[mzitelli]

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks.

Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US.

Actions like that may show the current direction of the US government is aligned on preserving status quo. But still, I wonder how impactful a public digital infrastructure for the dollar would be.

[thimabi]

I got in this thread with the expectation of seeing a comment like yours, so thank you for that.

I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia.

Consumers like it because it is widely available and free, companies like it doubly so, and even governments like it because it helps to combat tax evasion and fraud.

Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

[notpushkin]

> AFAIK some places already have it, like Thailand and Malaysia.

Also Vietnam (Napas247), Singapore (PayNow), Philippines (QR Ph), Japan (lots different systems), China (WeChat/Alipay, I think?), Russia (SBP), Belarus (ERIP, in a sense), and the whole of EU (SEPA transfers).

One problem is, most of them don’t really work for you if you’re a foreigner. Moreta (YC S24) is doing something in SEA, and I’ve seen another service for visitors in India, but I think exchange rates wouldn’t be too good (compared to something like Wise, maybe on par with regular banks though).

https://moretapay.com/, https://ale.sh/r/moreta (affiliate link)

https://wise.com/, https://ale.sh/r/wise (affiliate link)

[AdieuToLogic]

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

This is the entire value proposition of credit cards and is what undergirds the issuer (bank) justification for interest rates assessed. To be able to defer card-holder immediate payment for some period of time and/or to put the onus of proof-of-purchase on the merchant instead of the card holder.

The last point is non-trivial when considering debit or debit-like networks result in funds being transferred during settlement (often performed daily), thus making the customer responsible for proving they did not perform the transaction post hoc.

[55555]

I am in Thailand. Fraud is a much smaller issue because it’s a push-based system. You cannot withdrawal from someone else’s account just by knowing the number, unlike with credit cards.

[mzitelli]

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank

It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share.

I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.

[FpUser]

>" the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank"

I am not sure it is a better proposition if one looks at staggering amounts of debt caused by credit cards

[rprend]

Pix, UPI, etc are nationally silo'd and have little risk of spreading around the world. They took over their respective countries because they were government backed and mandatory.

The US has its own version of this: government backed, 24/7 instant settlement payment rails (called FedNow). It released in 2023 but adoption is slow because it's not mandatory. Banks are especially slow to support "Requests for payments", which might compete with card networks for retail purchases.

It's the banks, not Visa / Mastercard, that make the most off credit card fees. Visa / Mastercard take .1-.2%, the bank takes ~2%.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud. Irreversible payment rails are a nightmare for consumers who are used to chargebacks being built in to the payment rail, and banks are skeptical of exposing such rails to consumers because most of the time the banks are required to make good when the customer is defrauded.

[john01dav]

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

[michaelmior]

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

Rewards is another big one and the reason I personally prefer to use credit cards where possible.

[whatagreatboy]

India has UPI. China has something. It is only a good thing that this should spread everywhere.

[seanmcdirmid]

Fairly sure QR code based payment systems are pretty common outside of the western world since China popularized it. You cam even hook your credit card up to something like Alipay and get by with minimal extra fees.

[wqaatwt]

Haven’t the Eurozone and presumably many other places had this for quite some time now? Or is Pi. somehow better than SEPA?

[Imustaskforhelp]

There is UPI too in India, pix also sounds decent! Pardon me but I think pix is open source too which is nice too !

[kwanbix]

In Argentina we have Mercado Pago which is basically this.

[kyrra]

My understanding is that Pix took over because the Brazilian gov did transfer payments during covid and the (only?) way to get those payments was via Pix. So it forced everyone to start using it. And once people had more familiarity with Pix, merchants started pushing for it because it charges ACH level fees.

The chargeback system (MED) is only so-so right now, but expected to get better.

There is a lot to like about Pix, but the spec is extremely complicated and hard to implement.

[forinti]

I started using Pix, because it's the best way to do business with Chinese ecommerce sites.

You don't have to give your credit card details and refunds go straight back to your account.

In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.

[ufo]

Pix blew other kinds of bank transfer out of the water. TED, DOC, Boleto, were slow and expensive. Pix is instant, free for most people, and just works.

[dkga]

No, the Central Bank of Brazil did not force any person to start using Pix.

Also, care to elaborate why you think the spec is complicated and hard to implement?

[dkga]

By the way, for those that want more context on Pix a good place to start is this BIS Bulletin: https://www.bis.org/publ/bisbull52.pdf

[hopelite]

It is total corruption through Visa/MC of our political system in a way that people really do not understand. That is who and what would be affected. You can’t even get anyone to propose a bill to create a digital payment processing capacity just like how the government issues currency. It has been the hijacking and takeover of the most fundamental task of the government, issuing currency.

