Brazil's government-run payments system has become dominant | Hacker News Reader

Brazil's government-run payments system has become dominant

economist.com

667 pointsjcartw769 comments

I've been living in Brazil for the last 20 years.

Pix revolutionised the way we transact in Brazil. I've used Pix to pay for things that cost only cents, and I have a friend who bought her house using Pix. The system just works for any transfer amount. And it's so easy to use.

Its speed is truly baffling, and so is its reliability. Never have I failed to make a Pix payment because of downtime. I never cease to be amazed by how fast money arrives in my Brazilian account when I make a withdrawal directly from my EUR wallet on Wise. I receive a push notification from my Brazilian bank before Wise finishes running the animation of confirmation of withdrawal. It's like magic.

And it's so widespread that nowadays I don't even question whether someone accepts Pix. When I get in a taxi, no matter how old the driver is, it's certain that they take (and prefer) Pix.

I've even had homeless people ask me for Pix instead of change on multiple occasions.

Cryptocurrencies don't stand a chance.

> Cryptocurrencies don't stand a chance.

Does it work internationally? Does it send USD as well, or only the real?

If it solves th same problems, why is Brazil considering banning self-custodial USD stablecoins? And why has there been an ongoing discussion about launching mBRL, and stablecoin pegged to the real?

https://www.pymnts.com/cryptocurrency/2024/brazil-considers-...

Nearly every non-western country has it's own e-cash type system.

Everything from m-pesa in Kenya to Gcash in the Philippines to PromptPay in Thailand to Alipay in China to SGQR in Singapore to MPay in Oman....

The pattern is that these systems are nearly all fully centralised, require ID, zero privacy, usually government sanctioned, and not cross border.

And quite a lot of Western ones like Vipps. And see this long list: https://truelayer.com/reports/alternative-payments/european-...

> require ID, zero privacy, usually government sanctioned

Unfortunately systems that don't have those requirements are going to be money laundering channels. I wish it wasn't such a big concern but it's unavoidable.

>> require ID, zero privacy, usually government sanctioned

> Unfortunately systems that don't have those requirements are going to be money laundering channels. I wish it wasn't such a big concern but it's unavoidable.

There same requirements also make the likelihood of these systems scaling beyong one jurisdiction very unlikely. Tourists don't want to set up a payment account for every country they visit. Or other way around, banks don't want to KYC and set up an account for every foreign tourist.

As Visa and MC work globally, I'm betting that the dominance from those will continue. Cryptocurrencies might have some change of becoming the "global" transaction method as well.

> As Visa and MC work globally, I'm betting that the dominance from those will continue.

China, India, Brazil, Russia, Japan, South Korea, and others are all trying to expand their own transaction networks.

While it's still piecemeal, a Chinese or Indian tourist in Thailand can use UnionPay or UPI to transact without using Visa/Mastercard, a Russian tourist in Vietnam can use Mir, a Brazilian in Argentina can use Pix instead of Visa/MC as well, and a Japanese visitor in Singapore can use JCB instead.

Even the ECB has recently started considering this option (though it might also be an attempt to force the Trump admin to negotiate).

The biggest thing blocking international payment competitors is FATF, which has some regulations biased in favor of Visa/Mastercard.

> Cryptocurrencies might have some change of becoming the "global" transaction method as well

I'm not sure. Most jurisdictions that aren't the US and EU heavily regulate cryptocurrencies, and at best allow state managed or regulated cryptocurrencies, which basically makes the whole point of crypto moot.

> a Russian tourist in Vietnam can use Mir

If you can find a place that actually accepts it! It’s certainly not as ubiquitous as the local Napas247 QR codes.

Yep! And Napas247 was co-developed by Vietnam and South Korea (edit: Only VN - confused Shinhan's support for development work)!

The point is there is a steady decoupling towards non-Visa/MC payment systems outside the US and EU, and it wouldn't be too surprising if a number of these systems begin supporting inter-operability within the next 10 years.

Oh yeah, I think lots of QR code based systems in Asia are actually interoperable now (just not if you’re not a resident in any of these countries — e.g. I do have GCash, but my account works in Philippines only).

Sorry, I can't find anywhere mention it co-develop with South Korea. Can you give source to this?

Good callout! I'm wrong on that one. I was under the assumption it was co-developed with Shinhan but that was wrong.

Yes. As soon as June, Brazilian pix will support "Automatic Pix". Which means, basically, Pix will support subscriptions. So let's say, you authorize Netflix with pix, and then every month they will charge you with Pix automatically.

I find very likely Netflix or Amazon will be one of the first companies to support this in June now.

This was made initially to replace old school automatic debit for phone/electricity/etc bills, but it will support all services.

In Brazil, installments with credit cards are also super common... Basically when you put a credit card on any website or buy on a store, you can just choose to pay in 12x.

Well, they will add in September Pix Installments as well.

Intruiging (in a great way). Do you have any recommendations of any Brazilian sources (Portuguese em Ingles) about the Brazilian and MERCOSUR FinTech and Public Tech industry? I'd love to dig even deeper, but my background is more NAM and Indo-Pac driven. I passed on NuBank eons ago and don't want to make the same mistake again.

> Brazil, installments with credit cards are also super common... Basically when you put a credit card on any website or buy on a store, you can just choose to pay in 12x

Yea that kinda makes sense. The market dynamics in Brazil reminds me a lot of India albeit better regulated (thank you OECD reforms), but tbf, there has been a lot of cross-pollination between Brazilian and Indian policymakers - Cambridge MA is that kinda melting pot, and Brazil has a very similar political dynamic.

Not sure if there's an english website about it, but in Portuguese quality content you can find without paywall I would say is NeoFeed https://neofeed.com.br/

Brazil Journal too, but it usually focus more on market as a whole. https://braziljournal.com/

But most of the news are usually covered on Infomoney, Valor Economico, with the together with daily market coverage.

NeoFeed and Brazil Journal focus more on "high-quality", less content.

Thanks my dude! Obv gunna do some due dilligence, but the sources you provided look solid.

Let's grab some cacha or other trashy/bourgeois booze when I'm back in São Paulo! I'm am Arak kinda guy

> Do you have any recommendations of any Brazilian sources (Portuguese em Ingles) about the Brazilian and MERCOSUR FinTech and Public Tech industry?

the best source I could find is this: https://finsidersbrasil.com.br/

You can absolutely not use Pix in Argentina. Maybe some street performer will, but most places barely accept cards, let alone pix. Cash is still king there.

Where? Pretty much every place accepts Mercadopago at least in Buenos Aires and PBA. From big stores to smaller ones to street performers or small shops in the middle of the road.

> As Visa and MC work globally, I'm betting that the dominance from those will continue.

Until there will be a stable coin we can trust and which can be accepted by most businesses.

A state of mutual trust can be established, similar to driver’s licenses and passports: country A trusts you, they did all the legwork, we certify their endorsement, you’re fine. It won’t necessarily be possible between all pairs, but, SEPA and Interac should be theoretically interoperable; dozens of other friendly-country pairs can be thought of.

Vipps works in Denmark, Norway, Sweden, and Finland.

This is not a good argument. We can't forbid everything just because it can be used by criminals.

By the same thinking we should forbid cash, too.

We have two ways:

Give up all freedoms, forbid anything and transform the society into a mass surveillance society where everyone spies everyone, where is no anonimity and no privacy.

Or require law enforcement to do a better jobs without people giving up their freedoms.

There is a pretty big gray area in there. Literally every society on the planet has some form of "giving up their freedoms" in exchange for some amount of security. I would argue that it's impossible to have a stable society without that. The thing that's important is deciding which rights are worth protecting and which ones are ok to give up in exchange for security (or other reasons, presumably).

And it's not as if crypto is particularly anonymous. Transaction analysis will identify you unless you work hard at covering your tracks.

Maybe you can if the main use of a coin is for ransomware or drug traficking

That's okay so long as criminals can still use public lotteries for that so that the government gets its cut.

And then BRICS comes along connecting all those countries payment systems and voilà the circle is complete.

Only real afaik, although there have been some thoughts to integrating some neighbours to the system. Right afaik it works in shops popular with Brazilian tourists in the Southern Cone through some workarounds.

> Does it work internationally? Does it send USD as well, or only the real?

There are neighboring wallets (like Belo in Argentina) that support it, and I believe tourism will drive even more integration over time.

>Does it work internationally?

Does crypto? You may have heard of this thing called "tariffs" lately. Even purchases of software licenses are tariffed in Brazil[1]. The average person purchasing goods with crypto is just going to ignore this and several similar laws.

If you say crypto works to transact internationally, keep in mind: so does TF2 hats.

1: https://www.machadoassociados.com.br/en/2021/05/brazilian-fe...

Indeed, TF2 hats and gift cards appear to do something well that this system doesn't :)

I note that that thing is not "abide by the law"

Interestig, but this is also worrying to know that the government now knows exactly what you bought, where, when, and for how much. They can also (if there's a rogue government) create fake transactions to implicate you in things you haven't done

Any half competent government can always create fake transactions to implicate people, whether it’s a paper or electronic (government currency) transaction.

And a government who would resort to creating fake transactions, probably wouldn't bother with creating fake transactions at all. So that argument sounds quite out of touch.

That's why central bank digital currencies are the way to go - same amount of trust as the (real) base currency and near-cash-level privacy (modulo implementation details)

Is it much more worrying than having Visa being able to do that? Especially when you see how the US is going downhill, I think it'd rather take the risk of having to deal with hypothetical local fascist state.

There’s pretty much no practical difference between Visa knowing all this stuff and the government knowing it. All Visa’s data is at most one subpoena away and that’s the optimistic scenario.

Of course there is a difference the other way. With a government run payment system only the government knows it. Not the government and some for-profit corporation.

And maybe even some other government which was an ally until a new old president is elected.

You cannot seriously believe that. Visa or any other private card processing company would actively seek to exploit it for its financial gains within the limits of the rules. The central bank (which is not "the governmentTM") would use the data to make sure the system is functioning properly or some other public policy goal. That's all the difference in the world.

> Is it much more worrying than having Visa being able to do that?

Yes, of course it is. How could anybody think otherwise? What is the worst thing Visa can do and what is the worst thing Visa has done? What is the worst thing the government can do and what is the worst thing the government has done?

Visa has to respect whatever laws apply in the country they operate in. So if the police want Visa info on whoever, provided that a legal framework cover this issue, Visa has to give it. It makes 0 difference if the payment system is government-operated or not. In any democratic country, the police would need the approval of a judge whether the service is public or a private company. And in dictatorship, the government will get the data or ban you from doing business in the country anyway.

I can think of at least one difference. If the government wants to lie about credit card transactions, Visa has to go along with it.

If Visa has it, the government simply needs to ask for it. There's a difference, but it's not much of one.

Sell your data to interested 3rd parties? Because anything else a government can do through their own systems they can require Visa to do as well, so seems like Visa with a profit motive has the potential to misuse the data even more than a government.

You could always just use cash then Visa wouldn't know.

Yes, it is more worrying. But indeed both are bad

There is virtually no difference with a private entity which can be compelled by the government to do the same, plus has its own profit motive which could also create incentive to do it.

There must be a non-repudiation and integrity check to verify transactions (e.g., in Estonia I sign digitally all my transactions), so the latter problem is easier to mitigate.

Yes but in a private entity, the government still has to do some work (which is in the public eye) to do it, there can be more whistleblowers, etc

So there would be more safeguards

> this is also worrying to know that the government now knows exactly what you bought, where, when, and for how much

As a citizen of a still kind-of-functioning democracy, I'd happily make the trade if that means Apple, Google, Visa or Mastercard don't have the information anymore.

I don't think you've thought that through - fascists and communists both have more control over the institutions of democracy than they do over those companies. The banking companies generally don't want to be involved in anything ideological except moneymaking.

Correct. Moreover, when you are trapped by the government, few things work better than raising international awareness. Even if the companies ultimately comply, that is typically done loud and clear, and eventually snowball until it's unsustainable.

So there's this thing called a gag order.

What "institutions of democracy" would that be, if the state is fascist or communist? And I think you severly underestimate the reach a totalitarian state has. Hint: it is total.

People don't change because a state is democratic. There are still authoritarians getting voted into power and present in the government; they just get voted out if the damage they are doing gets too visible.

People change a lot when the environment changes, this has been shown over and over again. You actually only have to look around. Yet it's the people who make the state not vice versa. Quite a conundrum.

Banking companies are more than happy to fold like a cardboard box if either government threatens their money-making.

Then I would prefer to do transactions with crypto. I don't want neither a government nor corporation to peek on all my transactions.

.. so you put them on a globally visible blockchain?

As long as the blockchain provides anonimity, sure.

Tornado cash has been delisted from OFAC, and there is also something like monero / privacy coin.

Brazil has an insane level of financial fraud and tax evasion. Pix mitigates some of that, but at the cost of privacy - something that Brazilians do not care too much about.

That’s a pretty sweeping generalization about 200M+ people!

But it's correct though

A statistic isn't a generalization.

He's not wrong though. "If you have nothing to hide, you have nothing to fear" is a popular saying here. People who lived under a military dictatorship not even half a century ago will actually utter those words.

But is true. I am a Brazilian who lives in Sweden and there are multiple banks here that have blank bans on transfers from/to Brazilian banks due to the amount of fraud and money laundering and lax KYC controls. It is simply too much work for the banks here to vet those transactions and they decided just to refrain from doing it.

Pix does not substantially changes the tax evasion problem as that is mostly a problem with higher earners and small/medium business who evade tax using cash payment, convoluted setups of companies and "laranjas" (our slang for someone borrowing the name to do something for someone else, the scapegoat) as well as "non cash" transactions.

Pix mostly replaces and eats on credit card transactions that were done for the convenience aspect and no the credit aspect. As well as allow a whole new part of the country to accept electronic payments, and although that would increase tax revenue from business it also substantially increase their revenue since there is no x% from card processors and don't require special rented/bought equipment.

Visa/Mastercard report all of that to governments anyway.

A lot of governments have that ability for electronic transactions. In Brazils case specifically it was implemented as a payment broker between institutions that participate in the SPI (instantaneous payment system) and works pretty much like any other inter bank transfer system. It is also possible to use the system semi-anonymously by using a "non bank" participant that will broker the transaction for you using random keys. Which would mean not even your bank account no gets exposed, because its not used.

As far as I can tell the legal landscape of the solution currently only allow the actual government to look at the data with the standard court orders. I believe not even the 10k report limit is applied to pix atm the same way as the other methods.

Regarding fake transactions, that would be a non concern to me, the system is only centralised in parts, the banks still hold most of the data so they would have to collaborate on this potentially leaving lots of evidence behind. Governments do not need to be subtle to screw you over, see current US deportation news.

Its not that much different than how bank transfers in Europe work in practice. The US is particularly archaic in banking technology available to the public.

If you pay with Google Wallet or Apple Pay it's a corporation what you bought, when and where. And since Google knows your location and has access to your mail, social media and everything on your phone, they can connect more dots.

Google is not going to put me in a concentration camp, enslave me, or send me to die in a trench on the front lines.

(If you're reading this, please note this comment was written in 2025)

Google will just sell your data to anyone who pays more. Who might not have the best intentions regarding you.

On top of that, it will provide the said information to government agencies if asked.

Google isn't, but there might be a startup that will in the next batch.

In a sense it didn't change much. It's not like the government can access your transaction data all the time. They still need to go to court and request a warrant for that, to break your bank secrecy.

It's not different from what we had before.

EDIT: it didn't actually change a thing. Banks are still required to maintain transaction data private, and agencies, including the government, MUST obtain a warrant to break transaction data secrecy.

There's those entire thing called "laws" and "constitution" that forbids this.

And if a government decides to just ignore those, it will also have no need to watch your transactions or create fake ones.

> I receive a push notification from my Brazilian bank before Wise finishes running the animation of confirmation of withdrawal. It's like magic.

After I had to add a special animation for one email system so that user was sure that "the core functionality of encrypting" was indeed working (it took milliseconds in reality), your experience doesn't surprise me that much. But, in my "IoT" system we have a mix of devices. Our service can handle most requests in sub millisecond, but some devices (gprs) need at least minimum 1 second (20sec is still within time limit) to respond only because of slow connectivity. And then I have a parking ticket machines where you press button, wait 2 seconds, it beeps, then after 2sec it changes screen to "printing ticket", then after 2s you get the ticket, where everything can be a local action (free ticket without payment). Technology is wild.

The parking ticket machine might make things deliberately slow because the printer needs to warm up or something.

Maybe it needs up to 5 seconds to warm up if it's in deep sleep, so splitting this into three 2s periods provides the least frustrating user experience.

As soon as you need to deal with real hardware things always start to get complicated.

More likely it's warming up the mobile comms state machine, without checking if it's actually needed. Unlike mobile phones which try to keep their data connection somewhat live, IoT things often drop back to the lowest state to save power (and possibly SIM cost)

https://www.sharetechnote.com/html/Handbook_UMTS_RrcStateCha...

And programmed on BASIC Stamp on some godforsaken discontinued hardware. :)

More likely it was written by some cheap interns and requires getting unique ticket id from server for "controlling" purposes. Then there is one part time employee (met him, small talked a little) who goes from car to car with terminal and checks if those tickets are valid. I have some experience with gprs systems here, so probable flow:

- press button

- gprs roundtrip about button press with "no payment, free ticket" (2s)

- machine shows "printing ticket", asks server what to print (aka the idiotic unnecessary step)

- gprs roundtrip (2s)

- printer warmup? (?s)

- prints ticket

> to save power (and possibly SIM cost)

Nope, costs per sim are monthly per card, until you hit the data limit, then per MB. Those machines typically have enough power to keep connection alive.

More likely a parking machine needs to be accessible to all users, and some people get confused when technology works too fast.

Perhaps if you get confused by fast things you shouldn't be driving?

Perhaps if you're driving, the things around you need to give you time to react to other things around you. Fewer things are more frustrating than getting honked at because you pressed a button, then got distracted by a car pulling up which you needed to look at to be aware of, then missed the printer asking if you want a receipt, and then having to press another button to talk to someone to ask for a reprint which, of course, holds up the line of cars growing behind you while someone gets paged to come to the kiosk.

So you wrote this new scenario where the parking ticket machine does NOT print a ticket unless you confirm it (after you already pressed the button)? And you get... mildly inconvenienced by some honking. Yeah you shouldn't drive.

No, not printing the ticket isn't the scenario. Not printing the receipt for payment is the scenario.

It's not a new scenario. It happened to me.

I'm not mildly inconvenienced by some honking. That's just aggravating. I'm inconvenienced by having to call to get a receipt.

The cell providers also get really opinionated about how much / how often your IoT device talks to the cell towers when they seek to approve your device.

Even if it's free, doesn't it have to put the ticket cookie in some database?

Other machines can do it with single roundtrip (2s pause between pressing and printing). That one single manufacturer is slower than everyone, but hey, maybe the app (which requires location, phone number and vehicle number) will be faster?

Finance can be fast if wanted, and I don't think there' s a deliberate delay in Wise's animation.

In my country, we have a similar system, and before my bank sends me a push notification about the outgoing transfer, the push notification for incoming transfer pops up for most of the time. The delay between push notifications rarely goes above 2 seconds.

Ours has an upper limit to prevent abuse of the system, but you can't beat instant, actually.

> Cryptocurrencies don't stand a chance.

Pix can't facilitate cross-border micro payments.

> Pix can't facilitate cross-border micro payments.

No reason it couldn't. Bizum (mobile payments in Spain) started with just Spain but can now be used for payments across & to/from Spain, Italy, Portugal, and Andorra.

Bizum is also a member of European Mobile Payment Systems Association which I think will eventually lead to all members being able to make transfers to other members, but that might a somewhat dream rather than actual reality today.

there's a lot of reasons that it won't happen anytime soon. Those countries use euro as their main currency, also culturally and historically connected, which you can call them latins. Why don't you add Denmark to that group ? You can't because it will take ages :)

But for similar application, you could use MobilePay (Vipps?). That works across Finland, Sweden, Norway and Denmark.

So although only Finland uses Euro (and rest have their own currency), you can easily transfer money between persons using just their mobile number as an example.

You can, just the central bank /regulator of that country needs to want it. Example: Sweden, which now transacts on SEPA, jointly with EUR currency.

All Eurozone countries, all bu one an EU member (and that one is very small has a very close trade deal with the EU) so not really cross border except from a certain legalistic angle.

The practicalities are very different from transferring between say Brazil and the US.

> so not really cross border except from a certain legalistic angle

Is this a joke? Of course it's cross-border, it crosses international borders. It works because the countries involved put in the work to make it easy. The fact that you can't use Pix in the US has no bearing.

> The fact that you can't use Pix in the US has no bearing.

The comment I replied to was claiming Bizum operating "cross border" showed that Pix could do so, so it is very much relevant in context.

It is a very special case of cross border. It is technically cross border but does not have the difficulties of cross border in all of the rest of the world outside the EU.

In any case it is arguable whether these are separate countries or just states of the EU. It has a common currency, a parliament that can legislate (in certain matters - rather like the US Congress) for the whole EU, courts, a central bank, a public prosecutor and many other "national" institutions etc. it also have the symbols of a state such as a flag and a national anthem (albeit both shared with the Council of Europe), EU passports state they are EU as well as the issuing country's name etc.

Even if you do regard it as a cross border one it is very much atypical and cannot be replicated elsewhere.

The United Nations has a flag and anthem too.

The umbrella interoperability initiative that includes Bizum is Swiss (neither EU nor Eurozone).

Maybe you have a radical viewpoint, or maybe you're just unfamiliar with the subject matter, but individual EU countries are very much separate entities, notwithstanding many helpful treaties.

There are lots of transnational entities like the EU and monetary unions like the Eurozone.

There's nothing so special about this arrangement that means it couldn't happen elsewhere.

https://empsa.org/news/leading-european-mobile-payment-solut...

> The umbrella interoperability initiative that includes Bizum is Swiss (neither EU nor Eurozone).

and yet Switzerland is not one of the countries where Bizum can be used?

The UN does not have a common currency or a parliament etc.

> All Eurozone countries, all bu one an EU member (and that one is very small has a very close trade deal with the EU) so not really cross border except from a certain legalistic angle.

So what? Sweden has it's own Swish system, Sweden is well integrated in EU, Europe and Eurozone yet it only works within Sweden AFAIK.

That Bizum works across four countries is not a given just because they're all within the Eurozone. Just like how Brazil and US would need to figure out how to send electronic money between themselves if Pix was available in both countries, so did Italy<>Spain<>Portugal when it came to Bizum, which is a private company btw.

According to the wiki page for pix, Italy is in talks with Brazil to implement the exact same system.

Across the whole EU, there's already a pretty low limit on card transactions and a deadline of later this year for banks to implement SEPA instant transfers.

Brazil used to have capital controls. It seems like it doesn't any more and is aiming for full convertibility: https://www.ibanet.org/The-new-Brazilian-foreign-exchange-an... , but it's worth thinking about in these systems.

A more apt description would be it doesn't currently do it, there is no technical limitation. You can send cents across borders just fine with Wise and others without any fuss.

it's not about technical expertise but more about being a global power.

That’s true for the moment, specially because you’d need an agreement between both countries.

But payment processors in Brazil are already offering “international pix”, that Brazilians can use to pay foreign companies. It’s the same experience as pix for the customer but behind the scenes the company deals with the cross border payment.

There are even stores accepting pix in Portugal: https://www.publico.pt/2025/01/23/publico-brasil/noticia/pix...

> Cryptocurrencies don't stand a chance.

...except for inflation.

Bitcoin being down 10% in the last week doesn't promise price stability.

Bitcoin goes up and down in value, BRL (or any other government currency) only goes down compared to real goods.

That's because Wall Street investors use it as a hedge against their traditional investments which, as you know, are not so stable right now.

Can you elaborate on the technicals? Is it a phone app? Does it work through QR codes or NFC? Is there a Pix "card"?

>Can you elaborate on the technicals? Is it a phone app?

