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Pix is main mean of payment used by small businesses

Central Bank’s instant-payment system is the main form of receiving payment for 40% of firms, shows survey

10/19/2022

Pix, the Central Bank’s instant-payment system, has become the main mean of payment accepted by small businesses and has helped small entrepreneurs, according to an unprecedented survey conducted by Sebrae (small-business support service) and the Brazilian Institute of Geography and Statistics (IBGE).

The digital system is the main form of receiving payment for 42% of small entrepreneurs. The survey heard, between the end of August and the first two weeks of September, more than 6,000 thousand entrepreneurs from all Brazilian states and the Federal District. The survey is divided into individual microentrepreneurs (MEI), micro and small companies (MPE) and small businesses.

Pix has its best performance among those who are MEI: 51% of them state that this is the main payment method used in their sales. Among micro and small businesses, Pix is the main method of payment for 28% of respondents – in this segment, the use of credit cards is still higher, with 30%. For small businesses in general, the system is the main type of payment in 42% of the transactions.

Like individuals, MEIs do not pay a fee to use Pix to make a transfer or a purchase, nor to receive a transfer.

Pix was already widely accepted by large retailers and in e-commerce, where it is second only to credit cards. Now, the data also shows advancement among small companies.

Sebrae’s president Carlos Mello points out that this growth of Pix as a payment method was already noticed in previous surveys. “Now we see that the digital system is increasingly occupying a prominent place among the payment methods used by entrepreneurs.”

For him, the main advantage of the system for the small entrepreneur is that it allows instant payment, “which helps maintain the company’s cash flow and have better financial control. “The immediate availability of the funds for the entrepreneur can also help to reduce the need for credit and help with the factoring of receivables,” he said.

Data from the Central Bank shows growth of Pix in Brazil in virtually all categories since November 2020, when it was made available by the monetary authority. In September, there were already 22.9 million keys registered by business entities.

Carol Mello — Foto: Silvia Zamboni/Valor

Carol Mello — Foto: Silvia Zamboni/Valor

Carol Mello, 46, is an individual microentrepreneur. Since 2015, she makes cookies, cakes and sweets under the label Caramello Doceria. She said that, until recently, using TED or DOC protocols for payment was the customer’s first choice. “Now almost everyone just pays by Pix,” she said, estimating that 80% of her sales are made via Pix.

“The first facility is that the payment comes in on the spot. And allied to that, there’s the fact that it’s free, which has attracted people,” Ms. Mello explained.

In her day-to-day business, she also uses the system to buy inputs from suppliers. “I don’t like to work with credit cards. Before I had to go after a payment slip, it was more confusing,” she said.

Each month, the entrepreneur sells, on average, 60 decorated cakes. In addition, she produces sweets daily on demand. After a lot of time producing at home, as of May 2022 she started to share a studio in São Paulo with another entrepreneur.

In the assessment of Boanerges Ramos Freire, head of Boanerges & Cia Consultoria, specialized in financial services, the fact that Pix is accessible and less complex when compared to other alternatives is a way to unlock sales. “Cards are more expensive, given the fees charged. Thus, adopting Pix is interesting and some sellers even give a discount at a payment using it,” he said.

He ponders, however, that there is still room for improvement, especially in bank apps. “The use of QR Code makes it much easier, but it is still not being used as widely as it could be,” said Mr. Freire.

*By Guilherme Pimenta — Brasília

Source: Valor International

https://valorinternational.globo.com/
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Pix gains ground as payment method among online stores

Para especialistas, exclusividade do BC no Pix aumenta vulnerabilidade

Brazil’s largest online stores are increasingly adding Pix as a payment method, with a record share in March, while debt cards are losing ground since the launch of Central Bank’s instant-payment system, the latest edition of the payment study Gmattos found.

Last month, 69.5% of the analyzed stores offered the option of payment via Pix, compared with 16.9% in early 2021, when the survey was held for the first time. The method is behind credit cards (accepted by 98.3% of stores) and banking bar-coded bills known as boletos (accepted in 76.3% of them). The study included 59 online stores, which account for 85% of e-commerce in the country.

