Brazil's instant payment system Pix, which processed $7 trillion in transactions last year, is facing scrutiny from the US government over allegations of unfair trade practices. The system, launched in 2020 and governed by Brazil's Central Bank, allows users to make real-time transfers with zero fees for individuals, bypassing traditional credit networks like Visa and Mastercard.
The Office of the US Trade Representative opened an inquiry into Pix in July, claiming it imposes unfair competition on US credit card operators by offering an alternative to transaction fees. Unlike Pix, India's similar payment system, which processed $300 billion in payments in March alone, is not being challenged by the USTR despite also having no transaction fees.
Pix is widely used across Brazil, from beach vendors to large corporations. Luis Felipe de Almeida, a vendor on Ipanema beach, said, “No one walks around with cash anymore, everyone just uses their phone, so they use Pix.” Restaurant owner Marcello Palladini uses Pix for supplier payments but noted that most clients still prefer credit cards for lunch.
Despite its popularity, Pix has vulnerabilities. Criminal networks exploit the system by stealing phones and transferring funds instantly. Between January and September last year, an estimated 24 to 28 million people were affected by Pix-related crimes, according to the Brazilian Forum of Public Security. Authorities have implemented measures such as capping transfers overnight and closing suspicious accounts.
Digital law expert Ana Paula Siqueira said, “From the technical and legal standpoint, Pix is safe. But it is not immune to fraud because its risks are not in its technology; they are in people trying to fool others.” Nevertheless, 178 million of Brazil's 213 million residents have registered for Pix.