Isn't paying with some phone apps the default in China? And I think transferring using phone apps has some success in Africa, too.

I used Alipay (which is an Android application where you add a debit or credit card) for absolutely everything when I was there in October of last year. Sure seemed like everyone else was using it too.

Except for Hong Kong, they have their own thing. I just used Google pay there.

Does HK still have Octopus? https://en.wikipedia.org/wiki/Octopus_card

I remember encountering that before London launched Oyster, probably inspired by it. Worked in station vending machines as well as for tickets.

Yep, Octopus is everywhere. Alipay HK is also almost everywhere. Different app than mainland China but basically the same.

You can have several unique keys, a few are unique to the whole system (like your phone number, Physical Persons Register (CPF)), but you can have several randomly generated per bank. Usually you tell someone your phone number, otherwise the random generated string is a big string, and you actually show them a QR code so they can transfer to your account, and vice-versa.

You use your bank's phone app. You can scan a QR code or you can send money to someone if you know their "id string", like a phone number, an email or a random string of numbers - you choose the "id string" format you want, and you can have different "ids" linked to different bank accounts. There are no physical cards.

What happens if you miss-type the email or phone number when making a payment? Is there any confirmation of the persons name?

> Is there any confirmation of the persons name?

Yes, and it's a small privacy leak in Pix: it shows the person's name and part of their CPF.

That doesn't sound small?

It helps to prevent scams because you know who the money is going to (not foolproof, of course). CPF in Brazil is not as fragile or sensitive as the SSN in the US. You can't easily wreck someone's life just because you know their name and CPF. CPF numbers are shared pretty much everywhere since it's a unique identification code for a single person. All businesses ask for it when they're generating invoices/receipts etc. You basically use your CPF everywhere and there's virtually no risk in sharing it. That's not to say that identity theft is not a thing in Brazil. It definitely is, however the damage is usually not as bad as the stories you hear in the US and the blame is usually put on the banks / service providers for not doing the proper KYC to verify the documents. It'll be a headache for the person, but usually something that is quickly fixed.

Before Pix, people already needed to put the full number, the CPF, and Bank agency number, so it's an improvement compared to old Brazilian transfers.

assuming that the typo didn't lead to an invalid/unregistered key, you will see the recipient's bank, full name and masked CPF number in the confirmation screen.

I really dislike the lack of a more anonymous way to transfer money but given how prevalent scams are here I feel like there was no better option.

Also, before PIX bank transfers required a person's full name, full CPF number, full account and branch numbers so arguably PIX is helping to improve privacy a little bit.

However the big issue is when people register their phone numbers as PIX keys because it means strangers can easily get full names from phone numbers.

Google Wallet also supports Pix via Open Finance. You don't need your bank app after going through account linking.

(Googler, opinions are my own.)

It's a protocol. You make payments through your bank app. You can make payments directly, basically a bank transfer, or through a QR code.

True that, ISO 20022 based.

Brazilian here.

- no card

- technically not a specific app, its a payment method that any app with a checkout flow (for example) can chose to implement.

- you register some id with your financial institution of choice (any of CPF - equivalent to SSN, CNPJ - for businesses, phone number, email or a randomly generated key).

- keys are fully portable, as in you can revoke em or change the bank institution they're associated with any time.

- you can generate a QR code on the spot so the person paying can just scan it

- transfer is pretty much instant (under 5s seems to be the norm)

- no NFC (so works with any crappy phone)

- since its a bank transfer, and since bank transfers are insured up to 200k (afaik), its pretty safe.

> you can generate a QR code on the spot so the person paying can just scan it

You can also generate a R$0,00, print it and leave to the other person input how much will be transferred.

PS: Pix is so trivial to us that only in places like HN we can see how amazing it is

Brazilian banking system is quite well developed for a long time. Let's see if Pix being ubiquitous can help the country better develop economically, with better wealth distribution, innovation and high-paying jobs

> its a bank transfer

why can't we just use qr codes with ibans in that case?

You can use QR codes with your Pix address. I don't see why it would matter that much? I think the IBAN system is mostly used in Europe.

Because the underlying "account" is not necessarily a Bank Account.

I guess that's because pretty much nobody in Brazil knows what an IBAN is

That's something I've wondered for a long time. Especially know when real time bank transfers aren't allowed to cost more than regular bank transfers (usually free), there's really no point in creating a seperate system.

But it seems to me like banks don't really want to make bank transfers more comfortable for small transactions.

> - no NFC (so works with any crappy phone)

It is possible to pay using NFC now

There's NFC support now... You can now use Pix inside Google Pay (with NFC or QR code etc as well).

Technically Google Wallet. There is no GPay app in Brazil.

It's a functionality of banking apps. Yes, transfers are done either via a QR code or via one or more "Pix Keys", that the person/bussiness authorizes in their baking app. These keys can be the brazilian equivalent of your SSN, a cell phone number, an e-mail address or a randomly generated UUID-formated one.

It's a framework laid out by Central Bank and mandatory for medium and large-sized banks and payment companies. (For small ones, it's optional.)

Pix has several rules that makes up for a nice UX, such as being free for personal use and a 10-second limit to get a response after a transaction.

Pix is an open source specification, btw: https://github.com/bacen/pix-api

Pix is basically a commercial name for two services:

- SPI: responsible for the payments

- DICT: responsible for mapping keys to accounts

The API documentation of those services are available, but only banks can use them. When a person wants to send money to another, there's an option in the bank app for sending through Pix.

Then you have many options to define to whom you'll send that money:

- typing the bank account information

- using the Pix key (which can be an phone, email, CPF/CNPJ (brazillian documents) or a generated key)

- scanning a QR code

Note that the two latter options don't require the account information. That resolution is done by DICT.

After that, you type how much you'll send (sometimes the QR code already contains this information). Then it'll send through SPI.

And yeah, it's really, really fast.

This sounds really cool. Is there a verification step where you confirm that the right number or identifier was entered for the first payment to someone? That's always one of my biggest concerns and I don't want to enter a number twice as the verification.

The UX is standardized by the Central Bank and they mandate a step showing the name of the person/company associated with that Pix key before you make the payment. So you can always double-check.

That's exactly what I was looking for. That sounds great

You can see how it works in this video, after 3:30 https://www.youtube.com/watch?v=Wvz0Yiss4Go. It's in portuguese, but I think you will understand how the interface works.

Note that it is from a bank app (Nubank), Pix itself is not an app. Other banks have similar interfaces

Does the format for the ID have a check digit in it? Like IBANs and credit card numbers can both be checked offline by an algorithm to tell you that you've made a typo.

From my reading, the system seems like it's intended to be used with a connected device and scanned/copypasted rather than typed or read over the phone.

The CPF (persons) and CNPJ (companies) numbers has two check digits.

>Cryptocurrencies don't stand a chance.

They protect against tracking and provide anonimity. That might be valuable.

For 0.001% of the population.

To be fair, you don't know when you might need this. Crypto's useful in authoritarian countries as a means of financing activities the dictator doesn't want you to partake in, like independent media funding, or to move savings to another country in case of a "sudden" foreign currency operation restrictions.

It's even more useful to destabilize a country's economy, finance covert operations and straight out launder money!

Yes, and they are not exclusively, but largely, criminals.

It might be valuable for a minority of people, but it is an active detriment for most. I want to know where my money is going, and I want my bank to be able to get it back in case of theft or fraud.

at same time you don't wanna to ask bank for permission to spend your money every time:

"Can I buy some milk today? No!, let's visit our branch first and give some papers which will require significant time/effort to get for you."

Most just not experiencing things like this but once that happen it is hard to ignore this possibility.

I do want permission from my bank, actually. Of course not for milk, but for a car or house, for sure.

A major point of crypto is based on tracking as the ledger (blockchain) is completely public.

The identity of the user is secret. Others will just see a public key.

Only in theory right? The moment you use it with a service that requires credentials or an email or a physical address to mail to, it's not, unless you somehow wash it through an anonymous pool somehow

I wish we could make a comparison with Indian payment system calld UPI. I feel both are similar and I wish if we could know and compre all such govt run initiatives. UPI is Indian govt initiative and very reliable

UPI is great in terms of UX, but I don’t think it’s super reliable – especially big public banks go down all the time. The UPI base service had multiple incidents in the last 1 month too.

The main difference is UPI is decentralized whereas Pix is centralized to the central bank of Brazil.

Is there any way to use Pix as a tourist without Brazilian tax number or permanent residence.

Technically a pre-paid option should be possible, but I could not find anything about something in that vein.

You don't need a permanent residence, but to use PIX you have to get an ID called CPF. This is your IRS number, as you said, tax number. It's easy to get but it takes time, you can have one as national from different country.

This is true but the next step is a Brazilian bank account.

Is there an online bank that allows to create an account just with the CPF and no proof of permanent residence?

I googled a bit, seems that maybe Bradesco bank allows it but it's a lot of paperwork and you need to be physically present at the bank branch.

OK so it's firmly in the "not reasonable" territory for tourists. Just pay cash or credit card. Tourists aren't going to wait a while for a Brazilian tax id then use a Brazilian bank account before their trip. Just to select Pix as your payment method instead of card you already have in the Uber app.

This isnt a take down of Pix. Sounds excellent and should be replicated in other countries. Lets just not pretend its a viable solution for tourists.

There seems to be a new solution for tourists in Brazil to use Pix but with their digital wallet: https://www.infomoney.com.br/minhas-financas/pix-para-gringo...

I think remitly works

https://blog.remitly.com/money-transfer/complete-guide-brazi...

From what I understand it supports transferring money to an account identified by a Pix key. I don't see that you can get a Pix key there.

Similarly Revolut has an announcement but I don't believe it is available yet.

Banco Rendimento supports it, I believe.

While I agree cryptocurrencies don't stand a chance, my experience with qr systems has been a mixed bag. The country I live in has a fairly good qr code payment system. But there was one day when the largest bank went down and that was chaos (cash very much has a role to play). We also supposedly have linkage with India's UPI. Unfortunately, it was impossible for me to actually use that linkage thanks to the way upi works (I think only some subset of banks are supported).

QR codes are problematic. First of all, you can’t really verify it with your naked eye. It can take you to a fake site that looks just like the original. Using phone numbers is vastly superior.

> It can take you to a fake site that looks just like the original.

At least with PIX, you scan the QR code directly on your online banking app, so there's no risk of going to a "fake site" (and the app also displays the information extracted fron the QR code, it's not a blind payment).

There's also "Pix Copia e Cola" (Pix Copy and Paste)

QR codes carry data. It might be a URL or it might not.

The PIX QR codes are URLs without the preceding https://

Scanning a PIX QR code with your camera will just result in text, not a payable URL. You have to scan it in your online banking app for it to be processed as something.

Your banking app will load the details about the payment and you'll see the recipient details before performing the payment.

Even with regular barcode payments, these barcodes are registered with the bank before it's a valid barcode. A lookup is done, if it exists the recipient details are displayed, often the amount, and verifications that it has not expired. (Do not receive after date X)

Brazil has a pretty decent banking system, though the worst online-banking experience I've ever had. (Slowly improving)

In the case of Brazil, besides QR codes, you can also make payments using the user unique key, which can be its phone number, social security number, email or a random generated key.

> you can also make payments using the user unique key, which can be its phone number, social security number, email or a random generated key.

And you can also use the bank account number, effectively replacing older bank transfer mechanisms like DOC and TED.

> I've been living in Brazil for the last 20 years.

If you have moved about 15 years before that, you'd have experienced the hyperinflation years and you've come to understand why Brazilian (retail) banking systems were always pushing the state of the art.

(You'd also understand that cryptocurrencies are not meant to compete with payment networks that have institutional backing, but that's a lesson for another day)

I guess you could say the same thing without sounding so condescending.

Have you had any significant issues with scams? In my home country we have a huge problem of scammers calling and tricking elderly people to transfer their savings with a similar instant payment app.

We have scams just like any other place and technology. I don't think that Pix made it easier.

btw, Pix is not an app, it is a service/infrastructure that can be used by any bank

Yeah it is a thing, lots of different scams to watch out. And being held at gunpoint and made to send a transfer is also a concern.

Scams are a social problem that can't be solved with technology alone. That said, Pix includes several features to help mitigate them:

The recipient's name and part of their ID are displayed on the confirmation page. This allows you to verify their identity, as the name must be linked to a real ID.

Users must set transaction and daily limits, with any changes taking effect only after 24–48 hours.People are encouraged to maintain lower limits.

Since transactions are tied to real individuals, it becomes easier for law enforcement to track down the recipient after a scam is identified.

Brazil is amazing. I bought a coconut from an old man who was walking barefoot on the beach using my phone.

Why was he using your phone?

Why was the beach using your phone?

It’s truly remarkable and makes any interaction with a US-based payment system look ancient in comparison. One to two business days to make an ACH? Ugh, please. People still using paper checks? Get with the times.

The good thing is that Pix shows it will work for many, many years.

The bad thing is that Pix shows it will work for many, many years.

>>I've been living in Brazil for the last 20 years.

Lucky you. I've been living here since i was born. :(

Pix is surreal. It was launched in the Bolsonaro (mal)administration, designed by the proverbially incompetent public work force, and is as Orwellian as can be. Its code is nowhere to be found.

The funniest thing is that is has been adopted feverishly by the rabid right wing crazies, the same lot who want to destroy everything 'government'.

I take pleasure in listing three of the problems:

1. Lack of Transparency

2. Potential for Abuse

A government-controlled payment system centrally-controlled, with no auditability? Oh please give me more (/s)

3. Censorship and Political Control

Bolsonaro didn't even know what Pix was:

https://exame.com/economia/questionado-por-apoiador-bolsonar...

But i have said nothing about Bolsonaro's lack of awareness -- his monumental ignorance is a known fact, mind you, and that is not the core of my argument.

Correcting the blatant misinformation about the topic:

- PIX project started in 2016, public launch in 2020

- It was not "launched" by any President; the Brazilian Central Bank is an independent authority, with it own mandate, not a branch of the executive power

- PIX was co-developed with institutions of the financial sector

- It's a protocol that participants must implement, not an app. The specification is even on GitHub. I don't know what you mean by "its code is nowhere to be found".

- The Brazilian Central Bank is acknowledged as a benchmark, rather than "proverbially incompetent public work force"

It's based on ISO20022 messaging standard. Networking and security is typically custom in each country/standardized payment system.

There you go: https://github.com/bacen/pix-api

Your arguments are pretty lame. Pix was indeed launched in the Bolsonaro administration, but it is incidental. You are flailing around the bulk of my argument, which is about the source code openness, without actually attacking it.

It might as well be illegal today.

Art. 16 da Lei nº 14.063, de 23/09/2021: estabelece que os sistemas de informação e de comunicação desenvolvidos exclusivamente pela administração pública são regidos por licença de código aberto, permitida a sua utilização, cópia, alteração e distribuição sem restrições por todos os órgãos e entidades públicos.[0]

Art. 16 of Law No. 14,063, of 09/23/2021: establishes that information and communication systems developed exclusively by the public administration are governed by an open source license, allowing their use, copying, alteration and distribution without restrictions by all public bodies and entities.[0]

[0]https://www.gov.br/governodigital/pt-br/plataformas-e-servic...

So, lets open up its code!

You should read up on "autarquia federal". The Central Bank is not part of the government.

The world needs to implement Pix. I truly believe that is a system which can replace SWIFT with just a intermediary, with a virtual currency that exchange rate between the 2 countries in the operation, this way the world can have a freedom outside dollar and really fast transactions.

I'd hate to see a system like that where I live, because the government will abuse it. We've already seen Canada freeze bank accounts of protestors, and US officials put protestors on the no fly list.

This doesn't make sense as a prioritization.

Oh no, my government might be run by nazis -> Let's make the government services crap

The nazis don't need to use your crap government services, so you're just pointlessly making things worse, this is the same delusion as "But it's illegal". Why on Earth would crooks care whether what they're doing is legal?

I suggest:

Oh no, my government might be run by nazis -> Ensure this does not happen OR leave

The nuance is it does put you in a vulnerable position. It’s the financial equivalent of putting all your eggs in one basket. It looks super convenient to pay with Wechat and Pix but I can’t imagine how bad it would be if I get on the government’s bad side.

I really want a system where I can transfer money effortlessly but I also want a guarantee that I won’t be restricted access to my banking.

Unfortunately you've described the essential American view of government.

Yup. Despite how magical and convenient Pix is, I still consider returning to cash just for the huge privacy liability of using Pix. But it's so engrained in the culture now that you can't really use anything else

As a São Paulo citizen, I really don't recommend cash due robbery. Privacy may be a 1st world problem, but here, assault is a real concern.

Even in America it is an issue. Younger Americans maybe don't realise how prevalent muggings used to be when cash was common.

The govt already has full access to your bank account! Always did and KYC ended privacy.

Preventing convenient payment technology only hurts the rest of us. If you want redundancy buy gold coins.

We should focus on getting rid of KYC, instead of giving up on privacy and security.

Indeed. KYC has a purpose though -- prevention of fraud, money laundering, etc. Getting rid of KYC without a similarly-effective solution for those things seems unlikely. Ideas?

Here’s an idea, get rid of cryptocurrencies and the need for KYC basically vanishes.

If you get rid of cocaine, the need for rehab centers also vanishes.

There is no way to “get rid of cryptocurrencies” at this point save for shutting off the internet. It is not within the power of the state to prohibit, any more than prostitution or cocaine.

Sure, there would be a black market for it, but that black market would be a lot smaller than the open market we have right now.

There’s plenty of legal ways of exchanging cryptocurrencies for real currencies, shutting those down would be a good start.

That’s not really true. Most financial crimes are big operations facilitated by banks. Criminals love KYC because that’s a chance to make their operations seem legit.

Won't happen. Ever. Or concede to money laundering.

Are there any reasons we can't have both KYC and privacy/security ?

Is this a real question?

I could see some sort of certificate driven approach.

Customers and merchants generate a keypair and CSR. The CSR by design contains no personal information. You submit the public key/CSR and seperate identifying information to a KYC authority.

The government generates a signed certificate the bank can use to open an account, and the customer or merchant signs their transaction requests using their private key to associate them with the account.

The bank has a paper trail showing KYC was performed, but does not have any personal information about the participants, almost akin to the old "numbered Swiss account" cliche.

Ideally, the KYC authority deletes the personal data after issuing certificates, but I'd expect it would be more "information can be released under court order" or "revocation policy blah blah blah".

That's the level of tradeoff I'd expect is politically viable. Bank of America doesn't know you're buying hentai, but if it turns out the 1000-year-old character is actually 12, a court can lift the veil.

You're comparing Pix to bank transfers. I'm comparing Pix to cash.

Cash still exists, as well as the gold mentioned. Barter, haha. Didn't advocate against those.

Europe has SEPA payments. They are very fast and reliable, and separate from Swift.

I have only come across SEPA as a means of making transfers between bank accounts. Can it be used for payments too (e.g. instead of a credit card)?

It is also single currency - Euro only, right? Swift is global.

Dealing with many currencies and laws (e.g. countries with capital controls) is very complex.

Also, does it support micropayments?

Yes, min transfer 0.01 EUR

SEPA also works for SEK now, other EU currencies are in pipeline.

Swift is just a messaging standard and a message exchange network (distributed). SEPA is that, plus a settlement system (in a nutshell). That allows for speed and much more (instant payments, request to pay, pay by phone number, credit/debit transfers, etc).

You're bound to deal with currencies once you make any kind of transaction that originates in one currency and settles (finishes) in another.

We also have Wero now, which unifies the mobile payment systems in belgium, France and Germany, with more to follow. Promises to be a unified mobile payment system across Europe within a couple of years.

Sadly no one I've mentioned Wero to knows about it so I've never used it. I feel like banks were too set in their old ways and PayPal ate their lunch.

SEPA payments are quite expensive though, which most likely explains the prevalence of local payment system in every country.

The transaction cost compared to most domestic systems is absurdly high.

Here in Sweden we have Swish which seems to be very similar (just send money to anyone with a phone number/QR Code), but Swish is a private company, not government.

Relatedly, most company payments here, including water/electricity/etc bills, are paid using a system called Bankgiro, which is also a private company (and you can pay Bankgiro bills using Swish, of course).

And even the de facto national electronic identity system, BankID, is developed and provided by a private company. It is used to login to your bank as well as most government systems and any company can use it for login (which most Swedish companies do).

So, it differs from the Brazilian model in that all services are provided by private companies, not by the Government. Not sure which is better, to be honest. On the one hand it's hard to trust a Government like the Brazilian one given its history... on the other hand, trusting a private company even for public services seems wild: what if they go bankrupt, get sold to foreign investors, started using shady business practices??

The national e-ID scheme should obviously be government run.

There's a reason why our government doesn't do anything that you can squint into a monopoly, the EU comes after us with pitchforks when we implement government monopolies. So the alternative is regulating some standard that a private organization implements and hope regulations are sound enough to not be exploited, or pray self regulation works.

That's why our railways are falling apart and why we have 2500 pharmacies but people up north have to travel to the town 100k away to get meds.

I wish the government that we elect every 4 years with public voting and kindergarten bartering could take ownership of things that are essential to life in Sweden, but nop it's all privatized so the companies can optimize profits by removing utility (BankID seems to be an exception here where the incentives align between companies and citizens).

Love that you tell us how amazing the government run digital currency but end it with a throw away statement about how the open source version will never "stand a chance". Just like how no one uses Linux and Firefox died 20 years ago.

Cryptocurrency != OSS.

I would be interested to know what your definition of free and open source software is.

But for the record Bitcoin and it's cousins are the exact definition of free and open source software as it is both free and open source. Just because you don't like it doesn't change the facts.

>Cryptocurrencies don't stand a chance.

Until this line I forgot crypto was even competing!

Pix sounds great for most people and probably a good replacement for government issued paper notes and metal coins. But, the crypto purists like crypto that is not controlled by the government or the banks. Pix would obviously fail at attracting those crypto fans.

> I've even had homeless people ask me for Pix instead of change on multiple occasions.

Sounds like WeChat Pay. It's been years now that beggars in China only carry QR codes.

> Cryptocurrencies don't stand a chance.

They solve a different problem or have the potential to: predictable/unbiased money issuance and on/off ramp for payment platforms.

I wish the homeless in London did this, I'd happily give a few pounds here and there if it were easy to. Back when I had cash on me at all times, I would think nothing of it, just toss a coin. Now in our cashless society, I found myself at a loss to do anything about the people suffering in front of me

You could try carrying cash again, especially just a few coins for the homeless.

You could try carrying cash again, especially just a few coins for the homeless.

I make a point of carrying cash. Especially for buskers. It's just so simple to push the "cash back" button at the PoS when I'm buying something else.

(I miss the days when you could buy a CD from a talented busker.)

You could donate to your chosen homeless assistance charity and just carry cards that explain how to get assistance from the same org.

Maybe not true everywhere but in all the towns I have lived in the homeless were well aware of organizations that provide assistance. No need to carry a card about it.

Indeed, and there's usually a reason why they're on the street instead of going to those organizations (justifiable to a random other person or not).

My experience is they are already using those services but most of those services can only provide so much. In my state most people on the street already have Medicaid and food stamps but it isn’t like that is enough to get you a place to live or a job. The programs and services available can keep someone alive but are rarely comprehensive enough to deal with chronic mental and physical health issues that impact the ability of someone to thrive in a market economy. Even the most rightwing 20th century economist recognized that the state will need to step in for housing and employment for some part of the population.

Can't even be penniless these days, you need a fancy electronic device, a data plan and reliable access to an outlet before you can beg for charity. Sad world.

And then people won't give you money because "look at them with their phones! I'm sure that could have paid rent for a month"

Maybe 1/10th of the rent for a month. Second-hand crappy phones are real damn cheap. I know someone who can't afford rent even if they paid for nothing else, and they go through one every 2-3 months.

> I've even had homeless people ask me for Pix instead of change on multiple occasions.

Sounds like WeChat Pay. It's been years now that beggars in China only carry QR codes.

