PIX: positive impact on business management
By Leda Cavalcanti and Neusa Japiassu
Created to be a very broad and accessible payment method, Pix allows different agents to offer the service and, with the central platforms being provided by the Central Bank, it enables a model with fewer intermediaries. Any transfers or payments are already made with Pix, simply using the mobile device.
Pix is yet another option available to the population, who live with traditional types of transfers, says Breno Lobo, head of division at the Central Bank’s Competition and Financial Market Structure Department. “The difference is that we do not need to know where the other person has an account. You transfer from a phone in your contact list using the Pix Key. There is no time limit or day of the week, and resources are made available to the recipient within seconds. Works 24 hours between any banks, from banks to fintechs and from fintechs to payment institutions.”
Payment transactions using bank slip require a barcode scan, while Pix can scan a QR code. The difference is that, at Pix, settlement is in real time. The payer and the payee are notified of the completion of the transaction and payment. “Payment transactions using a debit card require the use of cash machines or similar devices. With Pix, they can be started using the cell phone, without the need for any other device. Pix tends to have a lower acceptance cost because its structure has fewer intermediaries”, explains Breno.
Model of security
Pix was developed with a series of robust security mechanisms. In addition to innovating the user experience, speed and availability, it added exclusive layers for protection, such as fraud markers, and implemented measures already existing in other payment methods.
“The traffic of key information and transactions is through an exclusive, resilient network with encrypted information, which has existed for almost 20 years in Brazil, in which all high-value transactions in the country travel. In addition, as the main channel for using Pix is the mobile device, the authentication of transactions uses modern features, such as biometrics or facial recognition”, highlights Breno.
According to the Central Bank, it has “anti-fraud engines” operated by the institutions that offer this service. They allow the identification of atypical transactions, outside the user’s profile, blocking suspicious transactions for analysis for up to 30 minutes, during the day, or 60 minutes, at night, and rejecting those that are not confirmed to be safe. On its basis there is DICT data (Directory of Transactional Account Identifiers), protection mechanisms that prevent scans of personal information, and has “fraud markers”. In the event of suspected fraud or consummated fraud, turn on the alert to all institutions participating in the system.
The Central Bank recommends that the retailer signal the acceptance of payments with Pix at the points of sale and advise the teams on the new model.
Institutions can establish maximum limits for transactions based on the profile of each customer, period, account ownership, service channel and initiation procedure. These limits are anchored in the same values set for other payment instruments, such as TED and debit card. Like other electronic media, Pix has transactions that are fully traceable, as they are account-to-account transactions. In other words, the recipient of a financial transfer in a situation of kidnapping or other means of unlawful coercion is fully identified.
Pix Advantages
For payers
- It is faster than the credit transfers currently available, such as TED, DOC and bank slip.
- Simpler to start, as it only requires the use of a cell phone (this prevents other devices from being touched).
- More practical. Enables initiation by reading a QR Code or by clicking on the contact list.
- Safer, as it allows biometric authentication or facial recognition, using features available on the cell phone.
- Cheaper, for providing gratuities for initiation.
- Transaction completion notification.
For payees
- Lower acceptance cost than other electronic media (due to the presence of fewer intermediaries in the payment chain).
- Immediate availability of resources, which tends to reduce the need for credit.
- Ease of process automation, payment reconciliation and systems integration.
- Easy and quick checkout.
- Favorable for e-commerce.
- Transaction completion notification.
For Brazilian economy
- Promote the electronization of payment methods, which have social costs lower than the social cost of cash, increasing the efficiency of the economy.
- The traceability of transactions allows better money laundering prevention.
- More competition in the retail payment market, which promote the provision of better-quality services at lower prices, with positive consequences, including in other payment methods.
- Encouraging the entry of new agents, including those from outside the financial system, which encourages competition.
- Potential for financial inclusion, due to an environment with more providers to explore niche markets, and lower costs of initiation and acceptance
Transfers and fees
There is no minimum limit for payments or transfers via Pix. In general, there is also no maximum value limit for making a Pix. However, considering criteria to mitigate the risks of fraud and breach of the regulation to prevent money laundering and terrorist financing, participating institutions may establish maximum limits for the initiation of a Pix, per paying user. Example:
- By period (day and time)
- By account ownership
- By service channel
- By initiation procedure
In relation to fees, in the case of a legal entity, the institution holding the customer’s account may charge a fee for sending and receiving funds for the purposes of transfer and purchase. It is also possible to charge a fee as a result of contracting ancillary services related to the sending or receiving of funds, in order to allow additional activities to be offered specifically for companies. The pricing model (fixed or percentage cost) and tariff values can be freely defined by the institutions. When paying Pix in the billing situation that resembles the bank slip, the payer cannot be charged.
