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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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 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.
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.
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.
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."
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.
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.
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.
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.
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.
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?
> 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.
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).
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/
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.
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.
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).
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 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.
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.
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.
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.
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.
> 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.
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.
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.
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.
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.
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.
> 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)
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.
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.
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.
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.
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.
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 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.
> 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.
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.
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.
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.
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.
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.
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.
- 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.
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
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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).
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.
> 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)
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.
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.
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.
>>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)
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"
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]
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.
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.
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
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?
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.
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.
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.
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.
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??
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.
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.
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 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
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.
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.
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 was expecting China to be totally cashless when I went last year. While everyone accepts digital payments, almost everyone also accepts cash just fine.
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.
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.
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.
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 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.
> 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.
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.
> 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.
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.
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.
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)
> 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]).
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.
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.
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.
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.
> 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.
> 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?
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.
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.
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".
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)".
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.
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.
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.
> 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?
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.
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.
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.
> 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...
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.
>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.
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
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.
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.
> 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).
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…%
> 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 trave...
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.
>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.
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?
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).
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).
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-...
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.
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.
- 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
- 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.
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.
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.
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.
> 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.
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.
> 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.
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.
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.
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.
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
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.
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.
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.
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)
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 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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
> 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).
>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.
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.
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.
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.
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.
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.
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...
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.
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.
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.
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.
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'.
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.
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.
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.
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
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
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.
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.
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[ 2.7 ms ] story [ 364 ms ] threadYC 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.
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.
Both are "profitable", as there is more money in the end, but governments are eating real costs to manage the physical bills.
I think a largely prefer a government-run payment system than an US company monopoly.
* may: banks are allowed to charge.
Pix was such a game changer. It is perfect.
I wish. That's off by 50%
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.
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.
Even a small country like Denmark has multiple software and finance companies doing apps and software in the digital payments and banking field.
You should try to take a train in Switzerland sometime. Its government run and I guarantee you will be mind blown over its efficiency.
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.
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.
Do you have some counter arguments?
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?
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.
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.
Soviet union was fine too if you were an apparatchik…
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.
You'd be surprised how bad FAANG is, too.
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.
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.
It costing more for instant transfers is just a regressive tax on the working poor.
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.
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.
https://en.m.wikipedia.org/wiki/FedNow
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.
You can’t say the same about the US and its actual oligarchs.
(The corrupt part is true)
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
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.
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.
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-...
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.
> 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.
> 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.
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.
If you can find a place that actually accepts it! It’s certainly not as ubiquitous as the local Napas247 QR codes.
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.
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.
> 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.
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.
Let's grab some cacha or other trashy/bourgeois booze when I'm back in São Paulo! I'm am Arak kinda guy
the best source I could find is this: https://finsidersbrasil.com.br/
Until there will be a stable coin we can trust and which can be accepted by most businesses.
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 are neighboring wallets (like Belo in Argentina) that support it, and I believe tourism will drive even more integration over time.
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...
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?
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.
So there would be more safeguards
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.
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.
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're reading this, please note this comment was written in 2025)
On top of that, it will provide the said information to government agencies if asked.
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.
And if a government decides to just ignore those, it will also have no need to watch your transactions or create fake ones.
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.
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.
https://www.sharetechnote.com/html/Handbook_UMTS_RrcStateCha...
- 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.
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.
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.
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.
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.
The practicalities are very different from transferring between say Brazil and the US.
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 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 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...
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.
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.
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.
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...
...except for inflation.
Isn't paying with some phone apps the default in China? And I think transferring using phone apps has some success in Africa, too.
Except for Hong Kong, they have their own thing. I just used Google pay there.
I remember encountering that before London launched Oyster, probably inspired by it. Worked in station vending machines as well as for tickets.
Yes, and it's a small privacy leak in Pix: it shows the person's name and part of their CPF.
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.
(Googler, opinions are my own.)
- 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 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
why can't we just use qr codes with ibans in that case?
But it seems to me like banks don't really want to make bank transfers more comfortable for small transactions.
It is possible to pay using NFC now
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
- 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.
Note that it is from a bank app (Nubank), Pix itself is not an app. Other banks have similar interfaces
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.
They protect against tracking and provide anonimity. That might be valuable.
"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.
Technically a pre-paid option should be possible, but I could not find anything about something in that vein.
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.
https://blog.remitly.com/money-transfer/complete-guide-brazi...
Similarly Revolut has an announcement but I don't believe it is available yet.
