If you are a customer of any financial institution, they have probably tried to convince you in the past few weeks to pre-register with Pix.
The new means of instant electronic payment that has been developed by the Central Bank will be launched on November 16 and registration will now begin on October 5.
The platform will allow bank transfers to be made at any time of the day, on any day of the week and free of charge – putting the TED or DOC in check, which today can cost more than R $ 15, depending on the service package of the account holder.
The potential impact of the change, however, goes well beyond exemption from transfers. Pix also has a vocation to replace bank slips and can change the consumption experience in debit and cash.
Among the experts, the expectation regarding the magnitude of the transformations it can generate in the value chain of electronic payment means varies.
Anyway, any percentage point in this market is very much: per year, it moves about R $ 1.8 trillion, according to data from the Brazilian Association of Credit Card and Services Companies for 2019.
Understand, below, how the service can affect consumers, companies and the protagonists and assistants of the means of payment chain (the machine industry, card operators and large banks).
In addition to the exemption from charging for resource transfers, one of the main potential changes for consumers will be the purchase experience in boleto, debit and cash.
That’s because Pix can replace these three modes.
In the case of boleto, payment is made through the bank application or an electronic wallet. For example: when the customer makes a purchase over the internet, to make the payment he only needs to open the app and read Pix’s QR code. Unlike the boleto, the transaction is processed instantly.
Cash or debit purchases follow the same logic. In a physical commercial establishment, for example, the shopkeeper can generate the QR code or print it and leave it at the counter – as is already the case today in establishments that accept instant payments from digital wallets such as PicPay or Mercado Pago.
For an individual to use the service they only need to have a checking account, savings account or a digital wallet, registered with Pix. This registration is made at the account management institution.
The customer has the possibility to register a “Pix key” to facilitate transactions – a kind of “nickname” that will be used to identify him, such as CPF, e-mail and telephone.
With it, you will no longer need to enter the bank details of the recipient of a transfer, for example. Just put the Pix key and the transaction will be carried out.
Individuals can have “Pix keys” in more than one banking institution, but they can only have one modality per institution. If you registered with a CPF at a specific bank, for example, it can only be used as a Pix key at that bank.
The biggest advantage of Pix, in the assessment of Felipe Ahouagi, a specialist in payment methods at LEK, is for the recipients.
The modality will not be free for legal entities. It will have a cost, but much less than those incurred today.
For each sale made on debit, an establishment is charged a percentage of the transaction, the “merchant discount rate“(MDR), consisting of three rates: exchange, which stays with the bank, flag, which goes to the card’s flag, such as Visa, MasterCard and American Express, and a third, retained by the company that issues the machine.
The charge reflects the various links that this chain has today, which Pix does not necessarily need to operate.
In a sale made by this modality with QR Code, for example, the consumer can pay with the cell phone (that is, without the machine), and the operation is processed by the Instant Payment System (SPI), managed and operated by the Central Bank . So the cost is less.
“The commercial establishment has every interest in adopting, as well as freelancers”, he evaluates.
João Bragança, a specialist in means of payment at the Roland Berger consultancy, estimates that, in a second step, medium and large retailers will also have a great incentive to develop the modality, since many of them act as financial.
Some have already entered the digital media business, such as Americanas with the Ame digital wallet, Via Varejo (owner of Casas Bahia) with the BanQi digital bank and Magazine Luiza with the Magalu Pay digital account.
With Pix, says Bragança, they would have access to yet another huge layer of data on the consumption habits of customers, which would allow them to make targeted offers, for example.
In addition, they could attract potential customers who are now outside the financial system – the so-called “unbanked”, who do not have a checking account or a credit or debit card.
Other potential winners
With Pix’s capillarization in retail, who also tend to benefit are electronic wallets, which now have a much larger acceptance network.
Large technology companies, in turn, would have the opportunity to enter or accelerate growth in the area of financial services, says the consultant at Roland Berger, while digital banks and fintechs would have space not only to expand the customer portfolio, but to consolidate the base they already have.
