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Brazil Sees Surge In Contactless Payments As Digital Revolution Gathers Pace

July 5, 2024
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Data from the Central Bank of Brazil shows contactless credit card transactions in the country leapt from 23.1 percent of all transactions in 2022 to 31.1 percent in 2023, highlighting the evolving payments landscape.

Data from the Central Bank of Brazil (BCB) shows contactless credit card transactions in the country leapt from 23.1 percent of all transactions in 2022 to 31.1 percent in 2023, highlighting the evolving payments landscape.

This rise is a sign of a broader technological revolution and the country's increasing digitalisation.

In 2023, mobile devices dominated the digital payment ecosystem, accounting for 82 percent of total transactions, with consumers increasingly preferring the convenience and efficiency of mobile payment solutions.

The BCB's latest data, drawn from its "Payment Methods Statistics" report,  Brazilians' increasing adoption of digital payment instruments, with a notable uptick in contactless transactions.

Pix, Brazil's instant payment system, emerged as the second most popular payment method in 2023, handling 39 percent of all transactions. 

Card payments (credit, debit and prepaid) maintained a narrow lead, at 41 percent. 

Pixmania

The data reflects the integration of Pix into Brazilians’ daily financial activities and its critical role in the country's payments infrastructure.

Introduced in November 2020, Pix has been a runaway success story for Brazil, with the central bank expanding the instant payment system last year to allow for recurring payments, enabling international payments and offering new solutions for marketplaces to meet new consumer demands.

One reason Pix has taken off is cost. A 2022  by the Bank for International Settlements (BIS) concluded, for example, that Pix is “much cheaper than alternatives such as card payments”.

Pix payments cost merchants on average 0.22 percent of the transaction value, significantly lower than the 2.2 percent fee Brazilian merchants pay on a credit card transaction and just one-fifth of the 1 percent estimated average fee on debit card transactions.

The system’s success has prompted imitators. In November last year, for example, the Colombian central bank set out new regulations and standards governing the country’s new low-value instant payment system inspired by Brazil’s Pix.

However, as reported by žž, Pix has experienced security breaches: in January 2022, a number of Pix keys registered with Brazilian fintech Acesso Soluções de Pagamento were stolen, “due to occasional failures in systems of that payment institution”.

A Pix key is a stand-in for a customer’s bank account, such as a mobile number, email address or tax registration ID, that consumers can register and that allows them to send and receive payments. 

According to the BCB, data linked to 160,147 Pix keys were stolen from Acesso in early December 2021, including user names, tax numbers and account numbers.

Cash significant still

Despite the digital surge, traditional in-person channels remain significant in Brazil. 

Around 42 percent of the total volume of transactions in the country in 2023 were conducted through physical means such as ATMs, bank branches and other in-person services. 

This indicates that although digital payments are growing, there is still a substantial reliance on conventional banking methods, including cash-based payments. 

Nevertheless, the increasing shift towards contactless and digital payments in Brazil marks a significant transformation in the country's financial behaviour. 


     



     

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