I saw a guy at a freeway offramp in north Texas with a Venmo (?) address scrawled on a piece of cardboard.

I was expecting China to be totally cashless when I went last year. While everyone accepts digital payments, almost everyone also accepts cash just fine.

What about tax evading people? Is the system used to tax audit people?

Yes. Every single transaction is open for the government to inspect. There is zero privacy in pix in relation to government surveillance.

> Is the system used to tax audit people?

You bet. Every pix transaction is reported to the brazilian authorities.

it works like any other bank transfer, so yes. But the bank only reports after a certain amount.

I've been saying for over a decade that crypto makes no sense for micropayments and the only reason traditional methods don't work is because they are run by rent-seeking middlemen like VISA.

Watching the Indian and Brazillian governements solve this problem by by building the payment networks themselves and removing the profit incentive has felt vindicating.

> removing the profit incentive

You're far too optimistic. The current administration is trying to work itself out of a major economic crisis and there's nothing they would like more than to tax the crap out of every single Pix transaction.

Major economic crisis? 4 years growing >= 3% doesn't look like a crisis to me.

I assume op is talking about if it were implemented in the US.

Sure not, he is just a common type of brazilians we have here called "viralatas".

Not at all. I thought twice before discussing this because brazilian politics aren't the point of this thread. The fact is Brazil is facing a major crisis due to stupid fiscal policy. Government spending is high and taxes need to make up for it. They were stupid enough to increase taxes on fuels, thereby making everything more expensive.

This is a country with obscenely high interest rates, currently at over 14% per year. It's just ridiculous. And inflation is still hovering between 4% to 5% per year, just under pandemic levels. The solution is for the government to stop spending money. They don't want to do that, they want to increase taxes instead. As a result, we're at record breaking taxation levels, last year Brazil achieved its highest tax revenue since 1995.

The current administration spent the last two years crying about the central bank's high interest rates. I can't even fathom what'd happen to this country if they got what they wanted. Mercifully, central bank has some degree of autonomy from their stupidity. After a couple years they get to appoint the head of the central bank. It turned out even their own guy wasn't stupid enough to lower the rates.

I think the only reason they haven't taxed Pix yet is the fact Pix is too popular already. I have no doubt they're still gonna manage to increase revenue by cross referencing Pix data for tax purposes.

> I've been living in Brazil for the last 20 years.

> Cryptocurrencies don't stand a chance.

Yeah, if you enjoy having your money one hundred percent controlled by the brazilian government. I can't think of a more frightening proposition. You do realize this is the country that once suddenly confiscated everybody's money directly from their bank accounts, right?

Why did they do that? Runaway inflation. Just like its fellow latin american neighbors, Brazil has mismanaged all of its currencies and it will inflate the real to zero just like all the others, it's merely a matter of time. Just look at the country's economic situation. BRL is an absolute garbage currency. Why would you even want to hold onto this crap? You're better off holding USD if you can. You're better off holding real property if you've got the capital. You're better off holding bitcoins.

Cryptocurrency? They're basically the light at the end of the tunnel. You say you've lived here 20 years. Surely you know that judges are basically gods in this country. And we have judges admitting in writing that it's essentially impossible for them to seize or in any way touch your bitcoins without your secret keys. Do you seriously believe they have no chance? In this place? They're basically the solution to nearly every single problem in the "government is stupid" category.

Surely you know that the brazilian government sucks at pretty much everything except taxing you. And you're advocating for a system that essentially implements nation wide financial surveillance. Because our number one priority is to make taxation of an already heavily taxed people even more efficient, right? So that the politicians and judge kings can enjoy their world tours on tax payer money?

Pix is very convenient. That's all it is, and unfortunately that's all it needs to be to win the hearts of people. People won't be smiling after the government starts blocking their Pix keys for arbitrary reasons, preventing them from participating in society.

If you're thinking worst-case scenarios - what about if the government simply puts you in a cell and beats you until you give them your crypto keys?

The only hope for any system is if the people fight to not live within these kinds of fascist states. Crypto is not some magic solution - and has a lot of downsides which are mentioned often.

> what about if the government simply puts you in a cell and beats you until you give them your crypto keys?

The thought does occur to me. Quite frequently in fact.

My parents lived through the military dictatorship. They once asked me to stop posting online because they were afraid I'd become some kind of target. I'm not kidding.

> The only hope for any system is if the people fight to not live within these kinds of fascist systems.

Brazilians in general tend to agree with you. That's the end game of quite a lot of brazilians. "The only solution for this place is the airport", they say.

Wow. Reminds me of cash. Which has all those same properties.

> Cryptocurrencies don't stand a chance.

Now, try to use Pix outside of Brazil - it's not even used in other Mercosur countries, what's the chance of having that adopted in other countries... And, that's problem #1.

How much do you trust your government with your money? A system like Pix don't stand a chance to get a worldwide adoption - maybe people are naive but governments won't unify to adopt a common system controlled by just a single entity / country.

What we may however end up with, are dozens of systems like Pix, one for each country, union, etc. Still cryptocurrencies as-is remain relevant (see point 1)

try to use Pix outside of Brazil

Try to use cryptocurrency for anything other than a few very specific transactions at a number of places in the world so small that it's a rounding error.

Still cryptocurrencies as-is remain relevant

And somehow less relevant than cash.

I can take cash from any country in the world to my local bank, and deposit it into my account. I can get a dozen different foreign currencies at my local branch in minutes, and almost any other currency in the world can be delivered to me by FedEx the next morning for a flat $10 fee.

I can take cash to any other country in the world and get it converted into the local currency, whether that's paper or digital in almost any city.

Crypto is great if you do a very few, very specific things in a vanishingly small number of places. But if I'd tied my finances to crypto instead of cash, I'd have been stuck many times in foreign lands.

> I can take cash from any country in the world to my local bank, and deposit it into my account.

If you are at a institution bank, probably but that's a non-existent use case - I never had Argentinian Pesos, Turkish Lira or Bulgarian Lev I suddenly needed to deposit into my bank account !..

> Try to use cryptocurrency for anything other than a few very specific transactions at a number of places in the world so small that it's a rounding error.

I'm not sure whether you travel much, but I always travel as a digital nomad. I pay small transactions with local cash or mostly bank cards as everybody does. But big amounts? That's where crypto comes into play. I've paid in crypto transactions worth a few thousands dollars because that's the only way to do it without incurring huge transaction fees and / or long processing time.

The huge transaction fees come from the occasional, but surprisingly regular, crashes in value.

You don't have a no international transaction fee card? They're trivial to get

> that's the only way to do it without incurring huge transaction fees and / or long processing time.

You're joking right? I just did a $25,000 wire internationally with a currency exchange in the middle and it cost $75. It went through in one business day. You'll get more hassle trying to withdraw from your exchange than that.

When I bought my house and did the wire it cost $15. Where are you getting huge transaction fees?

Unless of course you try to transmit it to someplace your bank or the government doesn't like, or the bank has dumb AML controls. In which case the transaction will likely get held up if it can be sent at all. If you try to transfer from somewhere boring like from the USA to Canada of course you can send $25k no problem (most of the time anyway, my bank has interrogated me and locked up my account before for attempting to send $1500 to my wife until I gave up and just used cash).

Meanwhile you could transfer $25k in crypto to Dubai and walk away with it in cash at an OTC desk in an hour via a wallet to wallet.

“ Meanwhile you could transfer $25k in crypto to Dubai”

Thats a use case 99.99999999999999999% of humanity does not care at all about.

Dubai / UAE is about the largest per capita inflow of high net worth individuals, and even on an absolute basis has one of the highest immigration inflow of high net worth individuals.

Yes if you are poor as dirt and can just take your life savings of <$10k (probably 99% of humanity) on an airplane if you need to use it in another country, you can do so no problem and you do not care, the idea of a crypto OTC desk likely does not even occur to you. It is still solving the same problem, but by being small enough that no one cares.

The data pretty well speaks for itself. Humanity with money cares a lot about escaping capital controls. This is inviolable, the more the banking system handicaps itself the more capital flows into less regulated products.

The flat fee is a small part of what that transfer costs. The real transaction fee is embedded in the exchange rate. 2% markup is not an unheard of amount, which I guess would make your total cost $515 and not $15.

There's a reason Wise is a huge business and people in Canada resort to "Norbert's gambit" to exchange currency with minimal transaction costs.

I think it was about 1% off the "theoretical best" exchange rate I could have gotten. But I don't exactly have access to those kinds of rates as an individual. Do crypto trades not have the same dynamic once you involve exchanges? Once you include the take from the USD ~> Crypto ~> $Other do you still come out ahead?

No idea, never owned or used crypto. I guess for large amounts the reference point should be total transaction cost using Wise and/or some version of Norbert's gambit if your currency pair is a popular one and dual-listed securities/ETFs are readily available.

You do know that 3 out of the 4 most populous countries have currencies with restrictions on foreign exchange? Send a lot of money out internationally and they will ask for reasons and documents as evidence.

Do you imagine that large changes in your local currency holdings with no explicable financial transactions would be unnoticed?

> I just did a $25,000 wire internationally with a currency exchange in the middle and it cost $75. It went through in one business day.

This is exactly what I'm talking about and I'm not certain whether you're sarcastic .. Paying $75 on a 25k amount with a transaction time of 24 hours to complete is absolutely insane. You'd have used USDT or USDC or any other stable coin, you would have paid <$1 of fee and got the transaction done in seconds.

How about the exchange rate padding when you go from crypto to useful currency and back?

it's a 1:1 when you convert a stable to USD - some exchanges might take a small fee like 0.01% or so ... On Coinbase it's a 1:1 https://www.coinbase.com/en-de/converter/usdc/usd

Can you be more explicit about what large, legal purchases you've made with crypto?

I'm not sure whether you travel much, but I always travel as a digital nomad.

I was a "digital nomad" before that was even a term.

I've done "work from home" in Japan, China, Macau, South Korea, Belgium, and at least ten American cities. Even way back when we did it with payphones, Telex and fax machines.

Get off my lawn.

Pix proposition is very valuable for governments, as it is the best way of controlling transactions, inside the country and cross-border.

To you second point, I think the pix penetration/popularity proves that the majority of the people trust the government for that. There are 2 key reasons for its success: It was mandatory for Banks to adhere to the system and there are no fees for using it.

Once multiple countries have their own PIX, they just need to build a federation structure to connect them and allow cross-border transactions.

Crypto-currencies have their place with people who don't trust the government, want to speculate and/or simply want to do tax evasion, but they are not and probably never will be mainstream as a transaction medium.

iTunes / Steam vs piracy is relevant here.

Most people want something that works well in the ways they care about.

People turned to piracy because it was a superior experience to the then-distribution-models.

Then, the majority of people didn't care that iTunes / Steam cost money and had DRM, because it provided a superior experience to piracy.

People want an outcome, easily, reliably: they don't care about the method of getting that outcome.

Cash is arguably more secure and likely less traceable and easier to use if you don't trust governments. I don't see much use case for crypto other then illegal activities (although possibly not always immoral)

That’s right crypto is also very traceable by the very public nature of the ledger

Somehow Monero (XMR) gets around this, used in the biggest European underground pharmacy Archetyp.

Each transaction is somehow only known by sender and receiver

> Once multiple countries have their own PIX, they just need to build a federation structure to connect them and allow cross-border transactions.

To add to this, this is already happening. For example, you can already pay in the Middle East with India's UPI at quite a lot of places, or with China's Alipay or Unionpay.

For federation, the hard part isn't building the system but building the required trust between the different states and getting it all set up legally somehow.

80 countries have instant/real time payment systems today [1], and the Bank for International Settlements is working on cross border interoperability [2].

Cryptocurrencies will likely never go away, and will remain in use for certain use cases from a cross border value transfer perspective, similar to gold; either the token moves or the ownership is updated. More interesting is offering digital wallets for a single or basket of currencies to anyone you can remotely identity proof in the world (similar to nsave [3]).

[1] https://www.volt.io/real-time-payments-world-map/

[2] https://www.bis.org/about/bisih/topics/fmis/nexus.htm

[3] https://www.nsave.com/ | https://www.ycombinator.com/companies/nsave

On top of that, the BIS isnt even needed for global real time payments. A company like Wise (formerly transferwise) or any similar entity can just hold accounts in each country and if the local settlement is real time they can also do real time global settlement by just updating their db and sending the money real time in the receiving location.

This is how they all work including western union. It's not a secret but it's not really talked about either.

No one pays FX fees on each transfer. Single large rebalancing transfers allows them to actually move money at optimal times and rates with bulk discounts. Then they can currency hedge and get larger spreads on the actual fx rate.

Yup, the point was, local real time = global real time. Local real time has been the actual thing required.

Kind of a tangent but I have some friends that are kurdish and that's how they transfer money to and fro the US and skirting whatever limits/regulations exist. They just give money to a money family in kurdistan and the money family here in the US hands it to them out of a restaurant or whatever. I've been fascinated with it since I knew it existed. It's all the same stuff with various coats of lipstick.

Don’t they need to pay for the plane ticket?

No they mean that a family member in the US gives them some of their own money, but records it to a family ledger. At some other point funds or value will be transferred, but it isn't transferred within the family for every payment.

This is exactly what it is. I kind of dig it and I'm glad I know the name now

Someone posted a link in response to you, but no money actually crosses borders.

I think the best way to explain it is an example.

My contact needs to get money to his family across the world. I happen to have a cousin that I love and trust who lives there and runs a gas station. My contact gives me 10k USD + a fee and then I call my cousin and tell him to give 10k to the contact's family member if they give the right password. At the end of the year, I meet up with my cousin and I bring him some gold or other goods depending on what our deficits are to each other.

Maybe this is a dumb question, but how is the "single large rebalancing transfer" accomplished? I don't know of any machine where dollars go in one side, are destroyed, and euros are created on the other side.

My assumption was that it usually comes down to finding someone else with money in both currencies (i.e. a large bank or government) and exchanging one for the other. Of course that's unsatisfying: it's not just turtles all the way down.

Ultimately if I'm running out of, say, USD, and have a lot of CAD, I have to to buy a bunch of something for CAD and sell it in USD. If you wanted a "zero banking" currency transaction I guess the way to do it is to park on the Canadian side of the border, buy imports to the US, walk across to the US, and sell them.

Or maybe there's a magic money shredding / printing machine that I didn't know about. I guess an international treaty could actually authorize such a thing.

> it's not just turtles all the way down

If you drill far enough... well anyway

> I don't know of any machine where dollars go in one side, are destroyed, and euros are created on the other side.

The Treasury is the machine you're looking for. And the wire transfer, SWIFT, usually, is the tool of choice. In a sense, yes dollars are "destroyed" in that they leave that monetary system. Banks like BoA hold a few kind of ledgers with the country's central bank one which gets discounted during the outflow.

So euros are then credited to whatever institution you transferred it to. That country just became that much richer.

This is why places like HSBC, CITI have free transfers for intra-bank but you still pay $15 for the same via wire transfer? Why would you ever want to do that? beats me, but the point is you can and it has a very real affect on the system other than some internal database going +/-.

But in the end, it's the country's central bank credit/debiting any institution and then just... printing? when it wants? but other countries... m1... foreign debt.

so yea, turtles.

> The Treasury is the machine you're looking for... In a sense, yes dollars are "destroyed" in that they leave that monetary system.

So are you saying there's an procedure where the US treasury takes USD out of circulation, and the ECB introduces the equivalent in Euro, according to some official exchange rate? How do they set the exchange rate?

No, of course there isn't. The explanation is absolutely ridiculous.

Go ask chatgpt, it will explain it quite well.

> The explanation is absolutely ridiculous.

You'll need to provide more constructive feedback. Or are you suggesting that it's not "destroyed" and that the origin country can freely transfer money without discounting its books?

There are so many problems with your explanation it's hard to know where to start. Just ask ChatGPT to explain it and go back and forth until it's clear.

Really, it's bad form to comment on something technical where you are just miles out of your depth.

This is very very wrong. Sheesh. Stop.

Yes, at some point you have to load a plane with cash. The point is that each of the turtles can consolidate smaller payments to both minimize transfer fees and cancel out money flows running in opposite directions.

Yes, it's just the banks. They have both. It's really not rocket science.

It should be satisfying in the following sense - the financial system is nowhere near as complicated as it seems. There is no magic. If you find yourself feeling like there is some magic somewhere, just ask another question because there is likely just a word or a layer of indirection that is making something quite simple seem mysterious.

Well, at your suggestion I did ask ChatGPT, and it pointed to one sort of magic trick: currency swaps between central banks. That is (kind of) a machine where one type of money goes in one side and the other type comes out the other. There's even a cool tracker [1].

But yeah, it's mostly just market forces that keep things stabilized, it seems.

[1]: https://www.cfr.org/tracker/central-bank-currency-swaps-trac...

Even central bank swaps aren't magical. The ECB for example has an account for the US Fed, the same way they have an account for HSBC or whatever. The ECB can credit the account for the US Fed, the same way it can for anyone else.

The main trick that folks get hung up on (and, you might be too) is that most "money" is just an IOU from a bank. We've just created a sophisticated way to trade the IOUs and call it "money".

This is pretty much what I was asserting in my original post, my question was if there was some additional mechanism beyond simple market forces.

It's not inconceivable (nor magical in any way) to imagine treaties that would allow an actual conversion from one currency to another, where USD go in one side and Euro come out the other. Situations like this have existed in the past: currencies have been converted when, for example, the former currencies in the Eurozone were converted to Euros.

No such situations exist right now: entities just hold multiple currencies and exchange them for you.

It's simpler than you are imagining. In practice, anyone can make USD go in one side and EUR come out the other. It's just the notion that something is "destroyed" which is wrong. If I owe you x USD, you can call me and we can agree I now owe you y EUR. If my name is "JP Morgan Chase Bank", it's really easy. And, the "m1 money supply" just changed. But, m1 is kind of nonsense because... it includes checking account deposits which are just IOUs from banks. So, no one just got richer (the bank still owes you money) and nothing is really going on.

Your mental model is falling down around the definition of "currency", "money" etc. It isn't what you imagine it is. We just have a system for trading bank receivables and call it "money".

I appreciate the replies, and asking chatgpt is good advice.

It took some prompting to get it to say "It's really not rocket science." though.

https://chatgpt.com/share/67fa2c5f-d940-800a-bdad-b723e763e0...

The condescension is towards people in finance pretending there is a lot of complicated stuff going on, not towards people trying to parse it.

> Wise (formerly transferwise)

Off-topic, but: this is possibly one of the world's dumbest rebranding exercises. I forget now how many years ago they made the change, but I've never heard anyone outside the company itself refer to it as just "Wise" without adding "(formerly transferwise)".

Runner up: Strategy (formerly MicroStrategy)

someone somewhere needed a promo...

Followed by gross new brand styling

Could've at least gone with calling themselves "Wise.com" or something, like "Make.com" does.

Got nothing on "X" though. Have yet to hear someone in person say "on X" rather than "on Twitter".

Really? You don't like the pea-soup on vomit color scheme?

I've been a loyal user of wise for more than a decade, since I used them to pay for my cross-currency wedding, and I can accept the name change since they wanted to show they were more than just money transfer (but just make it "bankwise", ffs), but the new brand style was a disaster.

Notice they dialed it down over time,it's now more neutral than at launch, so someone must have listened to the complaints.

I've been with them a while also and haven't noticed a huge change apart for switching the colour from blue to green?

Site from 4 years ago "The cheap, fast way to send money abroad" https://web.archive.org/web/20210305145221/https://wise.com/

vs now "Send money globally for less" wise.com

They also switched to the peculiar slanted round font ("wise sans"), and padded every page with whitespace so it has a much lower information density. The actual experience past login never had much so yeah it's not as much a change as the public branding.

But mostly, it's the light-green-on-dark-green text which I dislike, and I _think_ they dialed down its usage compared to e.g. the brand announcement[0] and how the blog looks[1] compared to the main site. Then again, de gustibus.

[0] https://wise.com/community/en/brand-new-look [1] https://wise.com/gb/blog/welcoming-libby-to-the-board

Oh yeah, the second one [1] is kind of ugly.

I think it's kind of a status thing that you can afford a short word domain like wise.com. But yeah, in conversation I still call them transferwise.

"Certain use cases", yes

(DRUGS)

Cryptocurrencies will always be relevant for people show any to exploit others by moving money across borders in ways that governments can’t control (e.g., organized transnational cyber criminal gangs).

Can we just agree that a system where every user/member needs to keep a large if not the entirety of the history of transactions is never going to work well?

Fine keep using crypto as a store of “value” but as a way to handle day to day transactions it has failed.

How are you paying for a cab with crypto while travelling? For international payments, cards like Wise is simple and it works. You raised question about currency and the govt that manages it. The same question is true for most crypto as well; extreme volatility is not good for a currency.

> Now, try to use Pix outside of Brazil

Most people in Brazil won't do this so who gives a shit? You may as well say, "now try to use Pix on the moon!"

I trust Visa and Mastercard with my money! A government is a lot safer!

> How much do you trust your government with your money?

When you use Pix, your money is not in custody of the government. The money goes to/comes from a standard commercial bank, just like a wire transfer. What the government (Central Bank) does is just the infrastructure for moving money between bank accounts.

The point about not being a global standard is valid, though. Although there are initiatives in progress to connect similar instant payment systems from different countries as other users have noted.

That doesn't particularly address the point. Say the government decides that they don't like the political party you're supporting, or maybe you've been doing something they consider morally unclean like gambling or consuming pg-13 media. Let's say the government decides that your payments can no longer use the payment infrastructure. Now imagine it's effectively the only practical payment method.

It's a permissioned system.

Crypto is intended to be fundamentally different. Good crypto is permissionless. If you own it, you can spend it, regardless of what anyone thinks.

How do you propose to get money into and out of crypto in this world where your government doesn't want you to pay for anything? Or we just assume everyone starts as a crypto millionaire in this example?

The same way we get value into fiat currency. By exchanging it for goods and services?

So you will find employment with someone who also has trouble with the government? Why would they pay you in crypto? In this hypothetical world where the government doesn't want you to pay for things, and crypto exists, why aren't they also going after your crypto and employment?

>If you own it, you can spend it, regardless of what anyone thinks.

Which is also its primary drawback.

Transactions are non-reversable, which inherently makes it unsafe for wide-scale use. Consumer protection is so important, clawing back payments is an incredibly important part of that.

Wrong copy-paste and all my money could just be gone forever? Yeah no, that's never going to fly in countries where consumer protection is seen as an important public good and always expected.

What you tout as a plus, is a major negative for the vast majority of people in developed democratic countries. In quite a few of them, access to a bank account is even a fundamental right.

And all that just because of some abstract fear? nty.

Transactions are non-reversible in the same way cash is. Are you equally worried about me paying rent in cash? Buying a hamburger with cash? It's not a big deal, and mostly a UX issue as argent and others have shown.

I like the idea of my money being my money and not just mine as long as my government isn't annoyed with me. I don't much care if other people are afraid of it. That's a great thing about crypto. You are free not to participate, unlike the corpo-fiat systems.

And with a digital system like Pix at least you can definitively prove you did pay, unlike with cash, unless you take extra steps when paying.

Then they can also decide you can't have a license to drive a car, that you can't fly, that you can't own a home, that you can't pass a background check, that you can't have a social security number, that you owe an exorbitant amount of tax, that you should be in jail, that your immigration status is revoked because you wrote a news article they don't let, etc etc etc

Your government already has a monopoly on violence and owns your whole life.

The answer to 'bad things exist' is not 'therefore nothing can ever be better'. You fix things 1 step at a time. Removing the hand of the state from the levers and dials of the value transfer system is a good thing.

Those things exist because we want them to. You call it bad that there's a government that decides I own my house and nobody else can take it. I call that a good thing. The government can already freeze your bank account with no problem, they don't need Brazil's system to do it.

> it's not even used in other Mercosur countries.

You can pay with Pix in Paraguay since the largest privately owned payment processor implemented it and it's available within all payment terminals (POS) across the country.

