Pix Evolution and Implementation

FUTURE SUMMARY PRESENTATION IDEALIZATION EVOLUTION NUMBERS global perspective, the development and implementation of instant payment systems in different countries were speeding up. In terms of the domestic context, despite the BCB's signaling, there was a market immobility in the development of an interoperable instant payment solution. Thus, the BCB decided to take the lead role in creating a new electronic means of payment, with the aim of making the Brazilian retail payments market more efficient, secure, competitive, and inclusive. More specifically, Pix was created with the following objectives: reducing the use of cash and promoting greater digitization of the means of payment; fostering competition and promoting efficiency in the retail payments market; encouraging innovation and enabling new business models, not only in the financial and payments industry, but also in other activities in the real economy; democratizing the access to electronic means of payment and contributing to financial and digital inclusion; reducing the cost of electronic transactions; providing an experience, in the use of electronic means, that is simple, safe and without friction. 1.2 International benchmarking Since the implementation of the first instant payment system in 2001, in South Korea, several other initiatives have proliferated around the world (Figure 16). A publication of March 2023, points out that more than 60 jurisdictions already have instant payments services and new launches are expected in other jurisdictions in the coming years. 6 See BIS. Project Nexus: Enabling instant cross-border payments. 2023. Available from: Nexus: enabling instant cross-border payments (bis.org). Figure 1 - More than 60 countries have instant payment systems in place The BCB, by assuming the leadership of the project to implement the Brazilian instant payments ecosystem and through the study of international experiences, aimed at,, better understand the characteristics and profit from the lessons learned from the main instant payment solutions implemented around the world to support its decisions regarding the model to be established in Brazil. Australia, Singapore, Denmark, India, the United Kingdom, Sweden, the European Union, the United States, Italy and Mexico were the selected jurisdictions to be studied among the main instant payment schemes already consolidated in the world at that time. Some authorities were selected to host a technical visit: Mexico, the United States, Australia, Denmark, Sweden and the United Kingdom. During the technical visits, some specific issues were treated such as the type of scheme operator (market or regulatory agency), implementation costs, use cases, forms of initiation, relevant characteristics for the end user and payment service providers, as well as the role of the regulatory authority with respect to the scheme. The main objective of the work was to analyze possible solutions that would fill the gaps in the existing payment schemes and capture opportunities for the improvement of the retail payments system in Brazil. The knowledge acquired from the international experience allowed the identification of patterns and trends in the implemented solutions. The BCB sought to internalize the aspects of success and avoid incurring in the weaknesses identified, always adapting the characteristics of the studied. solutions to the Brazilian reality. The different models of instant payment ecosystems are greatly influenced by the specific needs of each jurisdiction, and even by cultural aspects, so that there is no ideal model to be followed. Regardless, the study of the international experience was fundamental for the design and construction of the Brazilian ecosystem. 1.3 The inception and launching of Pix It could be said that the inception of Pix is part of the BCB's ongoing process of monitoring, exercising surveillance and regulating the SPB. Since the preparation and publication of the Diagnosis of the Retail Payments System in Brazil, in 2005, the BCB seeks to promote a competitive, efficient, secure and inclusive retail payments market. Since then, the BCB has actively participated in the main international discussion forums on payment systems, notably within the scope of the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS), which is an international forum for central banks promoting, monitoring and making recommendations about the security and efficiency of payments and financial market infrastructures. In 2014, shortly after the enactment of Law 12,865 of 2013, the BCB published the SPB Surveillance Report' in 2013, which disclosed the surveillance. policies that guided the BCB's actions in promoting efficiency and security in the SPB and in the search for both effective access and use by the users of financial services, suited to their needs. Among the policies outlined were the "expansion of mobile payment services, due to the high potential to promote financial inclusion" and the promotion of "solutions that allow, at low cost, real-time and uninterrupted retail payments, with the advantage of payees having the financial values received by counterparties immediately available. in their account". It was the first time that the BCB publicly aired its view. about "real-time and uninterrupted retail payments", which soon became known as "instant payments", encouraging the development of an open and interoperable solution by the industry. At that time, several solutions were already being designed and implemented in several countries, with extensive follow-up and discussions at the CPMI. In 2016, the BCB acted again to encourage the development of an open instant payment solution in Brazil. An International Workshop on instant payments was promoted, within the scope of the forum for matters related to payment schemes and institutions, on which BCB experts shared with the Brazilian industry the experience of some countries in the implementation of solutions of the sort. Although some innovations have emerged in the provision of payment. services, which have enabled, for example, mobile payments by QR Code, these models have adopted a closed format, in which both users (payer and payee) need to be customers of the same institution. On the other hand, in 2018, the difficulty of coordination and the resulting lack of market mobilization made it clear that private agents would not be able to implement an open solution for instant payments by themselves. In this context, and considering 7 Available at <https://www.bcb.gov.br/content/estabilidadefinanceira/spb_docs/RELATORIO_DE_VIGILANCIA_SPB2013.pdf>. 6

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