In Brazil, a temporary suspension is looming for a popular payment choice – and, by extension, a disruption to trade itself.
But, beyond the fact that Brazilian lawmakers are reportedly considering a suspension of the country’s Pix instant payments system, there is one key point to consider – the vulnerabilities inherent in the instant payments ecosystem itself.
In Brazil, the Pix mobile payment system has been in place for a little over a year. In terms of scale and volume, it processes over a billion transactions each month for over 112 million users.
Read more: Rising crime in Brazil could lead to suspension of instant payments
But, amid an upsurge in financial crime, the legislation could pave the way for a suspension of those payments – at least until lawmakers remove some of the vulnerabilities.
So far, the proposed ban is said to be tied to the state of Sao Paulo, meaning the break might not be a nationwide outage.
But, if caution prevails, the ban may expand, preventing banks and other institutions from processing payments through Pix until the central bank resolves security concerns.
Any pause would likely slow down the platform’s momentum, and that momentum has been exhilarating, indeed. As Bloomberg reports, $ 89 billion passed through the network, indicating that instant payments made on mobile devices have really caught on.
âWe expected tremendous acceptance from individuals, and we knew the companies would come later,â Carlos Eduardo Brandt, Pix’s chief operating and operations officer, told the news wire. “But in terms of scale, it surprised us.”
Yet crime has increased so much that kidnapping is emerging as a method by which criminals simply take their victims to ATMs and force them to transfer the assets from their accounts through the app.
Person-to-person transfers are now a mature target – and faster payments, as they say, equate to faster fraud. Any disruption, even a short one, can hurt confidence and momentum, and this can prove to be a barrier for companies looking to boost adoption of real-time payments in Brazil.
As an example, Singapore-based global payments company Thunes recently partnered with Brazil-based international digital payments platform Bexs Banco to pursue real-time payments to Brazil.
See also: Bexs Banco-Thunes collaboration brings real-time payments to Brazil
The partnership brings increased speed and transparency to inbound transactions for Brazilian recipients via Thunes, and Pix’s over 112 million users will receive instant payments and interoperability between Brazilian banks and FinTechs.
âWe were the first payment provider in Brazil to integrate Pix technology into cross-border transactions,â said Luiz Henrique Didier Jr., CEO of Bexs, in the December announcement between the companies. âWe now operate with Thunes, which processes payments for global players across several major technologies, digital banks and international money transfer platforms. “
A slowdown in Pix instant payments could go a long way to address security concerns, but a chilling effect could be widespread.