94
95
CMSPI – IAC State of the Industry Report
CMSPI – IAC State of the Industry Report
This vast differential underscores the importance of banking participation, seamless banking integration and user-friendly experiences. Whereas the Central Bank of Brazil mandated Pix adoption for banks with over 500,000 active transaction accounts, the CoDi system saw some of the largest banks in Mexico slow to voluntarily integrate, with banks such as BBVA, Citibanamex, and HSBC not releasing CoDi widely, and when they have, the processing times often lag the requirements of the Mexican central bank Banxico, leading to delayed payments. 189 Upon launch, reports showed that only three or four banks were able to initially offer the product, and despite the fact that most banks today offer CoDi, there are delays and user difficulties in completing transactions. 190 Conversely, Pix has launched with standard user experience guidelines, wherein participating institutions are required to ensure the transfer and payment processes are clear for end users. Pix is also a low-cost payment method for merchants to accept. In 2022, Pix cost an average of 0.22% of a transaction’s value for merchants, whereas debit cards in Brazil cost slightly above 1% and credit cards 2.2%. 191
3.0%
2.5%
2.0%
1.5%
Figure 4.4 – Payment Methods in Brazil (includes P2P, P2B, B2P and B2B) 185
The growth of Pix originated in P2P payments, with 903 million P2P Pix transactions in December 2021 as opposed to just 203 million P2B (i.e. consumer to merchant, or C2B) transactions. However, P2B volumes have increased rapidly, growing to 1.5 billion in December 2023, with 149 million consumers and 14.9 million businesses using Pix. This widespread usage suggests Pix has provided digital means for historically underserved individuals to transact. One key selling point for underserved consumers may be that a bank account is not required for Pix usage: a smartphone is sufficient. 186 Pix appears to have heavily cannibalized cash payments, as cash withdrawals have decreased from 10% of payment transactions in Q1 2020 to 2% in Q1 2023. Not every country has had the same success as Brazil. Despite launching one year earlier, Cobra Digital (CoDi), Mexico’s faster payment solution, has notably lower usage than Pix: In 2022, CoDi processed just 3.01 million transactions, 187 when Pix processed 24 billion: 8,000 times the volume. 188
1.0%
0.5%
0.0%
Credit
Debit
Pix
Graph 4.7 – Average Cost of Acceptance for Payment Methods in Brazil (2022) 192
189 https://electronic-payments.h5mag.com/epi_se_jul_aug21/mexicans_say_que_to_central_bank_pay- ments_network_codi 190 https://electronic-payments.h5mag.com/epi_se_jul_aug21/mexicans_say_que_to_central_bank_pay- ments_network_codi 191 Central Bank of Brazil and the Bank of International Settlements 192 https://www.reuters.com/article/idUSL2N2VP316/#:~:text=The%20paper%2C%20which%20was%20co,- cards%20reach%202.2%25%20in%20Brazil.
185 Pix by the Numbers Q4 2023 (hubspotusercontent-na1.net) 186 PagBrasil Pix | Instant payments in Brazil 187 CoDi transaction number in Mexico 2022 | Statista 188 Pix by the Numbers Q4 2023 (hubspotusercontent-na1.net)
Powered by FlippingBook