All transactions carried out using digitally signed messages are encrypted and transmitted over a protected network separated from the internet. In addition, in the DICT, a component that stores information about Pix Keys, user data is also encrypted and protection mechanisms are in place. These prevent scans of personal information, in addition to indicators that assist ecosystem participants in preventing fraud and money laundering.
Practical, fast and cheap
It is with these words that Ivo Mósca, coordinator of the subcommittee of instant payments and spokesman for the security group of the Brazilian Federation of Banks (Febraban), defines the PIX.
“For payers, it is a faster, more practical and cheaper method to make financial transactions, it does not require the use of cards and checks, for example.
For the payee, the main advantage is that the money is released immediately in his account. In commerce, it facilitates the payment confirmation process, whether it is done directly at a store cashier or when purchasing via e-commerce. In addition, it has a lower acceptance cost than other electronic methods and it is easy to automate and reconcile payments.”
For retailers, reducing costs with intermediaries, such as acquirer, processor, issuing bank, card administration, etc., is an advantage, recognizes Alex Lima, CFO of the Grupo Novo Mundo.
“For the customer, in addition to the quick response in the transaction, without bureaucracy, just using the Taxpayer Identification Number (CPF) number, it promotes the banking inclusion of unbanked people and encourages safer electronic transactions.” In stores, Pix doesn’t change anything, it’s a payment option that replaces the debit card and reduces the use of cash. The Central Bank recommends that the retailer signal the acceptance of payments with Pix at the points of sale and advise the teams on the new model.
Pix transaction data is encrypted on the National Financial System Network. This is a data network operated by the Central Bank and extremely secure and resilient.
In Alex’s opinion, e-commerce takes advantage of Pix. “Before, the customer who chose to pay via bank slip had to wait for bank clearing, which took up to four days. Today, in 10 seconds, we have the answer. As a result, we gain speed in customer service and reduce operating costs.” The Group sees no difficulty in meeting all demands for payment methods for its customers. “With one click, we choose the buyer or card banner. It won’t be different with Pix”, he adds.
Non-immediate impact
Director of Rede, Itaú Unibanco’s method of payment company, Rodrigo Carneiro says that Pix’s impact on other traditional means will not be immediately perceived.
“Pix is a democratic way of incorporating many people who are on the margins of this ecosystem. In addition, good experiences and value propositions will preserve your space. Therefore, I believe that the card will maintain its relevance for a long time. There may be a small realignment in relation to the debt, with which Pix competes the most, but the biggest impact is in the use of paper money. Anyway, things will not be discontinued overnight. Everything is an evolution that comes with time.”
Institutions can establish maximum limits for transactions based on the profile of each customer, period, account ownership, service channel and initiation procedure.
The Rede’s role is to encourage the use of the new modality and draw on its expertise, says Rodrigo. “As we know that the customer is the boss, we are more interested in acting with a high standard of excellence in this context and establishing a long-term relationship with the merchant – this is our biggest revenue leverage. As consumers use less cash and expand the use of the electronic payment method, we will begin to have visibility into factors that influence the business. This will enable us to get to know our audience better and offer services with greater added value, with the possibility of migrating revenue sources within the same account.”
In the case of finance companies, the model has a major impact on daily payment transactions. “This is very important, as it will be the great test of confidence and scale of Pix.
Anyone who knows how to take advantage of the moment and technology in an intelligent way in their business processes can bring a much better experience to their customers and, consequently, put themselves in a different position in the market”, says Lucas Thaislo, superintendent of technology and innovation at the Banco Semear.
Institutions can establish maximum limits for transactions based on the profile of each customer, period, account ownership, service channel and initiation procedure.
The superintendent recalls that the Central Bank has a Pix road map that goes far beyond instant payments and that as part of the consolidation of that road map, players involved in retail finance must move as the vehicle of pickup and payment will be heavily impacted. “We cannot ignore the fact that there are a number of consumers who may not adopt Pix or do so late. Hybrid products can then become a reality for banks and finance companies. We must not overlook the very different realities of our market, not even geographically. So, it shouldn’t happen all at once.” Basically, by itself, Pix should not impact the credit market, says Lucas. “But I believe that, together with other initiatives, such as the Positive Registry, Pix has the potential to increase competition and deconcentrate the market.”
Source: Eletrolar News Magazine 139