According to the survey, the availability of debit card payment, which has never been very high, has been dropping substantially. In the January 2021 edition, it was 37.3%; two months later, it peaked at 42.3%; last month, it dropped to 27.1%.

Gastão Mattos, co-founder and CEO of Gmattos, believes that debit cards are close to the floor, but sees no sign of recovery. Rogério Panca, head of the Brazilian Association of Credit Card Companies and Services (Abecs), told Valor this week that the expansion of payments with debt cards in e-commerce is a priority of the trade group.

Mr. Mattos believes that Pix may reach 90% of stores by the end of this year or early next year. He recalled that 72% of stores that don’t work with Pix are making some kind of cash payment available, including boletos and debit cards. In other words, they have some propensity, in terms of business strategy, to also offer the Pix.

“In these stores, the option is not offered yet probably due to technological difficulties, such as integration,” Mr. Mattos said. Companies that do not offer any cash payment alternative typically work with higher average ticket sales.

The acceptance of boletos, on the other hand, has remained relatively stable. With the growth of Pix, the spread between both has shrunk, and the instant-payment system could soon reach the second position in the ranking, although there is no direct competition between payment methods.

According to Mr. Mattos, the number of online stores that offer some kind of discount for consumers who pay with Pix has been increasing. In addition to the fact that payment is instantaneous, the method also increases the cart conversion rate, or the number of purchases actually completed after the items are added to the online shopping cart. This rate is around 30% with debit cards and 80% with Pix.

Credit cards, a traditional driver of e-commerce, remains in the top of the ranking. Mr. Mattos points out, however, that alternative installment plans are on the rise. “This is a strong trend for the year. The existing options are clearly not meeting everyone’s needs,” he said, citing installment plans via boleto and direct financing with large banks. “I think smaller, digital banks will also offer more such options.”

Wallets were accepted by 44.1% of the stores analyzed in March, up from 54.2% in the same month of 2021, Gmattos said.

Source: Valor International

https://valorinternational.globo.com

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Pix beats cards in transactions for first time

Pix terá cartão para transações por aproximação offline: como deve funcionar | CNN Brasil

The number of transactions through Pix surpassed those with credit or debit cards in the fourth quarter. It was the first time that the Central Bank’s instant-payment system took the first position among the most used payment methods.

Most transactions represent transfers between individuals, but the figures indicate the widespread use of the system. For specialists, Pix is likely to grow further, but there are factors linked to security and technology, for instance, that may restrain this advance.

According to the most recent data from the Central Bank, transactions via Pix totaled 3.89 billion in the last three months of last year, up 34% over the previous quarter. In cards, transactions also grew, but at a slower pace. There were 3.85 billion transactions using debit cards (up 9%) and 3.73 billion through credit cards (up 12%). Prepaid cards advanced 20%, to 1.92 billion transactions.

Options to transfer funds like TED and DOC, as well as intra-bank transfers, lost ground since the launch of Pix, in November 2020, figures from the monetary authority show. In the last quarter, there were 294 million transactions using TED, for instance, down almost 50% in one year.

Ricardo Vieira, the executive vice-president of Abecs, an association of credit card companies, says there is no competition between transfer options and that “there is room for everyone.” “All arrangements are welcome because they bring competition and make available to the market solutions that help to insert the population in electronic means of payment.”

According to Abecs data, the volume transacted with credit, debit and prepaid cards totaled R$2.65 trillion in 2021, up 33.1% year over year. The association projects a growth of 21% this year, to R$3.2 trillion.

Mr. Vieira stresses the fact that the average ticket for card operations is much lower than that of Pix. This confirms the greater use of cards in daily payments by individuals, he said. The average value of transactions through Pix in the fourth quarter was R$495, compared with R$126 for credit cards, R$67 for debit cards and R$21 for prepaid cards, data by the Central Bank show.

