's DICT, preventing account swapping fraud.

• UUIDs and Verified Domains: Used in Pix keys and QR Code URLs to enhance security and authenticity.

• Mandated Transaction Limits: Introduced for night-time operations and allows users to set limits with a 24-hour activation delay.

• Cautionary Freezing of Funds: Payee PSPs can temporarily freeze funds if fraud is suspected.

• Special Refund Mechanism (MED): Allows rapid blocking and potential return of funds upon fraud complaints, improving victim recovery chances.

• Fraud Prevention Information Database: Built on DICT, allowing PSPs to share information on fraudulent aliases and IDs.

Pix's fraud per transaction rate in 2023 was lower than 0.01% (0.7 basis points), significantly lower than the card network's rate of 1% in the same year. This low rate demonstrates the effectiveness of its comprehensive security measures.

Pix's performance and adoption are "groundbreaking" and "extraordinary" when compared to other Fast Payment Systems (FPS) worldwide, setting a new benchmark. While other notable FPSs like India's UPI, Thailand's PromptPay, South Korea's EBS, and Costa Rica's SINPE Móvil have achieved success, Pix consistently outperforms them, especially when normalizing for population size and economic scale.

Key comparative metrics where Pix excels:

• Transactions per capita: At 373.17 transactions per capita in 2024, Pix significantly outpaces UPI (157.58), SINPE Móvil (156.40), EBS (209.72), and NPP (75.28). Only PromptPay, which is three years older, slightly surpasses it with 397.92.

• Transaction-value-to-GDP rate: Pix's 225.65% (in 2024) is among the highest, demonstrating its profound economic relevance, surpassing UPI (76.11%), SINPE Móvil (24.20%), NPP (70.77%), and matching PromptPay (283.60%). EBS boasts an even higher rate, but it's a much older system.

• User Adoption (% adult population): Pix's 96% adoption rate is remarkably high for a system only four years old, eclipsing UPI (32.03%), CoDI in Mexico (up to 3.4%), and NPP in Australia (68.35%), and comparable to mature systems like EBS (98%) and Swish (100%).

Pix's rapid growth and exceptional performance suggest that its comprehensive approach—including strong central bank governance, mandated participation, low costs, user-centric design, and a highly generative platform architecture—has created a unique and highly effective ecosystem that other nations can learn from. The timing of its launch during the pandemic is not seen as the sole factor for its success, as other FPSs did not experience similar accelerated growth.

The "One Platform Approach" validated by Pix champions building a single, versatile infrastructure capable of encompassing all payment use cases, rather than separate systems or rigid overlays for each functionality. This approach relies on:

1. Cost Efficiency: A single platform reduces development, implementation, and operational costs for both the central bank and participants, as fixed overhead is spread across more transactions and functionalities. This leads to lower end-user fees and greater economies of scale.

2. Reduced Integration Costs: PSPs only need one integration to connect to the entire national financial system, lowering market entry barriers and fostering competition.

3. Enhanced Network Effects: Unifying participants onto one platform supercharges the value of the infrastructure for everyone, as more users mean more options for sending and receiving funds.

4. Generativity and Extensibility: The platform is built on powerful abstractions that separate the core money flow from payment initiation methods. This means new products (like NFC payments, recurring payments) and use cases can be added or innovated upon by BACEN or PSPs without altering the fundamental infrastructure or requiring complex new integrations. For instance, Pix's Dynamic QR Code URLs allow for rich metadata exchange, which can be adapted for various payment types.

Other jurisdictions can apply this model by:

• Central Bank Leadership: Emulating BACEN's strong governance, taking a decisive role in building and operating the infrastructure, collecting industry input in a neutral environment, and balancing conflicting market interests for systemic benefit.

• Adopting a Generative Architecture: Designing the FPS with clear abstractions that enable extensibility and evolvability from the outset. This means defining a stable core for fund transfer and a flexible framework for payment initiation.

• Mandating Participation: Ensuring broad adoption by requiring key financial institutions to join, creating a ubiquitous network from the start.

• Prioritizing Low Costs and User Experience: Making the service free or very cheap for end-users, especially individuals, and implementing minimum usability standards to bridge the technology adoption chasm.

• Continuous Innovation: Encouraging PSPs to leverage the platform's extensibility to develop new services, fostering a dynamic and competitive ecosystem.