The government of Paraguay also runs a similarly good system called SIPAP, that is replacing card payments because it's faster and free to use.

Good? Dozens of fee free instant digital payment options sounds like a huge improvement over the outrageous network of credit/debit fees

> How much do you trust your government with your money?

Eh, the money was printed by government and any value it has is based on how much people trust their government. Using government payment processor is small potato compared to those...

More than that, any value it has is based on the fact you have to pay taxes in it, by threat of violence.

To be fair, that threat of violence is also the only thing enforcing your claims of property ownership. In its absence you'd have to rely on your community's consent.

I guess that alternative scenario sounds more dystopian the more wealth you have - but with enough wealth you can also imagine having a private security force providing that threat of violence to keep the community in check.

You have bizarre logic here. For example, in a topic discussed about GPUs, someone would say that it's not possible to run databases on GPUs, so GPUs don't have any chance of succeeding.

> How much do you trust your government with your money?

Do you trust crypto companies? Mt. Gox, FTX, Bybit…

Do you know that crypto companies must follow government rules, regulations, and laws? Russians were banned from using many crypto exchange platforms. China has strict rules for its citizens. You can buy and sell crypto in Brazil, but you must use only Brazilian reals.

Pix isn't global, but no one government person outside of Brazil can block this system.

MasterCard, Visa, Amex, and UnionPay work worldwide, but only a few countries regulate them, can block their usage, and can use data for tracking and statistics.

Pix is free to use, so no one needs to pay an additional "tax" to MasterCard and Visa (it's about 3%).

Google and Apple cannot say that if you want to pay, you must use only our devices.

> Now, try to use Pix outside of Brazil

Now, try to buy ice cream from street vendors using any crypto coins.

I would say your post has the logical flaws, not confronting any of the core criticism and instead misdirecting to other topics.

Creating efficient payment rails for its own currency is one of the most obvious roles for government imo. If the government provisions the currency, why would they not also provision the infrastructure (like the printing of the paper money).

That said, you’ve not offered a good rebuttal to any of OPs concerns, just repeated how good pix is within Brazil…right now with their current government.

Digital payments does present a uniquely frictionless route for tyrannical governments to assert power should they ever decide to weaponize it…unlike paper money which is harder to control.

Also, international payments is absolutely an issue with these systems. So you hate crypto due to its 2010s association with annoying Twitter bros. I get it.

But what are you offering instead as a solution to global money? Paying Wise stupid currency movement fees and waiting for them to close your account because you tried to buy a house for your family in the country you moved to?

I don't offer any solution for the problems you mentioned, and I don't think it is possible.

If we want to have global money and a global payment system, they would be controlled by governments, international organizations, God, Devil, Cthulhu, Spaghetti Monster...

There is no magical solution. We, as a society, need to establish competing social institutions, and try to control them, and try to force them to compete. There is no solver bullet.

Don’t lie to yourself, bro.

Sounds like you're trying to solve a byzantine generals problem.

>Digital payments does present a uniquely frictionless route for tyrannical governments to assert power should they ever decide to weaponize it…unlike paper money which is harder to control.

This is true, and there's already a proposed law to ban paper money in Brazil.

Digital payments also present a uniquely frictionless route for a functioning democratic government to tax goods and build a better society

Yes, all governments are honest, non-corrupt, and never abuse power.

No, but abusing a payment system makes little sense. If people don't trust it they won't use it and then it serves no purpose. Incentives between government and people can have overlap

They said cryptocurrencies don't stand a chance,

the conversation is supposed to be about cryptocurrency technology,

but you're talking about the gross financial companies that operate in cryptocurrency as if they ARE cryptocurrency.

Not just one feature of its existence.

Common conflation.

If we want to use technology in real world to solve real world issues, we need to consider all important non-technical things.

Nuclear Energy is great, but governments and international organizations want to control it because it is too dangerous. So, if we need to use Nuclear Energy, we must play by such rules.

Money is the same thing. Each government wants to control them, regardless of their form.

If someone wants cryptocurrencies to be widely adopted, there is no option but to give them to businesses and governments.

So, crypto would be regulated like usual money. Major blockchains have records for all transactions, which can be tracked and used by businesses and governments to implement more strict control over the whole world. Therefore, the more people use crypto, the less privacy they have.

The Internet and Web were designed to be anonymous, but cookies, IP addresses, data collection, ML/AI, IMEI, MAC, and the control of registration in ISPs and mobile operators have led us to a situation where the government and companies can easily track people. The same situation would be with crypto, which was designed to be anonymous but used in another way.

Don’t lie to yourself, bro.

Now that I've recognized this pattern I see it everywhere: someone invents part of a solution, probably including some cool technology, then hails that as the solution and insists everyone else is wrong for not getting it.

The classic one is some FOSS people inventing a protocol where servers can talk to clients, and declaring a problem solved, when in actual fact, most people don't have a server. Mastodon is this, but so is XMPP.

HTTP took off because there were servers you could fetch things from with HTTP, not because it theoretically allowed you to fetch things from servers.

Paper euros aren't cool because I can "have money". They're cool because I can go to the grocery store and trade them for something to eat. My bank card isn't cool because I can "have money". It's cool because I can go and swipe it and not have to count paper euros. If you want cryptocurrency to be cool, you're going to have to get it integrated into grocery stores, which is, of course, impossible because it can only process 7 transactions per second. You also need a way to convert my paychecks into cryptocurrency, but this is basically solved with crypto exchanges now.

> the conversation is supposed to be about cryptocurrency technology,

> but you're talking about the gross financial companies that operate in cryptocurrency as if they ARE cryptocurrency.

That's because the middlemen are inevitable and they work the way they do for a reason—governments won't let them work any other way.

Cryptocurrency is a technological solution for a human problem, and you can't analyze the impact of the technology divorced from the human reality without losing so much resolution as to make your analysis meaningless.

...sure I can.

Because I've done the reading.

Which is ironically what's keeping us from adopting proper food, air, healthcare, and financial systems. Everyone doing the reading.

This is the Hermione Granger approach to broomstick flying, and it doesn't work.

Did you just hand-wave me from fiction? lol

Anyway, I think I meant "unironically", in retrospect.

> How much do you trust your government with your money? A system like Pix don't stand a chance to get a worldwide adoption

You mischaracterized that.

> You have bizarre logic here. For example, in a topic discussed about GPUs, someone would say that it's not possible to run databases on GPUs, so GPUs don't have any chance of succeeding.

He's saying it wont get adopted worldwide. Not that it wont succeed (which is a very ambiguous metric).

> How much do you trust your government with your money?

If you’re not able to trust the government to not steal your money then I suspect you have bigger problems and should look to claim asylum elsewhere.

So every Canadian?

Canadian here, I trust my government with my money because I don't run or fund any criminal enterprises.

I have never had any reason to believe my government is stealing my money, or even has any interest in stealing my money. It's not some centralized criminal organization like it is becoming in the United States or maybe in other third-world countries. I do pay my share of taxes (for which I receive excellent value), and some of that goes to consumer protection including banking and financial institution regulations.

Who I don't trust completely with my money is banks and financial institutions. That's why I have a government who regulates them. And hey, it has worked where elsewhere it has failed (see 2008 global financial crisis).

> How much do you trust your government with your money?

The money that they issue? Your question is radically flawed.

That aside your main point is that crypto continues to be as relevant in cross jurisdiction payments even after the introduction of a pix like system of payments in each country.

Crypto transaction volumes across all crypto currencies are so low compared to FOREX in any of the worlds currencies (even relatively unused ones - currency speculators still drive transactions even there) that it’s basically irrelevant today in this use case. So your argument becomes it’s irrelevant today and will continue to be tomorrow.

If you’re to express the volume of all crypto transactions, not just those for the purpose of international transaction, just everything in all crypto currencies. The daily volume compared to transactions in all the other non crypto currencies ends up looking like a homeopathic dilution ratio, 0.00000000000000…%

>What we may however end up with, are dozens of systems like Pix,

Lol It's not that we may ended up like that, systems like Pix are built for the sole purpose of domestic transaction.

Globally, Visa / Mastercard trumps crypto.

> How much do you trust your government with your money?

Money is (for the purposes of this conversation) created and guaranteed by the government, and regulated by law, so I think it’s a little weird to not trust the government with my money.

> How much do you trust your government with your money?

I cannot fathom the reasoning that would lead you to believe this question is a big gotcha.

The value of any currency comes from the trust in the economy and military of the governments that stand behind it. The USD's value is backed by the economy and military of the United States. The Euro's value is backed by the economy and military of the Eurozone countries. If you live in the US and the economy collapses to the point the USD loses its value, the value of the USD will be your least concern - same if the US were invaded by a hostile military force and unable to defend itself.

Your currency is literally backed by your country. Your country issues the currency and your country sets the rules for how much additional currency banks can conjure into existence. Whether you use that currency in cash, bank transactions or payment systems doesn't affect that point. Cash is the only one of the three that's meaningfully different in that it allows the physical transfer of money without a "paper trail" because you can exchange it for goods and services directly (which doesn't apply to e.g. handing over keys to crypto wallets as part of a transaction because you can't move the balance off the wallet without leaving a digital trail).

There is no inherent value in cryptocurrencies just as there is no inherent value in state-backed currencies. The value of cryptocurrencies primarily hinges on their use as a speculative investment - even stocks or futures have a more concrete value basis (representing ownership of parts of a company and future ownership of trade goods respectively). This means its value is not tied to the performance or power of any one state but it also makes the value much more volatile and unreliable and much easier to manipulate.

Cryptocurrencies also stil rely on trust: for most cryptocurrencies you have to trust the people who issued it (and in some cases the underlying code), given how many have suffered from "rug pulls" and pump-and-dump schemes before. For currencies like BTC you also have to trust that no single actor can be able to perform a 51% attack. For currencies like ETH, you have to trust the smart contracts that might be involved (and have been exploited/abused before). Most people also rely on third party services to actually trade crypto currencies, so they need to trust those as well and there have been plenty of scams involving them even where they didn't turn out to be unreliable outright.

All currency is vulnerable to manipulation by agents with control over disproportionate amounts of it - billionaires, megacorps, banks, states using it as a reserve currency, etc. But non-cypto currencies suppress some of that control with their own and they have a symbiotic relationship with their currencies (i.e. if the USD does badly, that affects the US economy, which affects the US government budget, which affects its ability to maintain its institutitions including the military).

So the question then is not how much do you trust your government but do you trust your government more than the wealthiest other actors (domestic and foreign) that would exercise influence over the currency in its absence. Given that the state is not only the only thing enforcing the idea of property rights but also able to take everything away (including your physical freedom and life) from anyone who lives in its sphere of direct influence, even if you distrust your government more it's a moot point unless you also have the ability to flee it at a moment's notice if necessary - and I'd wager that's not the case for the overwhelming majority of people.

You say we may end up with systems like Pix for each country/union - sure but there's no reason there can't be interoperability between them the way there is with SWIFT transactions. At the moment Brazil seems to offer Pix International and Pix Roaming to open the system up to tourists and Brazilians travelling abroad but there's no reason similar systems can't develop a standard for direct compatibility without having to require support by each foreign bank or POS system.

Cryptocurrencies seem to have settled into a different use case. No good for paying for coffee, but good for gambling.

Like if you want to bet on "Elon out of Trump administration before July?" you kind of have to go to polymarket or similar. (current price 41c)

Actually, you can find "pix accepted here" in shops/exchanges in neighboring countries. It's probably more wide spread near the border. Similar to east Asia, were alipat/wechat is widely accepted in areas flooded with Chinese tourists

If you don't trust your government then you don't own anything, since it's the government that enforces and arbiters property rights. The fact that you own a home is only written on some piece of paper and you trust the government to enforce it.

Crypto is only worth something because you can convert it to fiat and with that fiat can sign fiat denominated contracts that are enforced by the government.

Canada has etransfer/interact which works well.

>How much do you trust your government with your money?

Well I'm in Canada, I would trust the govt and the banks with my money before I trust anyone else (yes yes, trucker protest bullshit still didn't shake my confidence)

Which is ultimately the problem. The govt and well regulated banks are the only ones you should be able to trust, but in many case you can't trust governments or their ability to regulate things.

>How much do you trust your government with your money? Sowing or stirring up doubt or implicitly initiating a conspiracy means you don't have an argument for crypto.

Bitcoin can never be a Pix replacement. It's too damn slow, and others have pointed out, having to manage the entire transaction history is just stupid. (A end customer might not have to do serious book keeping on transaction history, but companies would.)

Pix works great for Brazil. That's what it was intended to do. And that's what it does. Case-closed.

wikipedia doesn't say much about it.

I wonder about a few things.

Is it safe? I'm pretty sure everyone not carrying cash is very good for physical safety, but can someone be coerced into emptying their bank account at knifepoint?

Are there scams? Can stolen money be retrieved?

Presumably it has the same simple safeguards that a US system like Zelle or Venmo have. I needed to pay my sister-in-law $1300 the other day, and forgot that I have a $500/day transaction limit in place for such transfers, at my own choosing (setup when I opened the account).

I thought zelle was riddled with fraud?

Perhaps. I use it to get cash to family members, no issues.

Yeah Pix lets you choose limits. There's decent granularity for those, you can pick max $ per day, per transfer, per period, and per device. There's a caveat that when you increase a limit it takes a day or two to come into effect (basically to avoid people being forced to increase their limits by criminals).

what system protects you from being coerced at knife point?

Writing a personal check? Stolen cellphone?

Cryptocurrencies are full of scams because you can't put the money back, and some are anonymous.

> Is it safe?

Given the dimension of Pix, I never heard of someone losing money directly because of using it (for example, here in the past was common to see where credit cards were cloned)

> can someone be coerced into emptying their bank account at knifepoint?

There are limits of use. Banks have different settings for limiting the amount of money that will be transferred in different situations, like when using their apps outside a trusted network, at night, etc

> Are there scams?

Just like any other payment method. I dare say that it is even safer, as some banks (e.g. Nubank) alerts if you are trying to transfer money to a suspect account.

> Can stolen money be retrieved?

Perhaps if you contact the bank, but as far as I know it is not a feature :-(

> Perhaps if you contact the bank, but as far as I know it is not a feature :-( Acctually there is a feature to request the central bank to retrieve money stolen through PIX scam. It is called Special Return Mechanism (MED PIX). Link here: https://www.bcb.gov.br/meubc/faqs/p/o-que-e-e-como-funciona-...

Thanks for your information!

Wise's unsupported business list is two pages long https://wise.com/us/acceptable-use-policy

and the transaction size limits is also too low, for me (I think you can send multiple in quick succession though)

to avoid random fintech platform and bank scrutiny for normal transactions and the higher scrutiny given to international transfers, I've used crypto for over a decade. For investment, to pay or be paid by vendors in other countries. Places where paypal/wise/revolute/n26 will flag, hold, or western union was the only option. This hasn't changed in that decade, only more onramps and offramps for crypto has changed for more proliferation.

once our crypto is within our respective domestic jurisdictions, cashing out typically has an extremely fast, non-scrutinized option, similar in speed to Pix

another comment mentioned that the Bank of International Settlements is working on instant cross border transactions, I suspect the scrutiny and transaction size limits will remain inferior to the unlimited size that crypto provides, and lack of scrutiny that a transaction converted to a domestic transaction will provide.

Been using stablecoins for a decade and the transaction costs have dropped as blockspace has become more abundant, and the stablecoin issuers create and redeem for free.

there is also the benefit of not needing the domestic currency or banking rails, since the crypto ecosystem has many investment options for different risk profiles, and many vendors to pay for goods and services.

It is very common that people do not find this competitive because they aren't aware they have a problem, or don't have a problem. But many people do encounter a friction once they branch out into another industry to try to change their circumstances, or earn larger amounts. That attracts enough people to crypto.

Where do you find crypto-native vendors?

In pretty much any active telegram group or discord for a crypto project

And if you start your own community, people come out of the woodwork early on or after any AMA session

Outside of that there are job boards and word of mouth

Kinda of depend on your bank though. I know several banks that screw up leaving the pix system offline.

I don't understand the willingness of the masses to willingly give governments complete access to all of their transaction data. At least in the U.S. bank transactions are feebly masked by institutions. I have no doubt the government gets bank transaction data, but with Pix, it's just making it even easier to monitor what you're doing. Is it that the transparency makes it feel good? No middleman selling it or giving the facade of private transactions?

I do not see how this is better than cryptocurrency, which, while not fully anonymous aside from Monero, is at least decentralized.

Well, unlike cryptocurrency, it works reliably and quickly, does not require you to manage your own keys, and provides recourse if things go wrong. Those are pretty strong points in its favour.

"Is the government spying on me?" tends to be a concern that is secondary to things like "Am I getting paid?" and "Can I buy groceries?"

Technologists repeatedly get this wrong. The best money system is the one that lets me buy groceries in exchange for working, not the one that's cryptographically unbreakable. Unless I'm running an illegal internet-based drug empire, in which case, the ones that aren't cryptographically unbreakable are disqualified, since I'd need the government to not be able to trace the money flow in my illegal drug empire. But even real illegal drug empires that are not internet-based mostly use government-issued currency, with measures taken to hinder tracing!

Are you worried about the power the central bank has?

What if they deny service to or apprehend the assets of people they politically dislike? Also couldn't they crush any hope of anyone's profitable business? Could a person or business function without it? What about in ten years?

What if they track people by their transaction and built profiles of them? They could essentially make it too dangerous to do business to people who are disliked.

I don’t know why you’ve been downvoted. In fact in Brazil people got their financial operations restricted for expressing their opinions on the internet. Pix is an authoritarian government wet dream.

It's so nice to have an example of how nice things could be if we don't let corporations nickle and dime us for crappy rent-seeking service.

I'm thinking, maybe controversially, centralized national payment service like this should be government-run based on my experience with Alipay which is a digital payment service in China.

Due to it's commercial origin, Alipay is filled with unwanted ads and traps. Almost every time I made a payment with it, a pop up prompts me to enlist their Ant Financial LOAN service either now, or being prompted for the same question again 30 days later (yep, not Yes or No, but Now or Later). It's just fucking ridiculous, I don't need a LOAN for a $400 projector, and I don't need a LOAN for a $4 hair cut (Xi should probably do something about it, really).

I'm glad that at least people of Brazil don't have to suffer that kind of shit. At least their government-run program is better scrutinized and boring, thus more dependable, that's a good thing in my eyes.

> I'm thinking, maybe controversially, centralized national payment service like this should be government-run based on my experience with Alipay which is a digital payment service in China.

After dealing with many private sector services, I think a lot of things should be government run.

For instance: weather apps. Private sector ones are just a vector to track and sell your location data, and they rely on government data anyway. It'd be much better the government roll out an API and an app that uses it, so you can avoid the private sector altogether.

It's funny but I always had assumed all countries had their own state-owned weather services, until I found out there was no such thing in Germany.

That's not true. See https://de.m.wikipedia.org/wiki/Deutscher_Wetterdienst

Oh well! Good to know! Next time I'll use DWD instead of using those weird apps. Thanks!

No the DWD is not allowed to provide a weather app I believe. Because it would compete with commercial apps. It offers an app which issues weather warnings though.

DWD is allowed to provide a weather app, but not for free. So they offer it for a nominal one-time fee instead.

Windy.com gives you ECMWF. ECMWF has a much stronger model.

That's exactly why NOAA in the US is under attack. Conservatives see $$$ potential if they privatize it.

I'm sure the NOAA is under attack because someone in the administration really wants to launch a new weather app.

Granted this is from Trumps first term, but actually yeah. https://www.cnn.com/2017/10/14/politics/noaa-nominee-accuwea...

"Speaking to the The Palm Beach Post at the time, Barry Myers said he supported the weather service returning to its “core mission … which is protecting other people’s lives and property” instead of spending “hundreds of millions of dollars a year, every day, producing forecasts of ‘warm and sunny.’”" Also from the same article: "He told ABC News in May 2005: “We work hard every day competing with other companies and we also have to compete with the government.”"

Theres some more info here: https://en.wikipedia.org/wiki/Barry_Lee_Myers

The weather app doesn't give much money. The main business sells weather and climate data B2B: agro, insurance, logistics, retail, supply chains, advertisement, medical, etc.

Companies whose primary business is weather apps are small, and such areas are highly competitive.

i think it more has to do with wanting to cut the deficit in preparation for tax cut extension + NOAA and other science agencies are politically vulnerable in a way that medicare/ss are not

NOAA is only vulnerable until a rural town gets decimated with no warning by a tornado.

> why NOAA in the US is under attack

As far as I know, AccuWeather is the main beneficiary. You can easily find reliable sources about it.

The cause is that NOAA publishes all weather data, calculated models (global coverage), meteostations data (global coverage), and weather radars to the public for free (US only, maybe also Canada, I don't remember). Therefore, many weather companies use such data to do their business and compete directly with AccuWeather. They don't like this.

On the other hand, state weather agencies that calculate global models in many countries don't provide such data for free. Therefore, startups and small companies who work in weather and climate fields use NOAA data and directly compete with AccuWeather or don't pay them for data access.

I believe in Germany the national weather service in fact rolled out such an app, but was then stopped by a court because this counted as unfair competition with private entities.

In The Netherlands, weather companies sued the national weather service because their new app was seen as competing with their interests, but they lost the court case (summary proceedings): https://www.rechtspraak.nl/Organisatie-en-contact/Organisati...

> stopped by a court because this counted as unfair competition with private entities

I came across this recently as well. This is one of the most insane aspects of our current zeitgeist.

In a world where VC unicorns and megacorps commonly engage in dumping behavior to coerce market share, public orgs still need to walk on eggshells so they don't outcompete the "uwu smol bean" private sector. Even when they are providing what could be considered a public good or necessity, like weather info. Totally insane.

The app is still available, but to use all features you have to pay a couple of Euros: https://play.google.com/store/apps/details?id=de.dwd.warnapp...

In the US, just bookmark the NOAA projection maps and your local zip on weather.gov. you don't need an app.

Hey, don't look up what the current admins plan is for NOAA

I'm in NZ and actually prefer the Norwegian Govt weather site www.yr.no, which is about as accurate as our local one, easier to use and has no adverts.

I just needed to change language to English from below the hamburger menu icon.

Looks useful for Christchurch. Cheers

In the US your weather app is effectively government run.

Your iPhone skins the government data and makes it pretty. Nobody is selling your location or information. And you can always get the data directly if you want.

100% this. My (BR) state have a weather service¹, it's amazing. What people don't realize, it's that the service isn't just made for normal people see if is gonna rain, it's that the service is fundamental for agriculture and farmers. So they have radars, frosts alerts, specifically tailored to farmers as well.

It's also used to give alerts to electricity companies, etc...

Their weather prediction, it's just way better than any other service.

There's also national service, run by CPTEC/INMET, but they are lacking funding IMO...

[1] https://simepar.br

This is exactly what has been playing out in the Netherlands the past couple of months: the weather institute (KNMI) released their own weather app that is functionally the same (in some cases superior) as the commercial apps that want your consent to track and serve ads.

The commercial parties sued KNMI, even though they use the public data provided by KNMI. Luckily they lost: https://www.dutchnews.nl/2025/02/knmi-weathers-legal-app-sto...

And as a bonus, there was some Streisand Effect when this was in the news, and people have been moving to the KNMI app in droves.

Switzerland has this for weather - government data, projections up to a week in advance. Of course no ads, tons of info ie on PM2.5, pollen, avalanche risk in mountains etc.

> For instance: weather apps. Private sector ones are just a vector to track and sell your location data, and they rely on government data anyway.

Or you do it like we do here in Germany and take the dumbest route you can imagine.

We had a very well working publicly funded weather app from DWD (Deutscher Wetter Dienst). The primarily purpose of this app was to warn from extreme weather conditions, but it also included an ad free (because publicly funded) and rather accurate forecast.

