Brazil Set to Launch Recurring Payments Feature for Pix on June 16

Brazil’s central bank is launching Pix Automático on June 16, allowing users to authorize recurring payments with one consent. This feature will enhance payment methods for millions, especially those without credit cards, and is expected to stir significant growth in eCommerce payments, estimated at $30 billion over two years.

On June 16, Brazil’s central bank plans to launch a new recurring payments feature for its instant payment system, called Pix. Initially expected to debut in October 2024, this feature, known as Pix Automático, allows users to authorize recurring payments with just one consent. Reports from Reuters, citing remarks from the central bank officials during an event in Sao Paulo, indicate that this is a significant step forward for Brazil’s payment landscape.

Pix Automático aims to transform the traditional methods of paying bills with paper and replace existing automatic debit services from banks. It is also expected to create easier pathways for small businesses to offer automatic withdrawals. Furthermore, this development will greatly assist the 60 million Brazilians without credit cards, enabling them to engage in subscription-based services for the first time.

In July 2024, the central bank had announced a delay in launching this feature until June 2023, though no reasons for the postponement were provided. Since its inception at the end of 2020, Pix has become increasingly popular, largely credited to its user-friendly nature, as detailed in the “Digitizing Payments in Latin America Playbook” produced by PYMNTS Intelligence and Kushki.

For Brazilians traveling to neighboring countries, Pix is now a convenient option for paying for services like dining and lodging, and it seems poised to connect with various instant payment systems globally. In January, reports indicated that the fintech company EBANX, an early adopter of Pix Automático, predicted that the new recurring feature could bring in around $30 billion in eCommerce payments to Pix over the next two years.

The expected growth is primarily anticipated to derive from consumers lacking credit cards. This feature is projected to significantly change how businesses manage recurring payments in emerging markets, especially for global Software-as-a-Service (SaaS) companies operating in Brazil. Eduardo de Abreu, Vice President of Product at EBANX, stated in an interview with PYMNTS that 95 percent of new customers of their partners in Brazil make their first purchases using Pix, emphasizing the potential this new method holds for expanding the recurring market in Brazil.

In summary, Brazil’s launch of Pix Automático on June 16 is set to revolutionize the way recurring payments are handled in the country. By enabling single-consent authorizations for payments, it seeks to ease access for millions who do not have credit cards and improve conditions for small businesses. With expectations of significant growth, particularly in eCommerce, this move underscores Brazil’s commitment to modernizing its payment systems.

Original Source: www.pymnts.com