According to data from the Brazilian Central Bank, by December 2022, Pix had included 71.5 million users in the financial system, and most transactions were carried out from person to person. The Global Partnership for Financial Inclusion presented Pix in Brazil as an example of how reducing the cost of transactions for citizens can increase their well-being.
Housewife Maria Aparecida Moreira dos Santos lives on the family farm, where she grows some food and has a garden. The farm is in the rural area of the municipality of Cocalzinho de Goiás, in the Brazilian state of Goiás. She hasn't had a bank account for most of her life and has always used cash in her daily life. Maria Aparecida says opening a bank account in the past was very bureaucratic, and she did not think about having one.
But times have changed, and approximately four years ago, she paid R$60 and quickly and easily opened a savings account at Caixa Federal, a Brazilian bank. Then, her daughter opened another account for the housewife in a digital bank, which, in Maria Aparecida's view, is an even more attractive service than that of conventional banks because, as she says, the rates of banking services are lower and the financial return higher.
Then, in 2020, the Central Bank launched Pix - an instant payment mechanism in which funds are transferred between accounts in a few seconds, at any time or day. For Maria Aparecida, it was an innovation that made life much easier for people who live in the countryside and need to travel long distances to the nearest city. "Pix is better because through it we can receive, transfer, and pay, and sometimes we cannot meet to receive money in person, and then one can transfer us the money via Pix; it is very easy," celebrates Maria.
It is more efficient and safer, and the payment becomes inclusive.
After years of study and planning, Pix was launched to transform the Brazilian retail payments market into a more efficient, secure, competitive, and inclusive one. Some of the goals at the time were to reduce the cost of electronic transactions, democratize access to electronic means of payment, and contribute to Brazilians' financial and digital inclusion. Since then, a bank's research found that cash was still the most used means of payment in the country in 2019. The study revealed that 77% of transactions carried out by Brazilians used cash as a means of payment.
However, the expression "faz um Pix" has become popular, and the service has revolutionized making payments and money transferences. As of July 31 of this year, 152,250,877 individual users and 14,777,162 legal entity users were registered, totaling 167,028,039 million users in Brazil. This is a significant number in a country with just over 200 million inhabitants.
According to data from the Brazilian Central Bank, by December 2022, Pix had included 71.5 million users in the financial system, and most transactions were carried out from person to person. Last month, it was 48% versus 39% for person-to-business transactions, resulting in close to 2 billion reais in the value of Pix transactions made in the Instant Payment System (SPI) in July. The Southeast is the leading region in Pix payment usage, followed by the Northeast of Brazil.
After years of study and planning, Pix was launched to transform the Brazilian retail payments market into a more efficient, secure, competitive, and inclusive one. Some of the goals at the time were to reduce the cost of electronic transactions, democratize access to electronic means of payment, and contribute to Brazilians' financial and digital inclusion. Since then, a bank's research found that cash was still the most used means of payment in the country in 2019. The study revealed that 77% of transactions carried out by Brazilians used cash as a means of payment.
Financial inclusion at the G20 agenda
In recent years, the financial and payment services sector has developed new business models and innovative solutions due to the intensification of new technologies by people, companies, and governments, such as the popularization of smartphones and banking applications. Since implementing the first instant payment system in 2001 in South Korea, several other initiatives have increased worldwide. Within the G20, the Global Partnership for Financial Inclusion oversees developing models of financial inclusion and knowledge sharing between member countries and those outside the group.
According to Luis Mansur, head of the Central Bank's Department for the Promotion of Financial Citizenship, in recent years, the Global Partnership has been centralizing its discussions on access and use of financial products and services for people like Maria Aparecida. "When the topic of financial inclusion entered the global agenda, the exclusion was so common that it was natural for countries to focus primarily on access to financial services," he said.
Pix was presented at the Partnership in Fortaleza's last meeting the previous month as an example of good practice for other countries. It shows that the cost of transactions for citizens can be reduced, with an increase in well-being. The director of Relations, Citizenship, and Conduct Supervision of the Central Bank, Carolina Barros, also recalls that "we know that financial inclusion is not merely an economic concept, since the access to quality financial products can empower individuals, foster entrepreneurship, and drive the economic growth."
The Brazilian presidency proposes broadening the discussions beyond these two aspects, focusing on improving the population's inclusion and financial well-being. Given the advanced access to financial products and services in recent years, this growth may be accompanied by the low quality of this inclusion and high levels of over-indebtedness. According to Luis Mansur, most countries have welcomed the Brazilian proposal.
Pix was presented at the Partnership in Fortaleza's last meeting the previous month as an example of good practice for other countries. It shows that the cost of transactions for citizens can be reduced, with an increase in well-being. The director of Relations, Citizenship, and Conduct Supervision of the Central Bank, Carolina Barros, also recalls that "we know that financial inclusion is not merely an economic concept, since the access to quality financial products can empower individuals, foster entrepreneurship, and drive the economic growth."
This year, the Brazilian presidency seeks to discuss, within this group, a definition of financial well-being and, based on this understanding, suggest ways to measure this well-being to monitor the result of this inclusion process continuously. These measures will try to capture through objective and subjective indicators the financial life of the citizens. The citizen's level of indebtedness, relationship with finances, and the impact that financial decisions have on their personal, family, social, and even health. It also intends to discuss metrics for the quality of financial inclusion.
The last meeting in Fortaleza included all G20 countries and seven other invited ones, as well as international organizations such as the World Bank, the Inter-American Development Bank (IDB), and the Organization for Economic Cooperation and Development (OECD). The next Global Partnership for Financial Inclusion meeting will occur between September 25 and 27 in Foz do Iguaçú, Paraná.