[Art9681]

Does the Central Bank of Brazil publish data on the cost of running the network and how it is funded? Or is there a hidden tax that eventually makes its way to the customer in order to keep it going? Nothing is totally free. Who pays for the infrastructure costs, not to mention the legion of humans that it surely takes to maintain the network? Pretty sure that no matter what is published publicly, someone is paying for it, and that cost is being passed around the logistics chain and ends up on the prices of the products you buy. Sure, it may be much cheaper, but it's not totally free.

[leonidasv]

It costs up to ~$9m per year, processing 63 billion transactions per year: https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gast...

Banks pay a small fee (less than a cent) per batch of transactions.

[Anarch157a]

Pix is free for natural persons and individual entrepreneurs. For businesses, receiving is free, but they pay a fee to send money[0], this can vary from one institution to another.

[0] https://www.contabilizei.com.br/contabilizei-responde/taxa-p...

[arccy]

If the central bank offers it, it would be the equivalent to cash. Cash is also expensive to maintain and issue. Do you ask all the same questions as who pays for cash?

[john01dav]

I'd like to see a system like that that also integrates taxes. That is, it tracks total income for each payee each year and deducts taxes based on the appropriate tax bracket. It should also support sales tax and state income tax. That way, all that you need to do is appropriately mark the transactions and tax compliance is done. You could even mark business expenses in it and have deductions automatically processed.

Someone could lie about the nature of their transactions, but that's called tax fraud and it's already possible and we already have mechanisms to deal with that.

[jimbob45]

Can anyone please steel man the opposition argument for Pix?

[toomuchtodo]

You can’t create a moat to skim 3% of the economy as a for profit venture.

[curiousguy]

Minor annoyance, but just a few limitations and restrictions, after all you need a smartphone and internet connection.

So.. when paying in a store, you need to open your banking app in your smartphone, and if you’re in an area with bad cellular connection (inside a few buildings or in a countryside), you need to connect to the store wifi. Only then you can scan the store QR code and make the payment.

So a single payment can easily take a few minutes, as opposed to a contactless card payment which takes a few seconds.

My main issue with pix is the even more reliance on a smartphone for our day to day life.

[StanislavPetrov]

From the comments it seems that it is essentially the same as using cash as far as no buyer protection if you want to challenge a charge like you can with a credit card.

[godelski]

I'm not a big fan of crypto but I've always wondered why the US wouldn't want to create a highly secure private coin that's pegged to the dollar. I mean you put a very small transaction fee on it (can be far less than Visa's 2%) and you're suddenly generating revenue from tons of global transactions, benefiting from the status of the dollar being the global currency. You even get to "tax" illegal transactions, and as a consumption "tax". It would only work if it was highly private (effectively like cash) as no one else wants to be handing all that data over but it still sounds like it would be a big win to many parties (well not the authoritarians? Maybe?). Everyone will be "banked", you get digital payments everywhere, and you even probably reinforce the reliance on the US dollar. Is the demand for control so much greater than the demand for money combined with providing a public good? I know there's still challenges to resolve but a guy can dream, right?

[throwaway473825]

You're describing a CBDC, not a coin. Why isn't it being done? Because commercial banks are vehemently against that. The current administration in particular will never go against the big banks.

[dakial1]

Because highly secure coin wouldn't allow the government to track money.

I firmly believe that the Federal Agencies do not fight bitcoin exactly because it is so easily tracked.

[pjc50]

> Is the demand for control so much greater than the demand for money combined with providing a public good?

Yes. Also the current administration is hostile to public goods as a concept.

The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.

[XorNot]

Because nobody needs a cryptocurrency when you have a centralized trusted broker.

[arccy]

So like Circle's USDC Circle Payments Network?

[belter]

> I wonder how impactful a public digital infrastructure for the dollar would be.

The future digital dollar is being quietly sabotaged as the current administration realizes that crypto isn't just capable of anonymous bribery, it's the ideal medium for it.

[danielscrubs]

People don’t really believe me when I say I went to the U.S. and had to sing the national anthem every day in class.

There’s no other place that protects its companies so fiercely, meritocracy be damned.

Great for investors though!

[matheusmoreira]

American corporations have never been shy about using the might of the US government to protect their own interests. USTR's "notorious market reports" is a nice example. "Our stakeholders" want this, "our stakeholders" are concerned about that. It's a huge list sovereign nations get onto when american corporations don't like them. They put Canada on that list at some point.

I fully expected Trump to attempt to leverage the Bolsonaro trial into economic advantage but it was pretty surprising to see him take issue with pix of all things.

[qskousen]

FedNow is still a thing, at least for now.

[matthewdgreen]

How do I use FedNow to buy things from merchants?

[rprend]

it's important to note that Pix took over Brazil because it was mandatory. The US Federal Reserve built equivalent infra: FedNow, as of 2023, is the rails for instant settling, $.04 bank transfers. But adoption is meh

[forinti]

It's totally unfair that they don't get a cut from other people's business. /s