Today, many Brazilians who have an account with these smaller financial institutions still concentrate a good part of their movements in traditional retail banks.
With Pix, this logic could start to change – and hence the movement of large banks, some with large advertising campaigns, for customers to register Pix on their platforms.
“Everyone will start to dispute current accounts (of customers). The quality of the service offer and the customer experience will be critical”, points out Bragança.
The “race to secure the capture”, says Ahouagi, from LEK, is based on the logic that, once inside the bank’s platform, be it traditional or a fintech, the customer tends to use other services.
“With a relationship anchor (Pix), I try to sell all banking services, I open the possibility that he can do everything in one place.”
Impact on links in the chain
Potential losers are those who now profit from the various links in the payment chain: the “little machines”, known as acquirers, card brands and processors, which provide operational services related to cards and transactions.
Bragança estimates that, in a scenario of success with Pix (that is, widespread adoption), with a 60% drop in sales and rental of machines and 65% in revenue from MDR, the acquiring companies would lose almost R $ 9 billion in revenue.
In the most adverse scenario for these companies, the loss would reach R $ 13 billion.
Ahouagi also estimates that the sector’s margins will be pressured. But he considers that the credit modality tends to be little affected, at least in this first moment.
That’s because Pix transactions are instant. A Pix is scheduled, which could resemble a credit operation.
The Central Bank regulations establish, however, that the offer of the modality by financial institutions is optional, that the transaction cannot block an account limit and that, if the balance is insufficient on the payment date, the operation will be canceled.
That is, there is no guarantee that the amount would be paid. Thus, at least at first, the incentive for commercial establishments is small.
The consultant adds that the loss of profitability is not exactly new for some of the companies in the industry. In 2009, the Central Bank broke the monopoly of the acquiring market, which allowed, in practice, the entry of new companies in a sector hitherto dominated basically by Cielo and Rede. With greater competition, prices fell.
Since then, the global means of payment market has undergone major changes, including the emergence of new means of payment, such as cryptocurrencies, digital wallets and money transfer operators, which have changed the logic of sending funds abroad.
Instant payments, in his view, fall into this context. Thus, Ahouagi estimates that, in five years, Pix may occupy 11% of the electronic payment market (equivalent to R $ 440 billion, without taking into account the inflation in the period), a much more modest share than the Instant payment methods have taken in China or India.
In these specific cases, the consultant points out, the great success of the system was due to the fact that many people were already used to making payments by cell phone, such as China, or that a relevant part of the population did not use cards, such as India.
For Bragança, the novelty may represent a paradigm shift in the payment value chain. Brazil, he says, is one of the few countries in which the monetary authority (the Central Bank) has been actively involved in the development of the platform. The chance that it will gain scale, in this sense, is great.
In countries like the United States, for example, the instant payments network was set up at the initiative of a group of companies.
What is the interest of the monetary authority?
Pix, says Ahouagi, is another step on the BC’s competitiveness agenda – the same one that broke the monopoly of machines in 2009, which aims to stimulate competition to reduce transaction costs in the country.
In addition, the monetary authority also has the advantage that this modality gives greater visibility to transactions (especially those that were previously made with cash), with end-to-end tracking.
“This helps to reduce informality, foreign exchange evasion, and to increase the regularization of the system,” he says.
In a country full of increasingly creative forms of cybercrime, security is a key issue for the platform.
Bragança recalls that there was no standardization by the Central Bank. The issue of security is a matter for financial institutions. The logic is the same as for other bank transactions: risk mitigation systems and anti-fraud barriers vary from one company to another.
In the case of Pix, for example, in addition to the security of financial institutions’ own applications, they can place other layers – such as, for example, a maximum limit for carrying out operations with instant payment.
The expert warns, however, that cases of fraud are likely to appear, as with practically all types of payments. “It is the life cycle of any operation. It is a learning journey.”
And one must be aware not only of the possibility of scams, but also of mistakes made by the customers themselves. Since Pix is instantaneous, a transfer or payment made by mistake is not guaranteed.
It will also be up to each institution to decide how they will deal with these situations.
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