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).
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)
And you can also use the bank account number, effectively replacing older bank transfer mechanisms like DOC and TED.
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)
btw, Pix is not an app, it is a service/infrastructure that can be used by any bank
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.
The bad thing is that Pix shows it will work for many, many 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
https://exame.com/economia/questionado-por-apoiador-bolsonar...
- 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 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!
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
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.
Preventing convenient payment technology only hurts the rest of us. If you want redundancy buy gold coins.
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.
There’s plenty of legal ways of exchanging cryptocurrencies for real currencies, shutting those down would be a good start.
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.
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.
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.
The transaction cost compared to most domestic systems is absurdly high.
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??
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).
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.
Until this line I forgot crypto was even competing!
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 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.)
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.
You bet. Every pix transaction is reported to the brazilian authorities.
Watching the Indian and Brazillian governements solve this problem by by building the payment networks themselves and removing the profit incentive has felt vindicating.
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.
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.
> 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.
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.
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.
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 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.
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.
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?
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.
Thats a use case 99.99999999999999999% of humanity does not care at all about.
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.
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.
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.
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.
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.
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.
Each transaction is somehow only known by sender and receiver
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.
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
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.
Similar to https://en.m.wikipedia.org/wiki/Hawala
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.
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.
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.
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?
Go ask chatgpt, it will explain it quite well.
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?
Really, it's bad form to comment on something technical where you are just miles out of your depth.
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.
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...
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".
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.
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".
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...
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)".
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".
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.
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
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
Fine keep using crypto as a store of “value” but as a way to handle day to day transactions it has failed.
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!"
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.
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.
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.
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.
Your government already has a monopoly on violence and owns your whole life.
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.
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...
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.
> 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.
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?
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.
This is true, and there's already a proposed law to ban paper money in Brazil.
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.
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.
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.
> 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.
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.
Anyway, I think I meant "unironically", in retrospect.
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).
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.
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).
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…%
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.
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.
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 trave...
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)
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.
>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.
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.
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?
Cryptocurrencies are full of scams because you can't put the money back, and some are anonymous.
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 :-(
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.
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
I do not see how this is better than cryptocurrency, which, while not fully anonymous aside from Monero, is at least decentralized.
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!
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.
- 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
- 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.
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.
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.
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.
Name one dominant payment system worldwide that doesn't? Banks are proprietary, credit cards are proprietary, paypal, crypto is all proprietary.
What?
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...
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.
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.
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.
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.
Does this mean that you also don't use your bank Android/iPhone APP? So your entire financial life is handled via a browser?
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.
[1] https://www.reuters.com/article/technology/brazil-suspends-w...
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.
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.
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.
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
Tangentially related, I've heard talk of EU alternative to VISA and Mastercard, which I also believe is the right direction.
Although they can replace a lot (most?) of existing transactions that are currently done through credit cards, there is still a place for them.
The foreign corporation will always be exclusively interested in doing things to me that generate revenue for them.
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.
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
I do not envy your life situation if this is something that you have to genuinely worry about.
[1] https://support.kraken.com/hc/en-us/articles/support-for-mon...
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.
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.
I support cash and gold as well.
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.
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.
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.
You wouldn’t want a foreign company with billions of dollars in their war chest in charge of your countries payment system.
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".
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.
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.
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
The president of the Brazilian Central Bank is accountable. Zuckaberg isn't.
- 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...
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...
https://www.warnwetterapp.de/katversion.html
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.
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.
But I think adoption is slow because everyone in the EU already has credit cards and fees are not paid by consumers.
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.
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...
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
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.
Also these kind of limits can also be put on credit (and debit) cards.
Credit card fraud protection uses a private-only legal process. What is the worst kind of legal process.
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.
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.
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).
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.
I have also used it on airline websites, Aer Lingus and Wizz Air.
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.
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.
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.
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).
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.
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.
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
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...
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.
I don’t know why cashapp and Venmo took off but Zelle stayed unknown
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.
> 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.
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)?
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).
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-...
as in you can't get your card cloned and then a bunch of transactions show up.
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
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.
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'.
The big benefit is really Osko internally, which is what makes the payment instant (except for stupid CommBank)
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.
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.
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.
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...
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.
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.)
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.
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
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.
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.
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...
Source: https://www.bcb.gov.br/content/cedulasemoedas/pesquisabrasil...
Pix is still doing record of transactions, every month.
https://g1.globo.com/economia/noticia/2024/12/23/pix-bate-re...