Central Bank mulls linking Pix to foreign instant payment systems

Brazil’s monetary authority also mulls using future flows as credit collateral and is monitoring cross-border models being implemented by private agents

Brazil’s Central Bank announced on Monday (10) that it is considering connecting Pix, the country’s instant payment system, with similar platforms of foreign institutions. The monetary authority said it is monitoring cross-border transaction models being implemented by private agents in partnership with institutions from other jurisdictions.

According to the second edition of the Pix Management Report, released Monday (10), these cross-border transaction models are already enabling Brazilians to use Pix in other countries and for non-residents to use Pix in Brazil through apps from foreign institutions.

The Central Bank says the interconnection of instant payment systems has the potential to reduce fees, increase speed, expand access, and improve the transparency of cross-border transactions.

“Both bilateral interconnections and participation in multilateral hubs are under discussion. These connections would allow for international remittances and purchase transactions with funds available in local currency within seconds,” it highlighted.

The Central Bank is also exploring the integration of Pix into Brazil’s debt market, with the possibility of using future Pix flows as collateral in credit operations.

“The initiative aims to enable information and flows originating from the Pix ecosystem to support the financing of economic activities,” the Central Bank said in the report.

According to the monetary authority, the solution could contribute to improving the quality of collateral and reducing the cost of credit, especially for companies with heavy use of Pix. The Central Bank noted that it is monitoring the solutions developed by private agents to offer credit operations during the initiation of a transaction, allowing customers to split payments and transfers via Pix.

The Central Bank is also seeking to integrate “tax split” into transactions conducted through Pix.

Better known as “split payment,” the mechanism created in the tax reform will automatically settle and distribute taxes. The consumption tax reform introduced the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS). The split payment mechanism automatically and immediately retains and collects IBS and CBS at the exact moment of the financial settlement of a sale (whether by Pix, card, or transfer), directing the tax portion directly to the tax authority’s account and crediting only the net balance of the operation to the seller’s account.

The Central Bank said that it is monitoring and evaluating the necessary adjustments to the functioning rules and infrastructure of Pix to enable this functionality.

*By Hamilton Ferrari — Brasília

Source: Valor International

https://valorinternational.globo.com/