Then a private entity sued claiming that the DWD app also providing weather information is unfair competition for private competitors. The won in court and now the publicly funded DWD app has a paywall for a previously free feature.

payment services should absolutely have a public option, as should many other basic eservices like email, mychart, etc. the issue is that our government in particular is incompetent, has legal difficulty hiring for merit, and has public sector unions (which is effectively empowering people to negotiate against the collective democratic will of the people).

i’ve worked on internet projects with the feds before, basically the current iteration of the federal government does not really seem capable of doing these things because of how the rank-and-file is structured.

i think it would also be important to make sure that control over payment isn’t abused. i recall when donations to wikileaks were effectively blocked by public/private coordination. presumably that would be even easier if it just required public action.

> the issue is that our government in particular is incompetent

Our federal government is huge and our state governments are small. Precisely the opposite of how the founders configured it. This is part of the problem.

The states need to band together and develop a cooperative solution and then push it upwards to the federal level.

This is a lot easier than centralized planning and management of an entity the size and scope of the US. We have a lot of offshore territories and two states. This complicates things more than people care to admit.

Until you say something the government doesn't like and they decide that part of your punishment should be lack of access to payment services.

I'd prefer a constitutional mandate or guarantee that this can't happen. Without it this is a noose. A convenient noose with lots of nice properties but a noose none the less.

> Until you say something the government doesn't like and they decide that part of your punishment should be lack of access to payment services.

How much worse is that than the same thing happening when you do something a private company doesn't like?

And how much different is that than what the Federal government could already do? If the government says you're a terrorist, you're not accessing any banking.

> when you do something a private company doesn't like?

Well, it's completely different, because ostensibly I can switch to another private company. Is there an option, ever, for me to just change which government I subscribe to?

> If the government says you're a terrorist, you're not accessing any banking.

In the US this can only be true for foreign citizens. Broad classes of assets and liquidity are well protected for US citizens unless you end up in the unusual situation where they sue the money itself. If you have cash in your hand nothing can stop you from spending it.

Thank you for introducing political relativism into this conversation, although, I'm not sure it's advanced anything in particular.

> In the US this can only be true for foreign citizens. Broad classes of assets and liquidity are well protected for US citizens unless you end up in the unusual situation where they sue the money itself. If you have cash in your hand nothing can stop you from spending it.

Why would this be any different if it was the government running payment services rather than private entities? You haven’t explained why having those middlemen protects you from the same authority that makes up and enforces the rules anyway.

As opposed to Visa/MC deciding that? At least I can vote for the government...

And its not a far-fetched example as both VISA/MC actually have a history of effectively banning legitimate businesses for no particular reason.

Why is it that apps in the US are not as (overtly) commercialized or gamified (like Temu) as some of their chinese-counterparts? Is american culture just less tolerant of it? You would think there is more profit to be made by doing so which would be very capitalistic in a sense.

Because we have a Northern European streak in our heritage that is heavily against all that flashy casino style crud

> Is american culture just less tolerant of it?

Yes I think so. These flashy gamified things are considered kitsch. Designers here prefer lots of white space.

That's only controversial in the USA I guess. Here in France we know for a fact that government-run services are better than privately owned ones.

That seems like a very broad statement. Citation?

Says the national from a country that’s had at least 12 different government orders in its time, more than any other G20.

You really like government, you just can’t figure out what it ought to be or how to keep it.

I'm generally a pro-capitalist but replacing your goverment 12x seems like a good thing? They're refactoring for what they want. Better than "This hundred year document that couldn't conceive of the internet or machine guns is giving us guidance on those things with a ouiji board"

As if Biden and Trump would not have been replaced at multiple points in their regimes, if the US had a mechanism for it? The trains kept running in France. Sounds like a system that is both more responsive and more stable.

Well, Pix is not free from those too... Besides being operated by the Central Bank, you still have to use your commercial bank account to send/receive money and, even though the Central Bank do require some minimum UX implementation standards, banks can still show messages offering lending services before you finish the transaction. So you also get banks already offer some kind of instant micro-loan even for small Pix transactions, just as you described.

At least most aren't as intrusive as Alipay, but they do exist.

Unfortunately, the incentives for bad UX and privacy violations are too great for companies to behave when given the opportunity. It’ll always be a race to the bottom if not done by the government.

In UPI (similar Indian system), govt backed system acts as a central conduit between apps, banks, payment service system. So, the user can easily switch apps/banks. This prevents any hard monopoly but ensures competition and innovations at all levels.

Hm, the problem is that a little over half of all politicians are ideologically opposed to the government running anything (the reason your comment felt "controversial", I suspect). Id hate to come to depend on it and always be one election away from it falling apart.

I can't say I have a good alternative. The co-op model works for supermarkets on an international scale, and for banks on a national scale (I am unaware of any international co-op banks). I wonder if it could work for payments.

Some services, like payment, are most convenient when done by a monopoly. It makes sense to have them blessed by the govt. They could be govt run or regulated monopolies or have the rights to operate the monopoly bid for by competing companies.

> Pix has spiced up Brazil’s fusty banking sector, but it gives the central bank a worrying amount of power

I think a largely prefer a government-run payment system than an US company monopoly.

Payment systems take huge fees. It is always good if they get back to the country and not elsewhere. Digital paying is something fundamental. Like electricity.

Brazilian Pix is free though, at least for the time being. IMO the biggest thing is not the money behind it, but the ability to track individual payments. Even that, I prefer the government to have that information, than some shady owner of a private company

PIX are free for persons. Companies may* pay for pix services. My bank (that is not a good bank) charges a fixed amount of 4 BRL (aprox 1 USD) per transaction (to send PIX. not to receive) PIX in "maquininhas" may cost ~1% to the seller.

* may: banks are allowed to charge.

Which is way cheaper than credit/debit card charges from Visa and Mastercard.

And there's no surprise fraud claims.

My wife runs a small retail makeup shop on Shopify, which started before pix and those surprise false fraud claims almost killed the business.

Pix was such a game changer. It is perfect.

> 4 BRL (aprox 1 USD)

I wish. That's off by 50%

To give some reference, using stripe you pay 2-3% for credit card payments and PayPal charges you ~5% of the transaction amount. Apple store and Steam take 30%. So honestly 1% sounds like a great deal.

I think comparing Steam and to some extend Apple with payment methods, they are stores and it cost money to store apps and games and for this one I'm not 100% sure, but I read a while ago that they also pay taxes for you in the country you sell, while pure payment processing services are just a proxy to move money from one account to another. You could argue that 30% is high for that, but we aren't discussing it here.

Fast, free, and frictionless payments allow the economy to run better. That's better for the government and the people. Only corporations like Visa and Mastercard lose.

> Payment systems take huge fees

That is the monopoly cost. UPI is free for both payee and payer. Whatever it costs banks to operate it is covered by reduced cost of dealing with cash/consumer.

It's funny but also worrying how much Americans underestimate the impact a centralized government can have on people's lives. That probably means that eventually it will happen there.

A centralized – often socialist – government is the _definition_ of monopoly, you can't escape from it without risking jail or worse. No U.S. monopoly, no matter how much you hate it, will get close to this, and you think it does, you are sincerely naive at least.

There are alternatives to both inefficient government-run monopolies and US tech giant monopolies.

Even a small country like Denmark has multiple software and finance companies doing apps and software in the digital payments and banking field.

Why do you assume a government-run monopoly is inefficient?

You should try to take a train in Switzerland sometime. Its government run and I guarantee you will be mind blown over its efficiency.

You should take one in Portugal, where it’s also government run…

I made no assumption that government run organisations are necessarily efficient. The comment I responded to implied that government monopolies are inefficient by their nature, which I would argue against.

You would think, but is it in practice? In the Netherlands (and I believe many/most other countries), practically all non-cash payments are handled by either Visa or Mastercard. Technically a duopoly, but that's not a huge improvement either.

Interesting and important question.

I know MobilePay by Danske Bank is one of the most popular payment apps and can be linked directly to a Danish bank account (probably using the Danish "Dankort" payment infrastructure) without Visa/Mastercard involvement.

Most Danish POS and e-commerce solutions support MobilePay and surprisingly the biggest international POS/e-commerce providers also support MobilePay:

https://docs.adyen.com/payment-methods/mobilepay/

https://stripe.com/en-dk/payment-method/mobilepay

https://help.shopify.com/da/manual/payments/shopify-payments...

Our independence from US-based Visa/Mastercard payment infrastructure is enabled by our decades-old "Dankort" digital payment infrastructure that was initially based on magnetic strip cards. Even today most people opt for a so-called "Visa/Dankort" chip card that domestically use the Danish Dankort payment infrastructure but can internationally be used as a Visa.

I don't think it is a realistic option in the US, at least in the current climate.

There are so many powerful and influential anti/small-government that are rabidly opposing anything made by the government, and offered to the people.

The argument is always the same:

- "It will stifle innovation"

- "It is unfair to business"

- "It will make people dependent on the government"

- "It will give government more access to spy on the citizens"

and the list goes on.

For decades the American people have been told that anything the government touches will be expensive, inefficient, and lead to a more taxes. Private sector knows best, and all that.

And it is especially bad right now. You had MAGA-influencers outright rejoicing that DOGE had laid off the 18F team, spreading the gospel that free (government-run) tax tools are an abomination.

>For decades the American people have been told that anything the government touches will be expensive, inefficient, and lead to a more taxes. Private sector knows best, and all that.

Do you have some counter arguments?

Do you mean US examples or world wide examples?

Because I think the whole government are inefficient and suck is partly a self fulfilling prophecy.

Swiss railways or how Taiwan created the semiconductor industry from scratch comes to mind. Estonia E-Government. Or like the Panama canal?

Well, every municipal broadband service I've tried has been better than the laughable garbage some ISPs offer out in rural areas, where they have a monopoly.

Making an assertion without arguments does not necessitate counter arguments.

Any european who happened to have become sick once in the US can tell you about that if you will.

i have friends who have had to deal with the NHS and absolutely ridiculous (like year+) wait times for specialists.

frankly i find the american healthcare system quite good if you have good job-tied insurance. most of the problems arise because we don’t have any sort of triage for high need issues and thus get overutilization and high cost.

From personal experience, the quality of your insurance has little to do with wait times. I had best-in-biz FAANG insurance and I still had to wait months for dermatology and ENT appointments, for example.

The quality of your insurance definitely impacts wait times. HMOs are often faster and if you have medicaid you're going to look at much longer wait times for the specialists that accept it.

Months for specialists sounds bad (during covid the waits in the Bay Area got pretty bad), but for context on the NHS, they are currently targeting having more than 65% of patients served within ~5 months and they don't even make that target. Even the extremely capacity constrained Bay Area isn't close to that level of dysfunction.

> frankly i find the american healthcare system quite good if you have good job-tied insurance

Soviet union was fine too if you were an apparatchik…

Silicon Valley

i wish i was not sympathetic to those arguments - and i used to not be, but then i actually worked in the federal government. perhaps local governments can efficiently provision services but the feds are handicapped in so many different ways it would be quite challenging to untangle.

realistically, the workforce that was hired around sorting through hundreds of thousands of bureaucratic paper documents in the 70s/80s is not the same workforce that can really build new products and the feds are mostly the former.

18F was definitively the latter.

You'd be surprised how bad FAANG is, too.

Having worked in FAANG and for the Feds (on a project that was in collaboration with 18F, to boot), I respectfully disagree. You simply do not get the same calibre of technical operators or even just product operators in the federal government, full stop. Maybe they exist, but they're going to be occupying high up/plum positions because people like that are so rare.

In practice, it is software consulting companies that are doing all of the heavy lifting while the federal workers largely sit back and collect their paycheck - and talented operators are extremely rare there as well.

The Brazilian government is a *very* corrupt authoritarian oligarchy. I would take any US company over that any day.

Yet we, a developing "third-world" country, have a better functioning payment system than the US, where it takes days, or even weeks, for a wire transfer to land, and you pay a huge amount of fees for that.

Cases in point:

- To transfer money to a broker, I need to pay around $5 in transfer fees via ACH or wire

- I want to change the custody of my stock market assets from one broker to another, and it will cost me $75 to move $60 worth of shares. Meanwhile, in Brazil, this process is free in every broker.

I don’t understand this binary. The UK was able to create a near-instant bank transfer system without monopolizing in the same way. https://en.m.wikipedia.org/wiki/Faster_Payments

It costing more for instant transfers is just a regressive tax on the working poor.

I can't find the details of the UK system, but it's not "monopolized" in Brazil. Perhaps due to the fact that the infra is provided by the Central Bank, and banks choosing to implement Pix support must implement the Pix APIs in their system.

Everybody adopting an open protocol is "monopolizing" now...

> To transfer money to a broker, I need to pay around $5 in transfer fees via ACH or wire

I suggest switching to a better bank. This is unreasonable, my ACH transfers are free.

> I want to change the custody of my stock market assets from one broker to another

$75 sounds like a bargain, given the complexity it involves: https://www.bitsaboutmoney.com/archive/how-acats-transfers-w...

But anyway, I recently transferred some assets between brokers. It was free because the sending broker's fee to transfer assets out only applies when transferring the whole account. The receiving broker is happy to receive the assets, and shouldn't be charging any fee.

It's cool that "we" have a payment system, however, I would never be comfortable using something whose people in charge are those that keep us (not me particularly because I've gladly left the country almost a decade ago) in this misery.

I use Crypto for everything you've mentioned. It's instant, almost free, and alexandre(he deserves a lowercased a) can't take my money if he feels that writing his name in lowercase makes me unworthy of my civil rights.

Do you have a guide on how to use it or what services accept crypto for this purpose?

Isn’t this what FedNow is for in the US? Genuinely curious since I feel like transfers still take days. My assumption is that it’s not fully adopted yet, but my understanding is that the US is in the process of adopting this.

https://en.m.wikipedia.org/wiki/FedNow

Hum, sorry, no. It's a very corrupt liberal oligarchy.

Where did you get this idea of a 'very corrupt authoritarian oligarchy'? Brazil is not much different from any other democracy and is far less oligarchic than Trump's USA. Also, PIX is managed by our independent central bank."

There is no independent component of a country. It is very naive to claim so.

https://www.cnnbrasil.com.br/politica/por-decisao-de-moraes-...

What kind of non-authoritarian country arrests people for merely cursing at politicians on twitter?

Moreover, what kind of non-authoritarian country issues hundreds of thousands of rulings by its Supreme Court?

The Brazilian Supreme Court is an unelected entity that has complete control over the country, and firmly issues unappealable censorship arrests.

There is absolutely nothing this tyrannical in almost any western democracy, sans the UK.

This take is at best outdated and at worst disingenuous. Brazil’s democracy was threatened by an actual authoritarian with oligarchical ties during Bolsonaro’s presidency, but its institutions resisted, and he was democratically removed. Now he, his minions, the aspiring oligarchs, and the insurrectionists who attempted their own “January 6th” are facing real consequences — including jail time.

You can’t say the same about the US and its actual oligarchs.

(The corrupt part is true)

UPI from India is a much better system in my opinion since it’s decentralized and doesn’t give all the power to the central bank.

How so ? While it is P2P protocol, the network is pretty centralized.

UPI is owned by NPCI(gov entity) and runs on top of IMPS both the networks are strongly regulated by RBI the central bank.

There is fair amount of regulation and KYC/ AML requirements before an app/service gets direct access to the network and even then it can be pretty challenging. WhatsApp struggled for years to get UPI integration .

Holding money in a wallet has even more regulations than merely transferring it .

Payment networks tend to centralize by their nature. I see pix or UPI as competitor to Mastercard or VISA , they have proven it is possible to run a network far cheaper than claimed

That is such an inane opinion by the author. I wonder if he/she knows central banks can literally print money. Helping to move it around is nothing, and benefits everyone.

It's the Economist, this kinda thing is just their weird party line

As a Brazilian - Pix was a pleasant surprise, especially in that for once it feels like we're not lagging behind. It's convenient, free, instant transfers across banks. You can also easily create or programmatically generate QR codes or pastable codes with preset receivers and amounts. Great UX all around, and it quickly became the de-facto standard in how people send money.

It's technically quite impressive - it's a large scale thing and it works really well. I can think of maybe one or two times in these years where I saw downtime, and in both cases it was working again after a few minutes. The usual experience with the government building technical solutions is to have something that makes little sense, is slow, and goes down frequently with even the most predictable usage peaks, but with Pix they really seem to have nailed it.

It does feel a bit weird to have so many payments go through the government's systems, and it definitely feels like it puts them in a position of having more information than they should. There's a lot of Orwellian surveillance potential there, as any transfers are necessarily tied to both users' real identities. I don't think there's a realistic way around this, though.

Another concern is that people can expose some of their information without necessarily being aware of it. You can register e.g. emails and phone numbers as Pix "keys", and then anyone can initiate a transfer to those keys and your full name will pop up so you can confirm or cancel the transfer. I've seen some clever advice around this - "When using a carpooling app (often details are arranged off the platform using WhatsApp), put the driver's phone number on Pix. If a name comes up and it doesn't match the name or gender of the driver's profile, something is up". Obviously though there's potential for misuse and I'm sure the vast majority of people don't think about this when registering their Pix keys. You can, however, just use randomly generated uuids as keys as well, a different one for each transaction if you so desire, so this one can be a non-issue with more awareness.

Overall though it's a very convenient thing which works surprisingly well, and the downsides are theoretical at this point. IMO it's a rare case of our government nailing something.

WhatsApp is omnipresent for communication in Brazil, and WhatsApp Pay was ready before Pix, but the government blocked the launch to launch Pix first.[1] I rarely see this mentioned.

[1] https://www.reuters.com/article/technology/brazil-suspends-w...

Well I'm thanking the government for saving us from yet another Facebook monopoly thorough first mover advantage and network effects.

It's an interesting topic for study. Being the first to launch wasn't the only factor, but certainly an important one - WhatsApp Pay is available today, but it's nowhere near as popular as Pix. That's why I mentioned it. With that being said, I don't think people need "saving" from choosing to use a service. It's not certain that WhatsApp Pay would really take off as much as Pix did. I also don't think one should be thankful for having one monopoly replaced by another (in the sense of market dominance, you can still use alternative payment methods). Imagine instead of WhatsApp Pay it was WhatsApp itself. Meta is no saint, but at least messages are E2E encrypted. How would GovApp look like? As mentioned in the article, Pix has every transaction go directly through the central bank, as opposed to going through commercial banks like traditional payment methods. It may provide great usability, but also concentrates power and risk, as written in The Economist. So far there is no indication this power has been used in any malicious way, or that any significant breach occurred, but the infrastructure for that is there, and governments change. That should at least be in one's mind, if one values some kind of personal financial freedom.

Good to hear your words loyalty and patriotism, dear citizen! I will contact your local commissar and make sure he increases your social credit score by 5 points.

But we must also be realistic if we want to win against our eternal enemy Eastasia, and admit that Facebook coin would never be a monopoly because Visa, Mastercard and cash exist.

Thanks, maybe someday I will finally be promoted to Internet Shill First Class.

But seriously, it would still be a monopoly on the UPI-like segment. Visa and Mastercard charge fees that make them less attractive to some users and make it harder on some users. There are good reasons Pix replaced much of physical cash use that cards didn't. And Visa and Mastercard are also American companies. Don't they sell transaction data?

And meh, at least I can vote for my president, but not even the Facebook shareholders can vote Zuckerberg out IIRC. Although Zuck can't arrest me so I don't know.

it's kinda funny seeing us-american always baffled that we have a somewhat functional democracy in contrast to their corporatocracy

Visa and Mastercard are agents for the customer, who benefits greatly from instant and convenient transactions, fraud protection, currency conversion, and credit lines. The merchant pays them for access to these customers, and I have to say that the fees are small for what an amazing service these networks provide. I don't think neither their fees nor their profits are outrageous.

While Pix is a very impressive system, they offer no benefit to the customer over credit/debit cards. Only benefits to the merchants. For inter-personal transactions it is great, and for micro businesses. But as soon as your business grows beyond that, you will want to accept card payments.

If Visa and Mastercard sell transaction data, can you point me to where I can purchase this data? Everybody is saying this is the case, but forgive me for having doubts. Is this what you are talking about? https://usa.visa.com/solutions/visa-commercial-data-solution...

From what I understand, they are selling data in the aggregate, not individual transactions.

Literally 1984. Literally!

Meanwhile in reality: soory, out services are not available anymore because your goverment did a hecking bad thing and we don't like it. And we are taking the rest of your money btw

It's a question of national security not to let Meta eat that cake, and Brasil made the right choice.

Tangentially related, I've heard talk of EU alternative to VISA and Mastercard, which I also believe is the right direction.

These systems are not a direct alternative to Visa/Mastercard. They offer no credit and give no fraud protection and no way to revert transactions (ie you can never get your money back once you send it).

Although they can replace a lot (most?) of existing transactions that are currently done through credit cards, there is still a place for them.

WhatsApp Pay is available today in Brazil. The official reason for blocking the launch was missing paperwork, but word on the street at the time was that it was to favor Pix. This is all mentioned in the Retuers article. The reasons for favoring Pix are left for one to speculate. You say national security, the other says financial surveillance and control over the population. Time will tell.

I'd much rather let the Central Bank handle my instant payments, than Meta.

So do most Brazilians, as today that choice is available. It's interesting how being the first to launch contributed to that preference, regardless of the widespread usage of WhatsApp. There are other interesting factors to consider. For example, a lot of people had WhatsApp but no bank account. As mentioned in The Economist's article there have been changes to the banking sector brought by Pix as well. Anyway, an interesting case study, and that's why I mentioned it.

Why? Your own government can do a whole lot more to you than a foreign corporation.

Well, I can vote so that the thing my government does to me is something I want.

The foreign corporation will always be exclusively interested in doing things to me that generate revenue for them.

> Well, I can vote so that the thing my government does to me is something I want.

You better hope that your interests closely align with those of millions of your compatriots.

And that no one with political power has a personal vendetta against you.

>You better hope that your interests closely align with those of millions of your compatriots.

corporation NEVER has my interests in mind, so coordinating millions is easier

>And that no one with political power has a personal vendetta against you.

same argument can be used with corporations

Those points are true, but a private corporation can't take away my life, liberty, or property under the threat of violence.

> [the government can] take away my life, liberty, or property under the threat of violence.

I do not envy your life situation if this is something that you have to genuinely worry about.

Blackwater?

Financial surveillance would happen either way. It’s either from your government or to a foreign company, bundled and sold en mass.

In this case, maybe. But it's not the only option. The old payment system was a bit more private, as payments went through commercial banks and one needed a court order to access transaction history. According to The Economists' article the instant payment system in other countries adopts a similar scheme, which is more private than Brazil's, and which could have been adopted here too. Also, there exists technology today enabling private micro-transactions, such as Monero. But governments - including Brazil's - prevent exchanges to offer it. Europe is no different.[1] One may argue this prevents abuse, which may be true, but it also prevents financial privacy.

[1] https://support.kraken.com/hc/en-us/articles/support-for-mon...

With everything that Pix offers but WhatsApp Pay doesn't, I don't think WhatsApp Pay would hold a candle even if it were launched before.

Yeah, there was already alternatives before pix, like PicPay/Mercado Pago, and Pix just "killed" them (people still use to be clear, but just as a normal payment app)

Control over the population? That's some conspiracy theory.

Nothing stops the government from blocking your Pix transactions on a whim. They can just turn off your money whenever they want. They can confiscate your money any time if they want. They can do pretty much anything.

Conspiracy theory? It's cyberpunk stuff, the likes of which we see in fiction. Only it's not fiction. We're watching the whole thing unfold right before our very eyes.

I remember watching videos of people at events from many years ago. They warned us all about this stuff, explored all the possible consequences. It's pretty bleak. And now I'm living in this reality, the knowledge of the danger weighs down on me every day where I have to use the system. And people like you come here and calls us conspiracy theorists.

They could have always done it at your bank as well. Easy electronic transfer changes nothing in that regard.

They have done it before. The difference is you can withdraw your cash if you see it coming. The government's end game is to get rid of physical cash with Pix and soon Drex.

