PIX Garantido: The Future of Installment Payments in Brazil

Hey Payments Fanatic!

Much is said about the impact of Pix on cards in Brazil. Introduced at the end of 2020, Pix has been highly successful in gaining acceptance among retailers and consumers.

In the left graph (annual basis), we see that from the introduction of Pix (marked), the total volume curve for credit cards changed, accelerating in growth, while the same was not observed for debit cards, which show stagnation starting from 2022.

The right graph provides a more recent observation (quarterly basis), considering the total volumes of cards and also Pix in the P2B (person-to-business) mode, which is the type of transaction most comparable to card transactions.

This observation confirms a greater comparative acceleration of Pix, with a negative trend in the debit card curve. However, in the case of credit cards, growth remains steady. So far, the negative impact of Pix on cards is evident only against debit cards.

Meanwhile, The Central Bank of Brazil is working on developing the "PIX Garantido" which will enable customers to make installment payments through this payment system once it is implemented.

This feature could serve as an alternative to credit card installments, a popular method for high-value purchases. The Central Bank has not provided further details about PIX Garantido or whether interest will be charged on these transactions.

The Brazilian Federation of Banks (Febraban) explained that for PIX Garantido, customers need to have money in their checking account to make payments on the installment due dates.

In August last year, the president of the Central Bank, Roberto Campos Neto, said that PIX Garantido would offer an installment payment option to customers.

At that time, one of the proposals under discussion, which was not implemented, was the end of credit card revolving credit and the installment payment of the outstanding balance with lower interest rates. This was in line with a law passed by Congress, which limited the credit card outstanding balance effective January this year.

While working on the rules for PIX Garantido (installment payments for products and services), the Central Bank plans to launch two new modalities in October: automatic PIX and scheduled recurring PIX.

These modalities, allowing scheduled payments from customers' accounts, are similar to PIX Garantido (installments).

According to the regulation for automatic and scheduled PIX, if there are insufficient funds in the payer's account on the due date, notifications will be sent, and new attempts will be made in the following days.

Automatic PIX can be used, for example, to pay:

*Water and electricity bills

*School and college fees

*Gym memberships and condominium fees

*Loan installments

These payments can already be made via direct debit, but the Central Bank believes automatic PIX will reach more people.

With automatic PIX, companies won't need to sign a contract with each financial institution, just an agreement with one bank offering this service to businesses.

Cheers,

Marcel

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"Tap to Cash" is a new feature introduced by Apple, aimed at enhancing digital transactions. It allows users to convert their Apple device into a digital wallet that supports various payment methods, including contactless payments, making financial transactions more seamless and efficient — ultimately competing with PayPal, Square, Google Pay, and many others. It enhances the utility of Apple devices by integrating more financial services.

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?? ???????????? ????????????????????????: Allows users to make payments at physical stores using their Apple devices.

?? ????????-????-???????? ????????????????: Facilitates quick and easy money transfers between individuals.

?? ???????????? ??????????????????: Simplifies and secures online transactions by using Apple's secure payment infrastructure.

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Apple's "Tap to Cash" utilizes tokenization to secure transactions. This process ensures that actual card details are not transmitted during transactions, thereby reducing the risk of fraud.

?? ?????????? ????????????????????: When a payment method is added to Tap to Cash, a token is generated by the payment network.

?? ?????????????????????? ??????????????: During a transaction, this token, along with a cryptographic key, is used to authenticate and complete the payment.

?? ????????????????: Since tokens are useless if intercepted, this significantly enhances transaction security.

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1?? ???????????????? ????????????????: Tokenization minimizes the risk of fraud by not exposing actual card details.

2?? ??????????????????????: Simplifies the payment process, making it faster and more user-friendly.

3?? ??????????????????????: Works seamlessly with other Apple services and devices, enhancing user experience.

4?? ??????????????????????: Supports multiple payment methods and use cases, from retail to P2P transactions.

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When a user registers a payment card with Apple's Tap to Cash, a token is generated, and an MPAN is associated with this token. This MPAN is specific to the device and the merchant, adding an extra layer of security.

Apple's "Tap to Cash" feature marks a significant advancement in digital payments, offering enhanced security, convenience, and seamless integration. By leveraging tokenization (MPANs), it ensures safer transactions, making it a robust solution for both consumers and retailers.

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Source: Apple

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