New feature of Brazil's Pix system to draw $30 billion in e-commerce payments
Launched in late 2020, Pix, an online instant payment system designed by Brazil's central bank, has become Brazilians' favorite way to pay, surpassing credit and debit cards and nearly killing the use of cash.
It currently handles over 2 trillion reais ($338 billion) in transactions per month.
In June, the central bank is expected to launch "Pix Automatico," a feature to automate payment of recurring bills such as utilities and streaming services.
"Pix Automatico should be really relevant," said Ebanx vice president of product Eduardo de Abreu, arguing key online segments such as software as a service and streaming services heavily rely on recurring revenues.
Although Abreu sees credit cards as the main rival of Pix Automatico in the e-commerce segment, he projected most of the growth of the new feature in its first two years of operation should come from new customers who are currently shut out from the market by either not having a card or not having enough credit.
Pix Automatico's total payments processed could be much higher than Ebanx's estimate, as the latest estimate focuses just on the e-commerce sector.
Currently, recurring bills in Brazil are paid using bank invoices and automatic debiting, which require firms to partner with a variety of banks to handle their clients' charges. Pix Automatico, on the other hand, will require vendors to partner with just one financial company.
Still, Moody's Ratings senior analyst Alexandre Albuquerque said lenders will likely not be threatened by Pix Automatico, as their revenues are diversified and they have client benefits such as cashback on credit-card payments.
($1 = 5.9109 reais)
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