Without physical cash, your finances are one hundred percent controlled by the government. Sure, it's convenient, but you pay for that convenience with your freedom.

Yup, my comment was directed at those who want to prevent electronic money. But it’s no different than earlier banking.

I support cash and gold as well.

i hate this expansion of national security justification and securitization rhetoric - whether it is the US justifying tariffs or deportation or Brazilians justifying no fair play under the law or trying to jail presidential candidates.

> or trying to jail presidential candidates.

not trying, jailing. Soon, we will have the second jailed presidential candidate in less than 10 years. Many Brazilians do believe that this is a sign that the Justice System is working, tho.

> Tangentially related, I've heard talk of EU alternative to VISA and Mastercard, which I also believe is the right direction.

There is Wero, I guess similar to Pix as an alternative for instant payment like PayPal, but it's meant to be used with your bank account and not a lot of banks support it.

Same in India. WhatsApp wanted to use the payment system UPI but wasn't granted permission to do. Same reason I think - one app that handled all communication and all payments would have been too powerful.

WhatsApp does handle UPI though. Were they denied in the past?

WhatsApp had implemented the feature as early as 2018 but they were denied permission to launch. They were finally granted permission in 2020 … but only to onboard 1 million users. This limit was increased to 100 million in late 2022 and then removed in late 2024. (https://coingeek.com/whatsapp-pay-to-expand-upi-services-to-...).

WhatsApp currently has 600 million active users in India and has been the most popular app for a long time. If it had been granted permission in 2018 it would be the most popular UPI app now. There wouldn’t be a competitive app ecosystem like there is now.

This is presented as problematic, but I don’t think it’s a negative thing.

You wouldn’t want a foreign company with billions of dollars in their war chest in charge of your countries payment system.

Isn't that what any other payment system and most of the banks around the world are - a foreign company with billions of dollars in charge of payment system in a country.

VISA, Mastercard, HSBC, UnionPay, ICBC, Santander... Or is this all Brazilian technology?

The difference is that Meta is privacy data hoarder, not that it's a foreign company. And it's not "in charge of countries payment system", because that's pretty-much impossible, but "one of the payment systems in the country".

That's why China created UnionPay, so it wouldn't be held hostage to a large foreign corp (Visa, MC) for CC payments.

But most countries didn't have that capability. Kudos to Brazil for putting something together for domestic digital payments so as not to rely on a foreign company.

actually, foreign capital and foreign investment is good - and fair play before the law facilitates that.

securitization and anti-globalization makes us all poorer, worse off, and more prone to conflict. lawfare is an addictive drug and can lead to serious outcomes, as history in Brazil shows any number of times - like even with the current president.

WhatsApp pay wouldn’t be an investment. All money made from it, directly or indirectly, would go straight to the US

that’s exactly how investments work. you build out something or fund the building out of something and then some of the returns are repatriated to the investor.

in this case, you invest in building out a compliant and easy money transfer service. in other cases, you invest in a toll road, etc. etc.

the whole point of investment is it is a win-win

What people outside of Latin America don't realize that "they were missing some documentation" is just not true for companies of the size of Meta. They have the best lawyers in the world and I'm pretty sure they used them to prepare all the documentation for this big launch. "You're missing a document" means: we're just fucking around and not letting you in.

Good!

The president of the Brazilian Central Bank is accountable. Zuckaberg isn't.

Given the fact that the central government uses taxes to fund the creation and managements of a countries currency, it makes perfect sense that in the digital age it should also be funding the infrastructure to send digital transactions with that currency. I wonder how differently the internet would have developed if microtransations were free and easy to transfer.

> Given the fact that the central government uses taxes to fund the creation and managements of a countries currency

That's not a fact, in fact it's typically the other way round, issuing a currency is generally profitable and the profits typically flow into the general government budget: https://en.wikipedia.org/wiki/Seigniorage It's managed by the central bank, though, btw, which is considered separate from the government for governance reasons.

Of course, none of that stands in the way of creating public payments infrastructure.

they do physically print the money (at some cost) . And they can easily generate revenue from a payments system, if they want to (which they will at some point, of course)

Creating digital currency can be as simple as incrementing a number or adding a ledger entry. Creating paper currency can be quite expensive. There are tens of billions of US notes in circulation.

Both are "profitable", as there is more money in the end, but governments are eating real costs to manage the physical bills.

Sweden has had a similar system for several years before PIX in Brazil. It is also integrated with the digital ID system (BankID). The main difference is that the Swedish system is ran through a private organization managed by all the major banks (and the central bank) in conjunction. So the central bank doesn't have direct access to the transaction data technically.

While the Brazilian system is only interacted directly through your bank application, the Swedish application is a separate application tied to your bank account in the backend. Given the... quality of bank apps this is a huge plus. The Swedish Swish app is MUCH easier to use because it only does one thing. My Brazilian mother does not know how to send PIX because her bank app is very confusing and the PIX option is just one of many.

The BankID system of Sweden though is even more impressive than money transactions, pretty much everything government related (including healthcare, taxes, etc) and most private institutions (bank apps, Swish, digital contract signatures) is done through the unified BankID login.

People raised concerns over privacy, but the main problem really is that since these systems cut out the middle man (Visa/Mastercard) and have no fees you also have no fraud protection which is something to keep in mind when using them. Once you send the money it is gone, the banks will not give it back to you even if you got scammed. It creates a whole sort of scam industry in both countries.

https://en.wikipedia.org/wiki/Swish_(payment)

https://en.wikipedia.org/wiki/BankID

This is the difference in Brazil. Because it's ran by the Central Bank, there are some fraud protections. For example, if you receive money by mistake, you have the option to return a transfer to the original sender. And if you don't do that almost immediately, the sender can actually sue you and get the bank to revert the transaction (once proven you've deliberately chosen to not return the money).

There are also other security features tailored for the crime aspect of Brazil (since some people argue Pix increased the number of flash robberies); you can limit how much money you can transfer via Pix during day and night time, and even request a second confirmation before the transfer actually goes through. And if you prove you've been robbed, the bank can easily revert the transaction and you can get your money back.

It is still not the same as credit cards, credit card fraud protection doesn't require any sort of legal process.

Also these kind of limits can also be put on credit (and debit) cards.

> credit card fraud protection doesn't require any sort of legal process

Credit card fraud protection uses a private-only legal process. What is the worst kind of legal process.

> the main problem really is [...] no fraud protection

It's a problem for the victims, but I don't think it's why there's a scam epidemic in Sweden - scammers don't care if you get reimbursed or not. I believe the root issue is the ease and speed of transactions - it's easy to get fooled in a moment of confusion, and before you realize what happened, the money is out of reach of the authorities - as cash, crypto or in foreign accounts.

I work in Swiss banking. We also have such a system for payments. Its very popular and used by most people. I keep saying they should use it as SSO, if you can authenticate payments you damn well can authenticate login requests. It makes no sense to go to an online shop, log-in with your shop account or google, and then when you pay, authenticate the payment with TWINT. And banks could even use it to login to their e-banking. Currently literally every bank has its own 'Access' App, that is almost the same but slightly different. And to my irritatingly they don't consistently encode TWINT information the same way into the normal banking transactions.

Our developer phones have like 40 apps on them to log into different test system, its madding.

In our system the pay system is also 'half' branded so you have to download 'TWINT-<bank>' not just 'TWINT'. Making it unnecessarily confusing and its literally the same app (from a user perspective).

It seems this Bank Id is an even earlier system adopted for modern SSO use-case.

Yes BankID is the real MVP of digital systems, I heard some talks about the EU making one valid for the whole block. Hopefully it will fix all the countries.Everything is done through BankID in swedish-only institutions.

Put house on sale? bankid. Book a doctor appointment? bankid. Login to bank? Bankid. Open bank account? bankid. Sign contracts? bankid.

Heck I moved my pension (like a lot of money) to a different institution by just using BankID. Didn't have to call/email anyone, the process took 5 minutes (with about a month to actually process the transaction).

Interestingly enough Brazil also has a system to use Bank login to authenticate on government systems.

>Yes BankID is the real MVP of digital systems, I heard some talks about the EU making one valid for the whole block.

Sweden is actually in a pickle here. The dominant but private BankID doesn't satisfy all security requirements for the EU's digital identity wallet. It just isn't profitable.

The government is now working on a public government eID with a higher security standard, but many Swedes might still be left out since adoption will take some time.

This is one of many reasons why eIDs shouldn't be run by for-profits corporations, and sadly nothing would likely have happened without pressure from the EU.

Revolut is simplifying this, also in Switzerland. You checkout with the "Pay with Revolut" option. It's instant, magic and safe. You don't need to copy card details, just authorise the push notification.

I have also used it on airline websites, Aer Lingus and Wizz Air.

I live in Switzerland - TWINT has other differences as well. To start, its settlement is not immediate as Pix's. As you point out, it is also not standardised.

My suggestion would be to create an account for her with Nubank or Mercadopago, which are easier to use, faster to login than any banking apps, and have PIX more readily available after login, and then keep some money on the new account just for the kind of purchases she'd use pix for. I do that for myself just for ease of use.

In Spain we have Bizum, which is also a independent payment system run by all the local banks.

How recent is Swish adoption? Some Swedes I knew back in 2013-2018 seemed to mostly use Visa/MC at home.

Literally everyone uses Swish in my experience. Even idiotic criminals.

We "had" to get swish (and a debit card..) for our 12 yo daughter because cash is just not very usable here. Although the CC is still used more than swish, but for transfers between persons, or smaller companies swish is very common.

>have no fees

Both Swish and BankID have fees. After all, they're run by for-profit corporations.

Those apps also reduce competition in the banking sector since they're controlled by a few banks which generally have very high fees on their other services.

What's even worse, since BankID is private, there's no individual right to get it, and I've personally experienced banks abusing their oligopoly (buy this extra service or you won't get BankID from us).

The Swedish situation is a nightmare which nobody should try to emulate. Fortunately, the Swedish government has finally announced plans to introduce a public government eID, although 20 years too late.

I have never heard a single person complaining about BankID really. The only downside is the huge risks, especially for older people. We basically took control of an elderly family members bankid to avoid them being scammed.

This is something they really need to work on, just add an optional extra layer or cool-down, to slow everything down. You dont necessarily HAVE to have your transactions be immediate, waiting a few days would have been fine in our cases.

> I have never heard a single person complaining about BankID really.

You haven't met any foreign people then, BankID is a common complaint among international students. I've moved to Sweden recently for university and getting BankID was/is a nightmare. It requires you go get a bank account (which I don't want nor need, and has yearly fees), and since the ID card we get from Skatteverket does not have NFC, we need to go to the bank to setup it on a new phone every time (at least on SEB). And getting a bank account is not a simple process either, it took me like 3 months doing paperwork (and had to mail it physically, they don't do in-person appoitments for this), and I'm an EU citizen. Obviously for Swish you'd need a Swedish bank account, but my point is that you should be able to get a digital eID from the government without any other requirements (like I got my physical ID card from Skatteverket).

> What's even worse, since BankID is private, there's no individual right to get it

Nothing stops people from making it a right.

Brazilians have that right. Everyone can get a free checking account with transfers and Pix at every bank. They still try to sell us "service packages" but the idea of paying a fractional reserve bank any amount of money is just stupid if not abusive. They should be paying us for the privilege of having our money deposited into their reserves, not the other way around.

i mean, the bank can be a fraud protection, inter for example ask for a monthly payment for security, not sure how good tho

As a foreigner that visited Brazil for some weeks, I found the ubiquity of the PIX payment system to be a handicap for tourists visiting the country.

PIX is only for locals as you need to register with a CPF (Brazil ID number which is hard and tedious to get as a tourist). I ran into many scenarios where the only option was to pay with PIX and the staff aren't used to tourists and look at you funny when you explain you can't use PIX.

Also beyond PIX, if you try to book buses, planes, or take out a gym membership, while you're within the country, 99% of the time it's shockingly impossible to pay without a CPF, even by credit and debit card. I've even seen this for paying the laundry machine.

I'm sure the PIX system is great for Brazilians, and it was helpful having a local friend to make payments on my behalf, but Brazil really lives in a bubble where it seems a side-effect of their system is making things actively very hard for visitors to operate within the country.

Sounds similar to China / WeChat situation, from what I've read previously

It's now quite trivial to connect a foreign credit/debit card to Wepay, and it worked flawlessly on a recent trip. (This was very much not the case only a few years ago.)

It might have worked for you but it's still not trivial. There's many hoops to jump through still like random ID verifications, many banks not being supported to be linked, account locks that can only be unblocked by having a WeChat contact vouch for you etc.

This was the case when I jumped through those hoops in 2019, but it's much more straightforward now. Passport, phone number (doesn't have to Chinese) plus credit/debit card unlocks up to RMB 50,000/mo, with no fees for transactions under RMB 200.

https://www.china-briefing.com/news/wechat-enables-foreigner...

That article is from 2023, things changed a lot in the past years. I just clicked on "Top up balance" (while being located in China) and it says "Please add a debit card issued by a Chinese Mainland bank to use the top-up function".

If you have a foreign credit card, there's no need to maintain a balance at all, transactions are passed through directly.

And yes, of course there are limits on what you can do as a visitor, but for normal touristy stuff it's quite sufficient.

> many scenarios where the only option was to pay with PIX

I guess you want to say "only option _beyond cash_ was Pix". Most places should accept Passport ID to replace CPF. But if you found hard to pay using credit cards, that has nothing to do with Pix...

You mean online right? Credit/debit card payment gateways are a little cumbersome for foreigners not only because they are a small amount of customers, but also because it opens a window for card fraud, which in Brazil, the online stores have to paid for it (as it is a non-physical credit card use).

Apparently Wise had a PIX functionality here in Brazil, but it seems that they removed it for some reason.

https://googlethatforyou.com?q=https%3A%2F%2Foffbeatbrazilad...

Sometimes there's no point in having market solutions. You need one thing that works for everyone and is free. It's cheaper and easier this way.

The worst is a market facade for a government service. Examples in the US:

- Weather apps: various governments do the (very expensive) computing and provide the data for free. Private companies insert adds, or charge you. I use Yr, which is run by Norway and has no adds or fees. They are just sourcing public data [1].

- Taxes: the government does all the bookkeeping and enforcement, tax prep industry copies and pastes numbers into forms it lobbies to obfuscate.

[1]: https://hjelp.yr.no/hc/en-us/articles/360004008874-Weather-f...

Another variant is the "playing at shops" privatization, such as seen in the UK railway system. Lots of different, fragmented entities, none of which naturally corresponds to a train service as a whole, obfuscating where the money goes (it's the train landlords or ROSCOs).

They did the same to Norwegian rail. In fact, one of the main companies that got involved in the enshittification of Norwegain rail was British Go-Ahead Group.

We had the same in The Netherlands. Several weather apps that requested to share all your data with a bunch of partners, had ads, etc.

Then our national weather institute launched their own app without tracking or ads, and the existing weather apps all immediately joined up to sue them over it. Thankfully they lost the case.

https://www.rechtspraak.nl/Organisatie-en-contact/Organisati...

Same happened in germany but sadly, dwd (the national weather service) lost. They _have_ to take money if you want their weather app.

DWD offers the app for 2,49€ one time payment.

https://www.warnwetterapp.de/katversion.html

Fun fact, before Pix, every bank was trying out different digital wallet solutions. It was a pain to go to a store and realize they support Bank A's digital wallet, which, not surprisingly, doesn't interoperate with Bank's B.

I went to buy açai at a shop one day and didn't have cash. Only way I could pay was with Itau's iti, but I only had money in my PicPay account.

Pix was a godsend that saved us from the thousands of different, non-interoperable digital wallets the fintechs were creating.

https://archive.ph/pZGLb

Despite a global move towards a cashless society, 54% of Brazilians now opt for cash withdrawals.¹

2024 has seen a surprising reversal, as cash usage makes an unexpected comeback, defying predictions that the world was moving toward a cashless society. With rising cybersecurity threats, concerns over financial privacy, and economic instability, consumers and businesses are increasingly turning back to physical currency as a preferred transaction method.²

¹) https://www.riotimesonline.com/brazil-news/brazils-shift-bac...

²) https://www.adeptswipe.com/cash-makes-a-shocking-comeback-as...

I keep a few bills in my wallet, but I hardly ever carry it around.

Everybody accepts cards and Pix. Even beggars on the street use pix.

If I revert back to using public transport I will probably have a use for cash, but that's the only situation I can think of where it would make sense.

most places i visited (remote rural places like districts of > 300 people up to big cities) have a rechargeable card system where you can buy at any terminal

some buses in the surburbs of big cities only accept cards nowadays and you can recharge it online in 3 minutes (ofc if you are a citizen... brazilian goverment websites is a huge UX pile of shit; police, mail etc.)

These systems are all built to help the bus owners, not the passengers.

Usually you have to go register for a card somewhere. It's just not practical, especially if you're just visiting. I've never seen a place where you could buy a card at a newsstand for a week or something like that.

if you are visiting a city and you are exclusively using the bus, in 2 or 3 travels the card pays itself for not dealing with coins and physical money... you can literally buy them in 5 minutes, no need to have a CPF exposed or whatever [they are called TOURIST CARDS for a reason]

around Paraty -> Angra dos Reis region you can literally visit/stop in more than 25 beach spots with the buses who circulate that area

and it's really nice that it helps the bus drivers. it even saves some time on embarking, which can add up in longer routes. godspeed on a single card (state agnostic) for the entire public transportation system (metro, bus, trains) in Brazil

I believe it's more related to economic crisis and informal work (tax evasion). Brazil is very cashless for normal transactions.

Yeah there was a big thing where the government announced some new rules relating to reporting transactions to the local IRS equivalent. I believe that's the main reason for the fall in Pix usage.

It's only tax evasion if the activity results reportable income. Just assuming everyone, who does not use your favourite cashless platform, is a criminal, is bad marketing.

There is very little reason why a Business would prefer cash other than have some freedom in how it's reported. This is considering how much of a hassle and risk is involved in having large sums.

There is even less reason why a person would, most people in regular jobs get paid via bank accounts (Brazil even have a special kind with no fees for it). Now informal (non registered and non tax paying) employment is cash heavy: house cleaning, small repairs, produce vendors, etc.

I don't even think is criminal, it's kinda Business as usual in Brazil.

Money usage fell in Brazil, pix is the most used method, 37% of the workers are informal (no formal labour contract). They would mostly not be required to even report because of low income, the evasion in this case is being done by the employer, where they don't pay labour and the social security equivalent.

That second link is completely wrong about Brazil though. Not uninformed, just every time Brazil is mentioned, it says the complete opposite of the reality.

And the claim in the first article is about using cash at any time. And it's by a ridiculous small margin. So in fact it's claiming that almost half of the population doesn't use cash at all.

more than 50% of the rural brazilian population doesn't hav internet access (that's 36 million people) [0]

the central bank admin. director says physical money is still the base of brazilian transactions [1]

[1] https://exame.com/economia/dinheiro-em-especie-ainda-e-a-bas...

[0] https://www.ecommerceupdate.org/noticias/brasileiro-esta-dei...

According to Brazil's Central bank (and other sources) cash usage is 22%, there is no move whatsoever towards cash.

Source: https://www.bcb.gov.br/content/cedulasemoedas/pesquisabrasil...

I wouldn't trust this data. You realize the first link you send, is a data from DATAFOLHA, a private pollster. And the one who paid for the poll, was a ATM company (TecBan)?

Pix is still doing record of transactions, every month.

https://g1.globo.com/economia/noticia/2024/12/23/pix-bate-re...

I agree its an amazing payment method, it worked for me for most of the time. Still, we depend on bank's stability and technical availability for it to work. Once i needed to pay for something and forgot my card at home, at that same time my bank was going trough technical issues and i couldn't pay.

Despite rare reliability issues, my fear about it is that it requires a phone. Being so popular, i fear when places will refuse any other form of payments and accept only PIX, making anybody not using a phone unable to buy their products, with the common assumption that everybody uses it ("don't you guys have phones???"). You can't install banking apps on rooted phones or alternative mobile OSs (or is very very hard), so you are trapped with Android or IOs to use it.

I hope it doesn't come to that, but it seems it's going that way.

I think almost everywhere will still accept debit cards, at least until paying by Pix becomes faster.

It is interesting that I did no see in the comments the costs of using Mastercard & Visa as a reason for governments to find alternatives for their economies.

Both Visa and MC are US companies so there is where the profits go ....

From US Senate hearing : "This is classic, classic monopolistic behavior. Yet you're testimony...is you don't want any competition...I'm having a hard time finding that position defensible, let alone sympathetic...it's unbelievable the amount of money you're making."

Margin 50% ....

https://www.youtube.com/watch?v=ks3wP1nlg6U

I think more than cost; it is more a desire for sovereignty and also making everything trackable. As happened in Russia, US govt can block Mastercard/Visa from the country or can block a company like Huawei and local govt has no say in it.

I wish more of these government-baked payment systems would just use GNU Taler [1] instead of implementing their own walled gardens.

GNU Taler ensures that the paying customer is anonymous while the merchant is identified and taxable. This is great for privacy, but not very attractive for commercial companies as your revenue has to be fully based on fees instead of making extra money by selling your customers data. The Swiss National Bank showed interest in adopting it some years ago, but I haven't heard much anymore since…

[1] https://www.taler.net

> GNU Taler ensures that the paying customer is anonymous

This right here is the reason why governments won't use it. Governments want transactions to be traceable so that they can audit your taxes. I don't have any issues with that, I actually don't mind paying taxes, but I would never expect a government, no matter how progressive, to use a privacy-based protocol or solution.

It’s designed with taxes in mind. Total user cashflow is still apparent at the bank, just like if you withdrew cash. And the amounts received by vendors are visible as well. So taxable there too. That’s a big part of what’s so cool about it.

Governments all over the world generally want more surveillance, not less. Brazil in particular will never use it: anonymity is literally unconstitutional in Brazil.

There was a fun period where the brazilian government mandated the use of free and open source software in its computers. I remember lots of people who complained about the quality of OpenOffice. Microsoft managed to put an end to that at some point. After former president Dilma's impeachment, I think.

India's UPI is similar and runs at even larger scale

Reference: https://www.gonuclei.com/blog/upi-vs-pix-unpacking-the-simil...

Pix (and UPI, a related system in India with similar success) are my two go-to examples for how it makes sense for the central bank / public sector to get into the retail payment space. It baffles me that most major central banks (that are considering it at all) are considering doing so in the form of CBDCs [0]. CBDCs are like a bundle of two services, central bank money and a payment system. The central bank money part is the one that has everybody questioning its use cases, the reason why banks generally oppose it (hence making them likely to nudge their customers away from it), and it's a genuine financial stability concern that requires safety measures like holding limits [1] that complicate UX and/or the design.

The payment system is the part that imho makes complete sense, in multiple ways: more competition in a market dominated by two US networks, strategic independence wrt to a critical infrastructure, providing a public good for underbanked demographics,... I don't get why places like the ECB, Bank of England, Bank of Canada, PBC,... (the US Fed is one of the few not pushing too actively in that direction) insist on bundling the two together instead of focusing on the payment system. If you succeed there, the potential for success is massive, without needing a central bank money feature, as shown by Pix and UPI. Getting one such feature right is hard enough, I don't get why they don't just focus on that and leave the central bank money baggage by the wayside.

[0] Central Bank Digital Currency, a form of money that has similar UX to bank accounts but represents a central bank liability, as opposed to commercial bank liabilities like your usual bank account. It doesn't need deposit insurance, it's legal tender and is at the same level as physical cash economically (M0).

[1] see eg https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op326~d5c223d9b...

> most major central banks (that are considering it at all) are considering doing so in the form of CBDCs

Other than the EU and UK, which other major CB is considering CBDCs alone?

Numerically, most people I know in the space are heavily motivated by the Digital Public Infrastructure (DPI) model both India and Brazil have been using, and DPI has been a hot topic in the DevEcon space for 4 years now.

