Brazil’s instant payment system, Pix, is projected to process $30 billion in e-commerce transactions for recurring bills within two years following the launch of its new feature, Pix Automatico, according to a recent study by financial technology firm Ebanx. This innovation is anticipated to significantly benefit streaming companies and other businesses reliant on subscription models.
Introduced in late 2020 by the Brazilian Central Bank, Pix has rapidly become the preferred payment method for Brazilians, surpassing credit and debit cards and drastically reducing cash usage. Currently, Pix facilitates over 2 trillion reais ($338 billion) in monthly transactions.
The upcoming launch of Pix Automatico in June is designed to automate recurring bill payments, including utilities and streaming services. This feature promises to streamline the payment process for both consumers and businesses. Ebanx Vice President of Product, Eduardo de Abreu, emphasizes the significance of Pix Automatico for online businesses, particularly those in the software as a service (SaaS) and streaming sectors that depend heavily on recurring revenue streams.
While credit cards are considered the primary competitor for Pix Automatico in e-commerce, Abreu anticipates that initial growth will primarily originate from new customers who currently lack access to credit cards or sufficient credit limits. This expansion suggests a significant untapped market potential for recurring payment services.
The $30 billion projection by Ebanx focuses solely on the e-commerce sector, implying that the overall transaction volume processed by Pix Automatico could be substantially higher. The current landscape for recurring bill payments in Brazil relies on bank invoices and automatic debiting, requiring businesses to establish partnerships with multiple banks. Pix Automatico simplifies this process by enabling vendors to collaborate with a single financial institution.
Despite the potential disruption, Moody’s Ratings Senior Analyst Alexandre Albuquerque believes that traditional lenders are unlikely to face significant threats from Pix Automatico. Banks benefit from diversified revenue streams and offer customer incentives such as cashback on credit card payments, mitigating the impact of this new payment method.
In conclusion, Pix Automatico is poised to revolutionize the recurring payments landscape in Brazil, offering a more streamlined and accessible solution for both consumers and businesses. While the projected $30 billion in e-commerce transactions represents a substantial impact, the overall potential of Pix Automatico extends far beyond this initial estimate. The simplified payment process and increased accessibility for previously underserved customers position Pix Automatico as a key driver of growth in the Brazilian digital economy.
