Accorinding to The Economist, America’s top trade official Jamieson Greer is not happy with the Brazilian instant payment system Pix. As he sees it, Pix “unfairly disadvantages” American firms such as Visa and Mastercard and has proposed an extra 25% tariff on Brazilian goods in response.
A US Trade Representative investigation last month into alleged unfair trade practices claimed Brazil gave preferential treatment to its “national champion” to the disadvantage of US payments providers, encouraging Pix’s use over competitors by capping fees. All financial institutions with more than half a million customers must offer the tool to their customers. The report called policies around Pix “unfair and discriminatory” while alleging a conflict of interest in the central bank’s dual role as operator of the system and regulator.
Why on Earth does a domestic payment system in another country bother the US Administration so much? Well, in case you’ve been living in a cave for the last five years… Pix was launched in November 2020 by the Banco Central do Brasil and has since become one of the most successful instant payment systems in the world. Just for comparison, it was adopted faster than India’s UPI and is wider in scope than Europe’s SEPA Instant. In a relatively short time, it has fundamentally restructured how Brazilians save and spend.
(And it’s moving across the Latin America, making it one of the most consequential fintech developments in the region and a strategic reference point for investors, banks and regulators alike. Colombia’s Bre-B launched, in June 2025, is directly modelled on Pix and instant payment infrastructure is already available in Panama, Peru, Bolivia, Paraguay, Venezuela and Ecuador through regional partnerships.)
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It accounted for more than half of all transactions in the country in the second half of 2025, just over one-quarter by value, and according to the central bank is used by more than 170mn people — some 80 per cent of the population. The system handled R$3.48tn ($650bn) across 7.9bn transactions this May alone.
From: The payments darling in Trump’s crosshairs.
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Let me reiterate: Pix is an astonishing success. It has 178 million active users (nine in ten of whom are individuals) and handles almost seven billion transactions per month, with an average transaction value of 460 reals (approximately $90). Since it launched it has evolved contactless interfaces, billing solutions and a variety of other services including Pix as collateral. It also became first step towards financial inclusion for many Brazlians and players including Nubank, Mercado Pago,and Pagaleve now offering a variety of options including interest-free installments and longer term financing plans with rates of up to 9 percent a month.
I noted that nine in ten users are individuals, but the fact is that B2B transactions are the fastest-growing segment, up 50% year-on-year in early 2025, and already account for almost half of the system’s total transaction value despite representing only 3% of volume, a clear indication that it is becoming core business infrastructure in the country.
(Incidentally, Brazil leads globally in Open Finance, with 60 million active consents and 100 billion monthly API calls, which is four times the volume of the UK’s Open Banking system, positioning Brazilian banks at the frontier of data-driven financial services.)
So, how does it work? Well, Pix is a real-time payments scheme, operating on the central real-time clearing and settlement system (SPI) that operates 24/7. All banks and payments institutions in Brazil with more than 500,000 accounts must offer and receive Pix payments. Financial entities that are not regulated by the BCB are able to participate in the Pix system indirectly through regulated entities but are required to comply with certain regulations and supervision applicable to the offering of Pix services, including technical and operational capabilities such as liquidity risk management, cybersecurity, AML/CFT and capital requirements.
A core component of the Pix system is the Transaction Accounts Identifier Directory (DICT) which holds an alias for anyone or any business that wishes to receive Pix payments. Users can choose their own aliases (up to five per account for individuals). Interestingly, almost half of all user choose the system’s own randonly generated alphanumeric string while fewer than a fifth choose to user their mobile numbers. I know that mobile numbers are convenient but I’ve alwways that that these kinds of aliases, or “paynames”, should not themselves be more personally-identifiable information (PII).
When making a payment, the alias is decoded against the DICT and the recipient’s name is displayed to the payer to check it is correct before paying. This helps prevent misdirected payments and fraud. Typically, users can report any fraudulent aliases they encounter directly to the BCB through their payment apps. Payers are authenticated in their app by their bank or payment provider, who then authorises the payment.
Inclusion
Pix is important not only as a payment system but also in terms of financial inclusion. The World Bank finds evidence that the use of financial accounts (with a bank, MFI or mobile money provider) supports the development towards broader use of financial tools including saving, borrowing and insurance. This helps people to increase their financial resilience and counteract issues of not being able to manage aspects such as unemployment, medical bills or school fees.
According to survey data, although four-fifths of Brazlians have a bank account, almost all of them (97%, in fact) have used or are using Pix now. This implies a substantial fraction of the populaton that do not have a bank account but are Pix users either through a PSP account or relative or friends’ account, reflecting the impact of Pix on financial inclusion
Access to such financial accounts can substantially reduce people’s stress and make their lives easier, benefits whose importance cannot be understated. In particular, the ability for included participants to reduce overall ‘transaction costs’ (including the time a person spends completing a task) have been noted extensively by researchers working in many different countries. Research from rural Brazil shows how citizens benefited from the arrival of Pix because it meant they did not have to travel to town to withdraw cash as frequently.
There’s no doubt that all that Pix displaces cards. Cards were 40% of retail POS payments last year, in 2030 they will under a third. This is in line with the BCB’s expectations that credit cards will eventually disappear to be replaced by Pix payments through online/mobile wallets linked to credit accounts or overdrafts on bank accounts.
(Nu, for example offers this already through its Pix no Crédito service.)
Reals and Relationships
Brazil clearly sees Pix as a fundamental component of its national sovereignty and I think there is every reason for more countries to see their domestic payment schemes this way, which is presumably why Mr. Greer wants to take action, so how Brazil respond to current threats?
An impartial observer will note that uneasiness about Western-led payments systems used to be confined to places that have, in John Collison’s words, “fractious geopolitical relationships” with America but as I wrote in my 2020 book “The Currency Cold War”, adversaries such as China and Russia as well as allies such as Britain and France (who are concerned with order in and stability throughout the international financial system) are seeking alternatives to American financial hegemony, albeit for different reasons.
How will all of this change the international financial system? After all, Brazil is not the only country where an account-to-account domestic schemes dominates over cards in particular kinds of commerce. Look at the use of iDeal in the Netherlands, which accounts for some XX of all e-commerce in the country.
Well, as Eswar Prasad told The Economist, the interconnection of domestic schemes (ie, bilateral and multilateral deals linking systems such as Pix and UPI) may allow countries to shield move significant volume away from international schemes (and correspondent-banking systems). The renewed drive for sovereignty and resilience in payment systems right now
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Money 20/20 in Amsterdam saw the official launch of UK Payments Initiative (UKPI) backed by the country’s biggest banks with the explicit aim of chipping away at the dominance of US card networks in UK payments.
Barclays, NatWest, Lloyds and HSBC are among the major lenders behind the FCA-regulated scheme, which is designed to accelerate adoption of account-to-account payments that bypass card rails entirely.
From: Have The Card Networks’ Grip Just Got Looser?.
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Snippings 