According to figures from the country’s Central Bank, the Brazilian instant payment system Pix finished 2021 having generated more than 8 billion transactions. This is quite an astounding result for an option that was just introduced in November 2020, and it demonstrates how popular Pix has grown in the nation.
Pix might be described as “a government-built version of Venmo,” according to Joo Pedro Thompson, founder of fintech Z1. The parallel, however, does not completely reflect the reality that Pix appeals to much more than simply technologically savvy teens repaying buddies for coffee. Otherwise, six out of ten Brazilians would not utilize it.
In a society where many people are still unbanked and queueing to pay bills is a regular occurrence, the importance of being able to pay anybody instantaneously cannot be overstated. Furthermore, Pix now offers new services, such as the ability to withdraw cash from companies.
It’s worth noting that Pix is an institutional endeavor, one of a slew of government initiatives aimed at transforming Brazil’s financial scene. “The Central Bank has done a fantastic job, and Pix is one of the most crucial structural reforms,” Brazilian venture capitalist Bruno Yoshimura told TechCrunch when we reported on Latin America’s fintech growth.
As someone who has lived in Brazil, this naturally caught my curiosity. Entrepreneurs were always grumbling about bureaucracy at the time, and their greatest desire was that institutions would just get out of the way. However, venture capitalists and entrepreneurs are now applauding the Central Bank for its efforts and the opportunity they have generated.
“Both Open Banking and Pix will level the playing field for new challenges, and we anticipate to see a lot of innovation around them,” Yoshimura added, referring to another initiative of the Central Bank.
It’s not only Pix, nor is it simply the Central Bank’s BC# agenda. Because Brazil’s Superintendence of Private Insurance (Susep) is working on open insurance plans, insurance might be the next industry to gain from legislative tailwinds.
I sought out professionals with direct experience in Latin America’s financial industry to learn more about what’s going on with laws in Brazil and how it’s hurting companies.
For more information on insurance, I reached out to Amy Cheetham, a partner at Costanoa Ventures, whose recent investments include Rio de Janeiro-based Plug, and Javier Santiso of Alma Mundi Ventures. On the startup front, I chatted with RecargaPay CEO Rodrigo Teijeiro and TruePay CEO Pedro Sônego de Oliveira.
There are several opportunities
“The Central Bank of Brazil’s open banking efforts are clearly tailwinds for fintech innovation,” Costanoa’s Amy Cheetham stated. “As customers recover ownership of their data, it makes room for new entrants into the banking ecosystem and increases competition, providing consumers with access to better, cheaper, fairer, and more secure financial goods and services.” Giving fintechs the ability to construct for previously [underserved] or unserved parts of the public is one example,” she noted.
RecargaPay is one of the firms that is taking advantage of the new legislation to grow its B2C services. “Our objective at RecargaPay is to democratize mobile payments and financial services in Brazil,” stated creator Teijeiro, “therefore open banking and Pix are the right mixes to accelerate our mission.”
Teijeiro is especially fond of Pix and its “amazing” trajectory. “In only one year, we created a massive disruption that benefited millions of Brazilians by making payments simpler, quicker, and cheaper.” “The Brazilian Central Bank deserves to be honored as the ‘fintech startup of the year’ for this,” he added, characterizing Pix’s influence on cash becoming mobile as “a big benefit for RecargaPay.”
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