The use of Pix is likely to grow further considering the low cost and speed of transactions, said José Luiz Rodrigues, founding partner of the consulting firm JL Rodrigues, which is specialized in the regulation of the financial system. This is especially true as new functionalities are included, such as the possibility of installment payments. The Central Bank has a wide list of functions to be put in place, but sources say that the schedule may be hindered by a strike scheduled by the bank’s servers.

The specialist added that, at some point, the instant-payment system is likely to start affecting cards more directly, especially debit cards. “The credit card has other advantages, such as points and cashback rewards, but then we are talking about a wealthier public. Pix has included a lot of people in the system.”

The instant-payment system is already widely used for transactions between people, but it has also been growing among companies. In February, 72% of the transactions were made between individuals, and individuals transferred funds to businesses in 18% of them. A year earlier, these shares were 79% and 9%, respectively.

João Manoel de Lima Junior, coordinator of the Nucleus for Advanced Studies in Regulation of the National Financial System at FGV Direito Rio, also believes that Pix is likely to advance further over the space of other means of payment. Yet, he sees factors that may limit this growth.

The first one is technological. “One factor is the potential institutional incapacity to, for example, face the needs of technological innovations precisely to keep the system always ahead and updated,” he said, recalling Pix was operationalized by the Brazilian state.

He says there are still risks related to fraud and operational problems. In a little over a year of operation, three data leaks occurred. In the researcher’s view, despite that, the system has not yet had to face any “scandalous” problems. “There is a very big novelty factor in Pix, it is a kind of cultural phenomenon, but it has not yet been exposed to a major crisis, such as a crash, for example. In technology, operational risk is always present.”

The Central Bank did not comment on the subject.

Source: Valor International

https://valorinternational.globo.com

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Pix’s acceptance reaches record level in January

Seguro-PIX: bancos oferecem proteção em caso de sequestro | 1 Bilhão | iG

The acceptance of Central Bank´s instant-payment system Pix as a means of payment in the largest online stores in the country reached a record level of 64.4% in January, according to a study by consultancy Gmattos, obtained by Valor. A year ago, this percentage was only 16.9%. If the growth rate is maintained, it is possible that, in the coming months, the instant payment instrument will reach or even surpass banking bar-coded bills known as “boletos” in the ranking of the most available payment methods in e-commerce.

Today, Pix, launched in November 2020 by the Central Bank, occupies the third position on the list, behind credit cards (accepted in 98.3% of stores) and boletos (74.6% accepted). The study, conducted since January 2021, analyzed 59 online stores, which together account for 85% of the country’s e-commerce.

Co-founder and CEO of Gmattos, Gastão Mattos explains that the advance of Pix does not necessarily mean that there will be a drop in the acceptance of boletos. “In contact with the stores, we realized that the boleto fills a necessary space. A part of the people would stay on the margin of consumption without this option.”

The level of boleto penetration in e-commerce remained relatively stable throughout the year. Research shows that, so far, the more affected means of payment was, in fact, debt. The modality was available by 37.3% of the brands analyzed in January 2021, a level that dropped to 30.5% last month. “Pix is beating debt because the usability is much better in e-commerce”, says Mr. Mattos.

According to Mr. Mattos, the acceptance of Pix in e-commerce could reach that of the boleto in the coming months, possibly until May. It is necessary to consider, however, that from now on the growth of the modality tends to slow down. “There are already 120 million keys enabled and this is the main subject of this industry. If the store hasn’t put this option in place yet, it’s probably because they have some non-trivial difficulty in doing it.”

In his view, security problems involving instant payment, such as key leakage, are “certainly negative”, but not strong enough “to shake the reliability of the payment”. Last week, the Central Bank reported the third data breach in six months, raising concerns about the modality’s security.

On the other hand, among the factors that can help keep the availability of Pix growing, he cites the agenda of new features to be implemented by the monetary authority, such as installment payments. In addition, he also highlights the differentials that shopkeepers are offering to those who opt for instant payment, such as discounts of up to 10% of the cash value.

The credit card, historically a major driver of e-commerce, continues in the first position in the ranking. Features such as interest-free installments and points in frequent flyer programs encourage consumers to use it, says the consultancy.

Source: Valor International

https://valorinternational.globo.com

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