In fact, Indian and Chinese lobbyists now compete with each other across Africa for DPI related infra work (Biden admin even helped support India's evangelism of the Indian DPI model in ASEAN and Africa), and Brazil's Pix has seen significant uptake in Argentina and Uruguay.

And most regional economies like Vietnam, Pakistan, Nigeria, and South Korea have similar implantations

The big difference might be public versus private domain experience. In newer economies like BRICS and much of ASEAN, the infra and norm setting work fell onto regulators. But in more developed economies like the US, UK, or EU, similar developments could be done by the private sector.

> Other than the EU and UK, which other major CB is considering CBDCs alone?

The ones I mentioned, eg, Canada [0], China [1]. But it's really most of them [2], the US is rather the exception.

[0] https://www.bankofcanada.ca/digitaldollar/

[1] https://en.wikipedia.org/wiki/Digital_renminbi

[2] https://cbdctracker.org/

China has backed UnionPay since the mid-2000s - the backbone is similar to that for UPI and Pix.

And most of the countries on that list are either implementing their own payment infra or leveraging India, Brazil, Russia, or China's.

It doesn't hurt to have a CBDC - it gives you a seat at the table when norms and global regulations are made.

There's a difference between what you call DPI (which I called payment system) and central bank money. A CBDC is both, Pix and UPI are only DPI sans central bank money (so neither is a CBDC). My point is that you can get all of the benefits of having DPI without needing to incur any of the headaches that come with central bank money (financial stability risks, holding limits, private sector opposition,...). I'm all for DPI, I'm just questioning the bundling with central bank money.

I agree with your skepticism about CBDC, but it takes little to no effort to implement your own CBDC, and in the small chance that they did somehow take off, then you have a platform you can export to other countries.

> I'm just questioning the bundling with central bank money

In most countries excluding the US, EU, UK, and Canada, the Central Bank also sets financial regulations and provides the infra backbone for fintech, and in some cases still own commercial banks.

By having central banks attached to these projects, it helps build a testbed so private sector players can then extend on.

Most countries aren't like the US where private sector investors are open to investing in innovations, so it would fall to the Central Bank to begin testing and implementing these products.

> By having central banks attached to these projects, it helps build a testbed so private sector players can then extend on.

Again, you can get all of that without needing a CBDC, just have the central bank build and run a regular payment system. It gets substantially more complex once you make it a CBDC, making the chance of success even smaller. For what gain? You actually introduce some tangible risks for the financial system, the fact that it's regulated doesn't eliminate that. See eg [0]: "Threats to financial intermediation in steady state arise mainly in situations where the central bank balance sheet expands, and triggers adjustment mechanisms that lead to more costly or less stable funding of the banking system, while in crisis times run risk may increase." The typical way to address those risks are holding limits, which add operational complexity (you need an overflow logic, you need a draft logic if you want to enable payments greater than the holding limit), and put some limits on programmability [1].

[0] https://www.imf.org/en/Publications/WP/Issues/2024/10/11/Cen...

[1] https://ieeexplore.ieee.org/document/10628652

I'm not disagreeing with you. CBDCs are dumb from a financial standpoint.

> Again, you can get all of that without needing a CBDC

Yep. Pretty much.

> For what gain?

Because if X country is doing it, Y country should do it as well, and then export the associated infra to a less developed country. By the 2020s, it became a completion between Chinese vs Indian consultancies (ay least in Africa)

You have to remember the Cryptocurrency bubble was going strong until 2023 when the FTX scandal happened.

Hiring a team of 20-30 engineers isn't that expensive for a moonshot that makes it easier to negotiate if that moonshot somehow actually has an impact on global finance.

Of course, most moonshots fail, but it still doesn't hurt to have something back of pocket or build some infra if needed.

Hello, the things you're talking about (previous comments, not just this) are interesting career-wise. If I studied Computer Science (long-term I do not see myself programming forever) and only have internships related in that area, how would you recommend getting into this field?

> If I studied Computer Science (long-term I do not see myself programming forever) and only have internships related in that area, how would you recommend getting into this field?

Just keep studying CS. Climb up the ladder to Staff SWE, PM, or EM; and execute and lose hair from there.

As Pastuer said, "fortune favors a prepared mind". Most hot thinkers today were hetrodox a couple years ago.

You make more money remaining in tech and then switching in your late 20s to late 30s into policy. You can also make more realistic and less ideological policies that way. If you have a protonmail, let's catch up.

But tbh, the policy space sucks. It's not worth it (in DC, Beijing, London, or Delhi). If you are smart and lucky enough to break into policy but are also someone who's Mom and Dad don't have a liquid net worth below $750,000-1M in all those countries, you won't make it irrespective of country.

Class breaks all nationalistic barriers, and public school class people like you and I won't make it without luck or money (and we can make the latter in the private sector)

P.S. love your blog. Similar boat.

Thanks for your insights. I had previously interviewed with some firms in the PwC KPMG Deloitte type of category, though the work and pay don't seem to be completely worth it based on what I've read.

We'd probably need more background to help you, eg, are you currently a student? In what country? Assuming you're in the US, there are still some interesting things the Fed does wrt to payments, eg Fedwire, but getting into anything public-sector-related will be difficult at the moment. You could check out DCI at MIT Media Lab [0], they have some interesting projects in this space (eg Hamilton). If you're in a different country, most central banks are currently looking at CBDCs in some way. Many central banks also employ nationals of other countries, so you can cast a wider net than looking at just one country. In the private sector, there are several companies and/or academic groups that have helped smaller central banks set up their own CBDCs already, eg Cambodia uses Hyperledger with the help of some Japanese groups [1]. Word is that Polygon is also active in that space, but I don't have any references otomh. Larger countries will do a lot of development in-house. They will likely get outside help from the likes of Accenture or IBM. These could be good destinations themselves, but only if you're happy to be be working on something else most likely.

[0] https://dci.mit.edu/ [1] https://onlinelibrary.wiley.com/doi/10.1111/aepr.12464

Same with India's UPI https://www.npci.org.in/what-we-do/upi/upi-ecosystem-statist...

Tiger Global, Seqouia, and Khosla Ventures invested in a lot of Brazilian fintech and neobank startups in the early/mid 2010s the same way they did in Indian fintech and what became IndiaStack in the early 2010s, and China's equivalent in the late 2000s.

YC has also been very active in the space in both markets by the late 2010s.

A lot of the work around Pix is largely thanks to the fact that neobanks like Nubank have become very competitive in the Brazilian market, and helped set higher consumer and business expectations for transaction processing and management.

VC investments are for private solutions to build likes of Alipay in India. These are govt. initiatives to ensure no one party gets monopoly on core infrastructure of the nation.

The EU would do well to study Pix and it's rollout as it seeks to replace US payments systems across the bloc:

https://www.businesstoday.in/world/us/story/march-to-indepen...

Italy is considering implementing the mechanism https://www.bloomberg.com/news/articles/2024-02-27/brazil-ta...

It's surprising how far Brazil has come in terms of financial transactions. Truly something amazing.

It's also unsurprising to see outlets like The Economist somewhat criticise this, along with fintech corporations, because the government is offering a free and high quality alternative to something that companies would have done exactly the same but for money.

A fun fact, one of the biggest PIX players is also the company that acquired Cognitec¹, the company behind Clojure and Datomic. Until not long ago, Rich Hickey was part of the staff².

1. https://building.nubank.com.br/pt-br/nubank-acquires-us-comp...

2. https://building.nubank.com.br/clojures-journey-at-nubank-a-...

Ahhh this is what I was waiting to see mention of, figured "nubank has to be in here somewhere"

I'm a Brazilian. Everything here can be paid through pix. It's very convenient, fast reliable and, for a country like ours where walking on the streets with money is a risk, safe.

There's only one reason I don't use it: there's no FLOSS app (AFAIK) to use it.

Something as common as the dominant payment system should not depend on proprietary software.

> Something as common as the dominant payment system should not depend on proprietary software.

Name one dominant payment system worldwide that doesn't? Banks are proprietary, credit cards are proprietary, paypal, crypto is all proprietary.

Nearly all of cryptocurrency is fully open source and properly FOSS

> crypto is all proprietary

What?

I think a steelmanned version of their comment is that crypto apps are proprietary, which I think is mostly true. There are open source apps, but most of the big ones are all proprietary.

I still don't really get this. Do you mean that frent-ends have proprietary code?

Contracts on-chain can be slightly inscrutable in their bytecode format, but it's pretty uncommon for smart contracts to not be published with source code and a verifiable build.

Example, picked randomly from a transaction in a recent block: https://etherscan.io/address/0x388c818ca8b9251b393131c08a736...

Apps as in applications, contracts are not apps.

> Do you mean that front-ends have proprietary code?

Yes, sorry for not being clear, but this is what I meant. When the average person uses crypto, they're not using an open source app to buy/sell it. They'll be doing it through a propriety service, with a non-open source front-end. That service will build on top of a lot of great open source tech yes, but the final layer is very likely a private company.

I know there are open source options, but my understanding is the overwhelming majority of human trades won't be using them. My point is, refusing to use pix because there's not an open source mobile app is odd to me.

I interpreted it as: crypto is proprietary in that it is bespoke. Crypto prior to ethereum didn't even have a concept of compatibility. Forks of existing crypto could be considered proprietary with respect to each other and with respect to the original project being forked. The need for bridging to other chains/coins as well as the need for on/off-ramps also speaks to the somewhat-proprietary nature of modern cryptocurrencies.

All that said, however, crypto isn't proprietary compared to traditional banking or other payment transfer tech in the ways that make crypto, well, crypto - the lack of third party intermediaries. Anyone can develop for crypto, and the capabilities of the network can be extended by properties of crypto tokens.

Any individual crypto token or network may be open source or proprietary with respect to its development and acceptance of outside contributions, but the ecosystem as a whole is amazingly interconnected and interoperable. This seems incongruous conceptually when crypto is framed in terms of being proprietary, because crypto is constantly reinventing itself in plain view, through entirely new networks and tokens, and out of sight, through the efforts of working groups and individuals to support and maintain existing projects.

I think it's entirely fair to call crypto proprietary, and also fair to find it not to be, but there's a world of difference between how proprietary bitcoin or even ethereum is compared to something like xrp. Who controls the network and who controls development are the key differentiating features among these axes to my mind.

Crypto could potentially be the best or worst of both open and proprietary worlds, but in the best case, crypto can be open in ways that are good, and only proprietary in ways that are necessary and sufficient.

Sorry, I should've been way more clear. But this is what I was getting at. If the average person wants to buy or trade in crypto, they don't reach for an open source solution, they'll use a proprietary service. I know that's built ontop of a lot of great open source tech, but the final 'app' people interact with isn't open. The fact that pix doesn't have an open source app just strikes me as a weird reason not to use it.

You mention crypto; it's not a dominant payment system, but nor is it proprietary; there are open source wallets and the blockchains are open source.

Good were the days when you only could get robbed by what you had in your pockets.

Nowadays one goes around with a direct link to his or her entire bank account. And criminals know this in Brazil. They will rob your phone, but what they really want is to use you as an ATM. Private banks are not held accountable to the massive and rampant identity fraud in banking, where criminals will launder criminal transactions.

The private sectors does not care. Somebody who opened an account yesterday receiving R$5000,00 at 2 in the morning in the middle of the street? Nothing suspicious... This same account cashing out at an ATM the same next day? It is OK to me...

Brazilian banks need to be held accountable to 'know your customer' laws ASAP and be held liable for criminal activity undertaken on their systems.

Do you use/recommend any FOSS payment system?

I could not find any VISA foss software.

if there is any payment system that MAY be FOSS in the future, it is PIX. Not apple wallet.

Contactless pix will (has? It’s been a bit since I had to worry about payment rails) allow pix integration with Apple Wallet.

> there's no FLOSS app (AFAIK) to use it.

Does this mean that you also don't use your bank Android/iPhone APP? So your entire financial life is handled via a browser?

The money is, of course, not open source, so there will never be any FLOSS app for it.

> There's only one reason I don't use it: there's no FLOSS app (AFAIK) to use it.

And there will never be one. Not too long ago I actually gave this a try. Tried to coordinate with my bank's managers and everything. I didn't even intend to publish the result, I just didn't want to use the bank's shitty apps anymore. Turns out that in order to touch the banking system you need an actual company with special permission from the central bank.

> Something as common as the dominant payment system should not depend on proprietary software.

Cryptocurrency is the only way to make that a reality. The sooner people accept this, the better.

See relevant regulation for the Pix payment system and protocols:

https://www.bcb.gov.br/estabilidadefinanceira/pix?modalAbert... (Brazilian Portuguese)

See also relevant regulation for the instant payment system (SPI):

https://www.bcb.gov.br/estabilidadefinanceira/sistemapagamen... (Brazilian Portuguese)

We have a saying in Brazil that absolutely no part of our government works, except for our IRS. Pix is such a huge win for them. Brazil has a huge informal/illegal economy that employs more people than those who are lawfully employed (40M vs 39M). We have an effective tax plus legal compliance rate of around 60%, that really stifles down anyone attempting to open a legit business in an already harsh environment. Pix has not yet been used to crack down on the informal sector, but with sufficient motivation and some data analysis, it absolutely can be.

>no part of our government works

after learning a bit about other countries, i would argue that we are better than most, we just compare ourselves with first world european countries, but even when comparing with USA we are fine in a lot of fronts

> Pix has not yet been used to crack down on the informal sector, but with sufficient motivation and some data analysis, it absolutely can be

It will. Every single Pix transaction is reported to the tax authorities. It's only a matter of time.

Pix is super interesting. I have two questions to which Google wasn't able to provide quick answers:

1. Is there an easy way for a US resident to sign up for a Pix-enabled account (e.g. at a Brazilian bank?)

2. Can Pix be used easily for online payments?

If both are true, it seems like it could be used as a drop-in replacement to crypto for small-value transactions which are currently infeasible in the US due to transaction overhead and fees.

1. Yes and No. I assume Wise or another will offer this at some point with better conditions. A vendor called recarga pay offer this already but charges 4% on transactions. 2. yes, and it is used a lot.

My info is several years out of date so take with a grain of salt. Pix is a phenomenal in country payment system. One of a couple of the best next gen payment rails.

But its design is very much hard to work with for international transactions. It has some risk rules and design choices that make this true. I believe this is intentional as Brazil wants to maintain pretty conservative currency controls.

But! Similar things could have been said about pix and online shopping rails. It wasn’t great for that as it wasn’t the primary use case. And that is changing fast so maybe the international use case will improve.

UPI in India for instance does international work well in a similar conservative currency environment.

1. I'm not sure but I'm gonna guess no. Aren't Americans notoriously hard to offer banking services to due to anti-money laundering regulations?

2. Yes, it's quite easy

Wasn't the Fed going to launch their own take on UPI with FedNow?

America via FATCA requires foreign banks to snitch out all US persons, without any warrant or accusation of crime, to the American IRS, either directly or through exchange agreement for same information through their reporting to the foreign government.

The requirements are fairly simple, but the liability is extreme so that most banks across the world generally are loathe to do this unless you have some kind of resident visa and professional+ income or a large net worth.

If the foreign (Brazilian) bank fails to do so then US cuts off their access to USD.

As a practical matter casual offshore banking for middle class or lower Americans is closed off, the message broadcast loud and clear from the government is they would prefer you to use crypto as a substitute.

I remember when I was creating my first bank account, I had to sign under a lot of papers stating that I am not an American citizen and that I'm not lying because of this.

1. It is possible (Try PicPay), it is not easy, as you need to provide documents that can only be obtained through Brazilian bureaucracy.

On #1, Bank of America operates in Brazil so maybe they offer it.

Banco Rendimento, maybe.

Before PIX there was TED which worked normal but you usually had to wait up to 3 hours to clear the transfer. Now because of the offload caused by PIX every single transfer you make through TED takes up to 10 minutes, usually 2, but noone cares. The look of happiness people have when they scan qr-code is the same of that kid that just got an ice cream. The reason why Pix was adopted so rapidly, and is so omnipresent, is because of ease of use. You scan the QR-code and that's it, transaction completed. Nobody mentioned that half of users is unable to figure out how to get started with pix, that is register keys, so they ask some techie parents, friends or go to the financial institution to get them started. Before most people that were inept to type in few necessary numbers to complete a transfer from one bank to the other, now switched to Pix and all they have to do is give the phone number or tax ID and are ready to receive money or scan qr-code to sent it out.

Because of that there is a total inclusion and also utter surveillance. So now in Brazil there are 2 problems, 60-80% of financial transactions are processed by the government and to add to the damage the entire economy is run on one point of failure which is WhatsApp. If at the same time, 2 of them would stopped, let's say for 3 weeks or maybe less, entire COUNTRY would do down the drain.

All the alternatives are fading away, lots of people don't even know how to change a ringtone on the phone but know how to do everything through WhatsApp. Try to ask, not even demand, in random business to provide you with alternatives for contact, you'd get that look saying GTFOOH. If pix would stopped, people would not go to atm to withdraw money, they'd wait until it'd come back online. When WhatsApp stops for few hours it feels like Sunday morning before the picnic.

Government+meta=success story of Brazil

> If at the same time, 2 of them would stopped, let's say for 3 weeks or maybe less, entire COUNTRY would do down the drain.

In less than a week most of the country would already have migrated to a new messaging platform.

150 million users migrating to what? What messaging platform has this capacity of absorption, taking that many signups at once?

I won't include Messenger and Instagram as they are from meta so Telegram, Google Chat, TikTok, Snapchat and many more.

So just like that every single user will just switch to some other app and in a weeks time, and everything will just resume from where it was left off? Maybe you just overestimate a little average user's capacity to do just that. Well I hope I live to see it.

If whatsapp is down, people will find another way to communicate, there is nothing inherent to whatsapp that can't be found somewhere else. I wish to see it too.

This is were many central banks have failed. It is the job of the central bank to ensure payments can be made by everyone and to stabilize the currency.

As payments have shifted from cash to digital this control has shifted to private sometimes foreign entities with their own view of what payments are permitted and which aren't.

Brazil was in constant economic chaos in the 80s and 90s, so the banking system invested a lot in automation and communications.

I actually think it took too long for Pix to be invented. The piping was all there. Somebody just had to have the idea.

Even in the 80s you could easily transfer from any bank to any other bank.

Well, not just the idea. The technical feats supporting Pix are actually amazing; it's a whole separate payments system that settles almost immediately, 24/7.

All the way back in 1995, brazilian bank Bradesco launched internet banking software for the Sega Mega Drive. I wonder if it was the first banking app.

https://segaretro.org/TeleBradesco_Resid%C3%AAncia

Wow, I never heard of that. That is so interesting. In retrospect, it's a great platform, because there's no risk of malware.

Pix has really spurred up small local businesses. It's so much easier to buy digitally from local stores now, or even just a person starting up a business because it required no setup, no fees or anything.

If I need to buy a gift for someone from a store at the mall, for example, I just text them, they send me pictures with the options, I pay instantly via pix and they send the product through local delivery. The whole thing takes 5 minutes of my time and the purchase shows up on my door in 30 minutes. I saved on time, gas and parking, and meanwhile the store made a sale through a local employee instead of me buying online from their national franchise for example (if it's a franchise of course). Win win for everyone.

Do you have numbers showing that causation or at least a correlation?

It is something like Polish Blik / Chinese WeChat payment system, I understand?

yes! Nice to know that polish also have one!

Not to mention that soon, it will be able to pay in installments using Pix, that’s called Pix Parcelado.

In '98 I rigged something like Pix using IRC bots and a cron job on a Solaris box. Worked beautifully until daylight saving time, then everybody got paid twice.

> Pix has spiced up Brazil’s fusty banking sector, but it gives the central bank a worrying amount of power

Economist what you think central bank does exactly that this is somehow too far?

Theortically it would now be possible to implement a similar service in the US using FedNow: https://en.wikipedia.org/wiki/FedNow

Of course in practice it is a chicken-egg situation. Few people will use it over established credit based systems unless there are other incentives.

Credit card companies, including PayPal & Co, are essentially rent seeking: They are middle men that technologically aren't needed anymore for instant cashless payments, but they still exist because they can extract enormous amounts of profits via fees. But countries like Brazil and India show that they can be replaced with free or almost free systems based on instant bank transfers.

It's true that credit cards still have the use case of providing a "chargeback" service. But this isn't possible with ordinary cash either. Moreover, most people likely buy online from trustworthy shops like Amazon, so this isn't often a problem in practice. In expectation people spend way more money on credit card fees than they ever save with chargeback. Chargeback is like an overly expensive insurance that hardly anybody needs.

Doesn’t the US already have direct bank transfers with Zelle?

I don’t know why cashapp and Venmo took off but Zelle stayed unknown

Zelle is not instantaneous I believe. It would be hard to buy things e.g. at a store.

Credit cards don't just offer chargeback capabilities. They offer pro-active fraud protection. They alert you for all kinds of threats, data breaches, double-charges, etc. They will sometimes lock your card and not let a payment go through, if it is suspicious, unless you perform extra confirmation via email/text/push. They offer virtual cards that you can activate or deactivate with any given vendor, to improve your privacy, security, and control.

Having your card stolen, either physically or virtually, becomes much less scary.

When used responsibly, with rewards programs, the numerous benefits over cash make sense even in the unusual case where cash payments get a discount.

Zelle and debit cards have similar kinds of protections that make it safer than cash, and there's an audit trail. Though, it is more dangerous than credit cards.

And, obviously, credit cards let you borrow money which provides flexibility to allow payments even if your paycheck hasn't yet arrived. And occasionally, going into debt intentionally can be wise, when making an investment.

Government programs could offer these kinds of features, but betting on long-term competence, customer service, and innovation in the public sector is a losing proposition.

Having both public and private options works as an intermediate approach.

But, particularly for lending, the process of determining credit-worthiness is not a government specialty, and making it subject to the political process seems like a losing proposition for taxpayers.

Payments are a more valid area for government involvement, but even then, I'm not sure what it could offer that Zelle doesn't.

> Credit cards don't just offer chargeback capabilities. They offer pro-active fraud protection. They alert you for all kinds of threats, data breaches, double-charges, etc. They will sometimes lock your card and not let a payment go through, if it is suspicious, unless you perform extra confirmation via email/text/push. They offer virtual cards that you can activate or deactivate with any given vendor, to improve your privacy, security, and control.

> Having your card stolen, either physically or virtually, becomes much less scary.

I assume Pix and UPI (India) offer indirect fraud protection by keeping payment records. At least in Brazil and India, fraud does not seem to be so bad as to require the regular use of credit cards.

> When used responsibly, with rewards programs, the numerous benefits over cash make sense even in the unusual case where cash payments get a discount.

Nobody was talking about cash. Neither Pix nor UPI nor FedNow are cash. Cash = coins and bills.

> And, obviously, credit cards let you borrow money which provides flexibility to allow payments even if your paycheck hasn't yet arrived. And occasionally, going into debt intentionally can be wise, when making an investment.

That's balanced by the fact that it can also be highly unwise. Moreover, for most payments, borrowing money is simply unnecessary.

> Zelle and debit cards have similar kinds of protections that make it safer than cash, and there's an audit trail. Though, it is more dangerous than credit cards.

Again, cash is irrelevant here. Moreover, any advantage of instant payment systems with fees hold only insofar they (the advantages) more than outweigh the cost of the fees. The expected value has to be positive compared to UPI & Co. Which seems unlikely.

Both central bank and the individual institutions deal with fraud in Pix

Can we please have one post regarding a payment system (which works well by most accounts) not be taken over by crypto shills and skeptics whatabouting everything? I've had enough in the past 5 years and I hope it stops soon.

Most people are simple, they want to pay, and get paid, in their local currency. There's a homegrown software which enables them to easily do just that. That's a great technological and social achievement, it would be great if we could discuss that, and not crypto, which is not the main subject here.

Pix is amazing, really. The technical side is incredible—I remember reading or watching some really good content about the architecture, but I can’t recall exactly where and haven’t been able to find it again. All payments have to be completed in under 100ms, which is impressive considering how resilient the infrastructure needs to be to handle thousands of transactions per second.

I once looked at the requirements to be able to handle all the debit/credit transactions in the US, and you can do that on _one_ mid-range server easily. With regular PostgreSQL, no need for anything exotic.

Of course, the real deployment will need redundancy, failover, multiple levels of audit records, etc.

But still, modern computers are _powerful_.

Yeah, probably. What impresses me the most is the resilience — there’s been downtime only a handful of times.

The long game pattern and cycle is obvious for those with the vision to see beyond the horizon. Politics obviously has a foundation in the choice of countries to control and operate their own payments systems given the value of the data and the social connections it reveals, aka national security. All security starts at the foundation and without financial security one is indebted and controlled by another. As the world enters a new cycle around those changing patterns the basis of the control they seek is founded in individual continuity without exterior influence by their adversaries. This can be seen today with the financial controls that can greatly impact an entire country filled with individuals that have no association with the reasoning of why the restriction was placed to begin with. We have many options today for instant cross border payments and as more and more countries move to own and operate their own payment platforms so too will those cross border payments methods grow in adoption foregoing an adversaries oversight and control.

I speak from direct experience in these words as the architect and founder of multiple acquired payment systems over the decades because this past December I was contacted by an African country seeking to build, own, and operate their own payment platform backed by their energy reserves. The concerns and threats around a country's monetary system are real and in time we will see more and more countries taking up this initiative to cut out the middlemen.

As a bonus over and above countries moving in this direction we can also see businesses doing the exact same thing over the last decade. Thee who controls the money also has induced influence over the users of that money as we see this more and more through 'progress'. Feel free to replace the word "money" with the word "data" in my previous statement as well.

Stay Healthy!

This like a public-run PayPal alternative. Other countries have moved beyond this, Saudi Arabia for example created Mada, it's alternative for visa and mastercard. They take close to nothing on transactions, and that's how the government could enforce card payments everywhere.

And the cards are hybrids, they support both visa (or mastercard) and mada.

None of these systems is global yet. We still have to get a physical card with a magnet, then enter the number of this card and its date of issue and another 3 digit number to the google wallet in order to pay with our phone . And now when i buy a sex toy, everyone including a girl in VISA, my bank, google , my tax service, they all have to know.

Saying this as a user but especially as a central banker and financial economist: Pix is truly amazing, and in fact an inspiration for many other countries. Beyond the payment sphere, we are only now beginning to scratch the surface on the effects Pix (and fast payment methods in general) can have on the economy.

The government already spends money administering the original payment system of cash and coins. I don't see why electronic payments shouldn't also be administered by the government. Letting visa handle electronic payments has turned them into a private tax collector.

My Brazilian wife always complains about how bad our American banks and money transfer mechanisms are.

I wonder will the SEPA instant work like this.

Yes, I believe that is the goal: https://www.ecb.europa.eu/paym/integration/retail/instant_pa...

But I think adoption is slow because everyone in the EU already has credit cards and fees are not paid by consumers.

Fees are always paid by consumers in one way or another...

That said the EEA capped interchange with the explicit goal of making these fees painless to business owners, i.e. similar to the actual cost of handling cash, and we have PSPs charging as little as 0.5~0.7%.

While adoption is indeed slower than in developing countries since people are used to card payments (rather debit than credit by the way), the popularity of mobile wallets such as Swish, Vipps, BLIK, ... is actually pretty significant in a good number of countries, and at the same time, an increasing portion of the population uses Apple/Google/Samsung/... Pay and doesn't care about the physical card anymore. Given that the EU has forced Apple to open up its NFC payment feature, we can perfectly imagine a pan-European federated payment scheme take off in the near future, using EPI/Wero in the Eurozone and interoperable local players outside.

Isn't SEPA instant kinda mandatory by the end of this year? (it mustn't cost more than regular transfers)

correct, in Q4

In the first half of 2024 SEPA Instant CT accounted for 15% of the total number of credit transfer transactions processed by euro area retail payment systems: https://www.ecb.europa.eu/press/stats/paysec/html/ecb.pis202...

With the harmonisation and almost free nature of ECB TIPS, becoming mandatory for all European payment service providers by the end of 2025, that figure will keep growing: https://www.ecb.europa.eu/press/intro/events/shared/pdf/fs22...

Privacy conscious people: we can still use your preferred private super secretive way to pay for important stuff, and use PIX for a Coca Cola. One thing doesn’t stop the other.

Oh it absolutely does!

"Which one's the donation to the rebels?"

"The Monero, obvously..."

So this sounds just like PayID in Australia or what was payM in the UK (which got shut down a couple of years ago due to lack of use), minus the QR code generation part.

It's used between private people to make it easier to send money to one another without having to type in bank account details, but never really used to pay businesses (except under the table).

How come this is so popular in Brasil for paying businesses vs using a card or your phone to tap and pay (which seems more convenient)?

Brazil has massive amounts of fraud so credit cards are very inconvenient, card cloning and websites leaking credit card numbers is a huge problem. Banks are super aggressive about blocking cards if they see suspicious transactions. Tap and pay is popular in Brazil as well, but only for physical transactions. For online small purchases PIX is definitely the best option.

PIX (and similar systems like Sweden's Swish/BankID), don't have fraud protection, once you send the money it is gone with no contest possible. But when you send a payment with PIX there is 0 risk your account's money will get highjacked, at most you lose your one transaction.

But PIX is also accepted in many physical places because it has smaller fees, with some stores and informal commerce not accepting cards. I used to work at an IT service provider in Brazil around 2012 and one of the projects my company did was monitoring of those card machines. They actually kept GPS information of the machines and blocked them if they were moved around. Those card machines are surprisingly expensive in Brazil (or at least they used to be).

> once you send the money it is gone with no contest possible

That's not true; PIX requires your bank to provide a way (called "MED"[1]) for you to request a reversal up to 80 (!) days after a transaction. It can only be used in case of fraud, and it may take up to 7 days for the bank to analyze the situation and deny/allow your request. If it's allowed, you'll get the money back in up to 4 days.

If the bank denies the request (i.e., if they conclude there was no fraud) you can always sue the transaction recipient; you'll have access to all necessary information since they must be registered with some financial institution to be able to receive a PIX transaction.

So it's not as easy as a credit card, but I think it's fair for a free payment service.

[1] in Portuguese: https://www.bcb.gov.br/meubc/faqs/p/o-que-e-e-como-funciona-...

Oh I didn't know that, the Swedish system doesn't have anything like that as far as I am aware. But credit card fraud reimbursements are relatively straightforward. The PIX one seems more complicated, but the chance of being defrauded on PIX transactions is much smaller as well.

as in you can't get your card cloned and then a bunch of transactions show up.

The pix revolution is for very small business: food stalls, mom and pop shops, seasonal sellers, street vendors, independent and informal professionals (plumbers, electricians, etc).

Brazil adopted banking cards very fast and I remember using them virtually everywhere in debit or credit mode as early as my first card in 2008, I never had to carry money around. But they require two things that are a problem in a Brazil sized country with a Brazil density and infra structure: cell coverage and equipment. So small towns, small shops, independent professionals, etc would not have them or even be able to use them sometimes. Even today there are lots of places with internet but not cell coverage (radio, fiberglass or other infra but no cell tower).

This was changing on its own recently, many companies launched new machines that are cheaper and allow more small vendors to accept cards (+ working over the internet). This is still worse than the free approach of pix (for normal people) and a potentially lower fee for companies. Plus it allows people to buy with something they will have on them way more than their wallet, their phones.

I was in Brazil last week and I had to use pix only a few times to pay: parking (beach lot), tire fix (very small shop on the road) and thats it, everywhere else I used my credit card. Even though they accept pix, its not that huge of a difference for traditional business as far as I can tell, the payment terminal will also facilite pix transactions.

ps. you can tap and pay with pix too! https://support.google.com/googlepay/answer/14615541

> payM in the UK (which got shut down a couple of years ago due to lack of use)

I'd never even heard of this! Certainly never seen anyone offering it. Guess it got run over by lack of state capacity during Brexit etc.

> paying businesses vs using a card or your phone to tap and pay

These schemes (izettle etc) have higher costs. The poorer the country the more significant a low-cost business TX option is.

I remember most banks having it when it first came out, I used it a couple of times to pay friends but few people knew about it.

It was pretty simple and worked well, especially compared to having to give bank account details.

That being said, I am in Australia now which has a similar system and I'd say 95% of my friends just give me the bank details instead of saying 'just use PayId with my phone number'.

All my friends just use PayID/phone number or email instead of the bank deets.

The big benefit is really Osko internally, which is what makes the payment instant (except for stupid CommBank)

I was in Mexico City recently, and boy did I hate rummaging around for cash to make payments. True, many places accept credit cards, but that seems like an unnecessary tax on the merchant (credit cards charge nearly 3% in fees).

A system like Pix (or UPI from India) would be a godsend for Mexico. However, any such system should have support for tourists (non-residents visiting the country briefly).

> it gives the central bank a worrying amount of power

Heh, only an American would say that. What a peculiar worldview.

I say that as a Brazilian. I have no idea why one would trust a central institution specially on corruption ridden Brazil.

because companies aren't corrupt somehow right

Brazil government should open Pix to tourists in South America.

I would loved to have used it in Argentina & Brazil.

I tried to find a way to use Pix as a tourist (I'm from New Zealand). It would have been really super handy in Argentina tourist destinations (lots of Brazilian tourists so Pix accepted). Argentina was so painful for transactions I ended up buying Argentine Pesos using crypto. Argentina missed out on thousands of dollars export income from me because I hated their payment bullshit so much that I just left Argentina and went to Brazil instead (with different shenanigans). Turned out I enjoyed Brazil more too (great people).

I also wanted to use crypto because it is such challenging fun to play with using it for money (versus speculating), plus I wanted to learn how to manage the risks of using crypto (so I was willing to pay spreads and risk losses; since I highly valued educating myself).

One American I met had taken thousands of USD in cash to Argentina because blue dollar exchange rate (cambio / cuevas) to gain much better ARS per USD than other ways to pay as a US tourist. More reliable too (I had a few problems paying by card which sucked).

South American governments charge expensive fees and have crappy exchange rates to withdraw their money from ATMs: foolish foolish foolish dickhead governments. I hated their greed so much I just won't return to Argentina (goodbye 10x - 100x the export income versus the gains they nicked from me). Plus ATM limits to withdrawal well below a couple of hundred NZD (or USD) so I couldn't withdraw enough cash to spend - just damn retarded - print some more ya fools. Result is I'll warn friends against travelling to some South American countries (especially Argentina). Tourists are fickle - treat them fairly and make it easy for them to spend money, or they'll visit a different country that cares about earning export income. New Zealand has heaps of tourists so I know both sides of the equation (Overseas visitor arrivals to New Zealand totalled 3.3 million in the 2024 year; with a population of 5 million).

I really really loved Brazilians - I'd return ASAP if Chilean LATAM airlines didn't dominate costs (USD1600).

We are getting a copy of Pix here in Colombia called Bre-B, it will be launched in September 2025.

Yes, now in Brazil you can hardly find anyone not using Pix. It is all digital and free. Even in Argentina and Paraguay, many local merchants are now accepting Pix.

Is there anything preventing a merchant in e.g. the US from using Pix?

It's denominated in the Brazilian real rather than USD?

With BRICS, other currencies may be integrated.

China also have a pix-like wechat Russia has a pix-like "BRICS Pay"

And those systems can be integrated.

PIX QRCode protocol already have a "currency" field, that currently only support the constant value of "BRL"

USA probably will continue to use check and printed money like the ancients do.

Yeah, in Argentina the main digital wallet is MercadoPago. Many merchants have their terminal to accept payments with credit cards/QR, and since this past summer you have the option to accept payments with Pix too. Also it goes both ways, everyone going on vacation to Brazil can pay with MercadoPago without having to install Pix.

There's a similar system here in Switzerland, called Twint. It is run by a group of banks though, and I don't know if the central bank is involved. Each bank issues its own App. It had a slow start, but suddenly got a lot of traction, and nowadays you can pay literally everywhere with it. Online shops, regular shops, restaurants, the bars in the stadium of your favorite football club. Person to person payment is also possible. You can also easily create a QR code if you set up a stand at a flea market or something like that, but it's not necessary, since all you need is the cell phone number of the recipient. Everybody with a cell phone is using it, even my grandma. It's a huge success. It works like a regular bank transfer between bank accounts. The banks get no information about what was paid with it, only the amount and from where to whom. The only downside: The banks set fees according to the market, so it's in competition with bank transfers, but also with credit cards like Visa and Master, or Paypal. It's still possible to pay very small amounts of cash like CHF 2.- or 3.- though. Recently, I had a walk with my kid and we walked past a stand where kids sold self made popcorn and cookies. They asked 1.- per piece, and they accepted Twint. I bought some things and paid by Twint to the cell phone number of the kids dad they gave me. :)

There is something similar in Poland: https://en.wikipedia.org/wiki/Blik

It is run by the banks themselves though. I like the 2 minute codes aspect of it.

Hopefully ECB’s TARGET Instant Payment Settlement (TIPS) service will enable the same widespread adoption. With a price of 0.002 euro per transaction it’s guaranteed to become the most convenient solution.

Doesn't pretty much every country in Europe already have such a service?

They are mostly based on previous generations SEPA DD and CT. Italy’s Satispay as example. ECB TIPS further improves on that.

This seems to be more akin to Wero, the German-French system to replace both debit cards and online payment platforms.

I don’t speak French but BdF presents a side by side comparison: https://www.banque-france.fr/fr/a-votre-service/particuliers...

As far as I understand SEPA ICT was developed by the Euro Payment Council. An industry body. ECB TIPS, albeit maintaining compatibility with the scheme, provides an harmonised service across the entire Eurosystem and beyond.

> entire Eurosystem and beyond

mmh, not really - banks who are connected to the Euro-Zone can use it, but it has not a "beyond-EU"-ambition.

TIPS is just one of the two clearing-mechanisms, there is also RT1 (which is operated by a private entity and launchend long before TIPS came into place, TIPS is operated by each countries national bank in coop with ECB), since some time, there is interoperability, so you can transact from TIPS-connected entities to RT1-connected entities; RT1 is much more expensive than TIPS

My understanding is EBA’s RT1 is enabled by SEPA Instant CT. Itself an industry lead initiative under ECB oversight. ECB is tiding things up with TIPS by evolving the specifications and also providing the service directly in central bank money. At a much lower price.

TIPS represented more than 50% of all TARGET number of payments at the end of 2024: https://www.ecb.europa.eu/stats/payment_statistics/large_val...

Beyond TARGET, ECB noted repeatedly the reliance on international card schemes for electronic payments and card transactions in the EU. The latest report restating that accounted for approximately 61% of euro area card transactions in 2022: https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.pr2502...

CBDCs and privacy don't necessarily need to be at odds!

Cryptography makes it possible to have both! We can have a payment system run by the government and at the same time not need to give up our privacy!

I am wondering if this payments system would be able to make society more resilient to crashes in the banking system.

e.g. banks being allowed to fail, without the payments system stopping working.

Pix is huge and so much better than anything in the world. VAI BRASIL

Governments can never do anything right! Shut it down so the private sector can complete with some crappy POS with ads and an integration with some data brokers.

Is it possible to calculate how much wealth they are saving by not having to create a profit and other kinds of free market deficiencies?

Take the average fees that Visa or MasterCard require and multiply by the volume of transactions that goes through pix i guess

Is there a tech blog of how Pix is built?

There's an OpenAPI specification in a repository [1] from the Central Bank of Brazil, which might give some insights and contains links to a lot of manuals. Information seems to be complete about the protocol, but implementations are often proprietary.

[1] https://github.com/bacen/pix-api

https://archive.ph/A6jeC

It would be great if we could have some sort of roaming to interconnect those country specific systems...

> Brazil’s fusty banking

That's precious coming from an US publication, a country where checks are still used.

Isn't the Economist based out of the UK?

Standard workflow in Brazil:

- You need to buy something from person XZ, whether an individual, small business, or huge business.

- XZ sends you an invoice (including relevant taxes).

- You pay the invoice. XZ knows you’ve paid.

- At year end you can download all your invoices, including any taxes already paid, for doing your taxes. (Brazil taxes make American taxation look simple.)

Standard workflow in America:

- “Do you want cash, mail a check, or PayPal/Venmo/Cashapp?”

- “Umm do PayPal but friends and family please… also it’s at my wife’s email that still has her maiden name”

- Zero detail on invoice (maybe a receipt printed on thermal paper or a random email) which you lose by tax time

Standard workflow in Poland for normal people:

- You buy something and pay the stated price with money, phone/card or "blik" (free cashapp).

- Your taxes are already prefilled by your employer. If you have some "tax relief" items, you add it on webpage and make some clicks to confirm. If no reliefs, you don't need to do anything.

- At year end you can download all your invoices, including any taxes already paid, for doing your taxes. (Brazil taxes make American taxation look simple.)

I disagree, although it is VERY complex the US system is much worse. At least the Brazillian one you don't need to pay for an application (TurboTax & similars) to file your taxes.

And the Receita (IRS) app has an option to pre-fill the tax declaration form, which works wonders most of the times. It requires a manual review to certify that everything is correct, but from the times I had to declare my taxes (I'm living abroad so I don't have to do it anymore), it was as easy as loading the pre-filled details and just verifying if everything was correct.

This is misleading and borderline false.

Most people don't have to do much during tax season nor keep any receipts. You download the declarations of your bank, receive one from your work. Fill them out on a free software and you're done in 15min.

Only gets somewhat complicated If you have lots of deductibles and you have to prove them, that's the same everywhere.

was it based on India's UPI? If so, this is the basis for SWIFT for BRICS?

No, also no, totally different things, brics use each country currency instead of converting it to dollar

There's a lot to discuss here. Focusing on one thing however:

> But unlike India, where UPI is run by an industry body, Pix is managed entirely by the BCB.... the BCB alone runs Pix’s infrastructure and controls the encrypted database that stores all transactions.... This concentration of power in a central bank is unusual, and has led to criticism. “Now we live in a democracy, but imagine if this existed under an autocracy and all your information was available to the government,” says the head of one prominent fintech company. He thinks citizens in richer countries would balk at the government having Pix’s level of access to all financial transactions. Also, if the system is ever hacked or breaks down, the fallout would be greater than if a single bank were attacked.

(Just looking at the privacy aspect) For something like Pix to have a chance at long term success in the US, there'd have to be unambiguous regulation absolutely prohibiting access by the government to transaction information that could be tied to a person. Preferably, it would be technically impossible to tie a transaction to a person/entity without going to the bank that facilitated the transaction and a warrant signed by a judge.

10 years down the road:

IRS: "if we could look at that, it'd be great..."

Police/FBI/NSA: "think of the children..."

etc.

Encryption

The original dream of crypto was a good one.

How does Pix deal with fraud?

“Now we live in a democracy, but imagine if this existed under an autocracy and all your information was available to the government,”

the belief that democracy is some sort of bulwark against government surveillance is mindbogglingly naive

Brazilians are the proverbial boiling frogs....

.. meanwhile, the EU has been discussing about the Digital Euro for like 5 years

Pix isn't a CBDC.

The deployment of SCT inst is mostly complete and Wero (EPI) was launched in 3 countries already. Things take a bit more time when you need to push standards and regulations to 11/27/36 countries. Overall banking and payments in the EU/EEA are pretty advanced and evolving at a decent pace given the market size and number of entities involved, the PSD is world-class.

but time is everything. Those are not consumer-facing solutions. Meanwhile everyone around me uses Revolut (a UK company)

Instant transfers and mobile wallets are very much customer facing. Revolut already supports the former and will probably add the latter at some point as it did with BLIK in Poland.

Pix ou presente?

Do not put your money into Pix because Brazil's government has become extremely authoritarian and anti democratic, including jailing political opponents.

> Do not put your money into Pix

You do not "put your money into Pix", your money is in your bank account. Pix is just a bank transfer mechanism; if you have a Brazilian bank account, you can send and receive through Pix.

Oh boy here we go, the bolsonaristas are here to claim that Bolsonaro and his cronies definitely didn't try to overthrow the current government in favor of a military dictatorship and that there's definitely not a mountain of evidence pointing in that direction. Nope, it has to be some deep state commie conspiracy of course.

It was not Bolsonaro who was put in jail, it was his political opponent.

And he got out, using the same justice system, because of the irregularities of the arrest, not sure if it's an authoritarian indicative or just the justice system being terrible slow

Putting an elected president – current or former – in prison should never happen, in my opinion.

As far as I'm aware, Pix is just a way to transfer money. You do "put money" into Pix.

Regarding the rest, I'm not following Brazilian politics that closely, but if politicians try to stop a democratic transition of power, then any functional democracy has to deal with them. I don't know how you can do that without doing things like jailing those who were involved. We can't do whatever we want and then call it political prosecution.

> You do "put money" into Pix.

I meant to say "you don't" here.

How do people pay for illicit drugs, prostitution, bribes, etc.?

This post is about how Brazil created a universal payment technology that most richer countries don't even dream to have. And a technology that works, is free, easy to use, and become part of reality of country that, despite having several tech companies, isn't exactly recognized (yet) as big player in the tech scenario.

And you keep repeating these old-fashioned stereotypes?

Huh? What stereotype? It was an honest question that I haven't heard a good answer for how black market payments will work as societies go cashless.

In the US, it seems that 3rd party systems like Venmo are lightly monitored when it comes to payments for minor crimes. But I imagine that would change when there is a single government controlled payment system with total transparency.

> It was an honest question

Sorry if I misunderstood you, but just as tip, make it clear in your question. Probably the downvotes are from people who are tired of having Brazil being associated with drugs, crime, corruption and sex while it is a giant country with so many things to offer, and with so many hard working people doing their best.

But answering: just like any other country. Cash, jewels, money laundering, etc. Pix is not a replacement (at least so far) for cash, is just a modern option. And I really question if it will be someday a full replacement. Pix is amazing, but for a daily use (in restaurants, physical stores, etc) it is still more practical to pay using cards as Pix takes a little time to grab the phone, opening the bank app, scanning the QR code, typing the PIN and hoping that the internet connection is good enough for that

There's still cash money for those things. If you ever heard about the "Operation Car Wash" bribery scandal (largest corruption case in world history), the businessmen and politicians were exchanging suitcases full of cash at a car wash.

Prostitution is legal, so you pay with Pix lol

I've worked with banking tech for almost 20 years in Brazil. The Pix system is great, but before that we already had TED which was slower but very reliable (the main downside is that it that it closes outside commercial hours for post processing). There are a lot of a lot of other things like Boleto (which are use for billing) and more recently the "Open Finance" system which allows different institutions to share customer data and even perform operations using connect accounts. It allows a customer to, for instance, check all of their balance in a single place. It allow institutions to learn more about you which can facilitate credit.

The reason? Why is a third world, poor country like Brazil so advanced on finance? While there's no single reason myself and most of the execs I've worked with tend to believe in two:

- Fraud, which is rampant in Brazil, incentivizes banks to invest a lot into modernizing their systems

- Complex financial rules, imposed by our government, required a lot of investment in systems as well

These all come from the 80s, so by now we have modern, fully digital systems in all our financial institutions, so things like pix and open finance can be easily implemented.

While "third world" isn't a modern term and you should try to avoid it, it's also not correct by any means. If we consider 1st, 2nd, and 3rd world countries to be analogous to high, medium, and low income countries, Brazil is easily a medium income country[1], and considered to be in the higher end of that bracket, for what it's worth.

[1] https://data.worldbank.org/?locations=BR-XT

> poor country like Brazil

You can say several bad things about Brazil, but it being poor is not one of them.

> The reason?

A friend that worked in banks in Brazil and Canada thinks that it may be because Brazilian banks went digital later, so it was easier to implement more modern features.

This is, banks that went digital earlier stuck with older technologies because them just worked.

In the opposite way: Japan. It was a futuristic country in the past but now they still use fax and recently abandoned floppy disks

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