The Central Bank announced in early February the launch of a new instant payment method: Pix, which promises to be a revolution in the way banking transactions are carried out in Brazil.

With full operation scheduled for November 16, 2020, it will begin operating in a limited capacity starting November 3.

This system was inspired by RTP (Real-time Payment), a real-time payment system launched in the United States in 2017, focused on facilitating processes.

However, we know that this new payment method has generated a number of questions among Brazilians.

With that in mind, we've prepared a text answering the most frequently asked questions about Pix and how it will impact the lives of Brazilians and businesses.

Frequently asked questions about Pix

Pix is ​​a Brazilian system for instant electronic money transfers, created by the Central Bank with the goal of facilitating financial transactions for Brazilians with banking institutions, individuals, legal entities, and government agencies.

Promoting greater safety and speed, since operations are expected to take a maximum of 10 seconds, and will be carried out seven days a week, 24 hours a day, including weekends and holidays.

Along with all these benefits, the ease of making transfers by simply typing in your cell phone number or CPF (Brazilian tax identification number). Amazing, isn't it?

1. How does Pix work?

Currently, banking transactions are carried out through wire transfers (TEDs), bank transfer (DOCs), bill payments, card transactions, or cash.

All of these operations can take days and are subject to different fees, depending on each financial institution, in addition to the inherent risks of these transactions.

Pix promises to be simple, since by breaking down several barriers that delay transfers, transactions will be completed in less than 20 seconds.

For this, it will not be necessary to enter the recipient's data such as: bank, branch, account or even CPF (Brazilian tax identification number). It will not be necessary to install any application to use PIX. The system will be integrated with the services offered by banks, fintechs and commercial establishments.

To access Pix, individuals or legal entities must have a checking, savings, or payment account with a financial institution such as banks, fintech companies, or even access a payment platform.

Financial institutions will be responsible for providing their clients with access to register in the new system. This registration must be done through the financial institutions' channels.

The customer will have to specify which Pix key they want to use to register.

This key is the user's identifier code within the system for carrying out financial transactions, such as transferring money to other people's accounts by simply entering their cell phone number or CPF (Brazilian tax identification number).

After defining the access key and giving consent to register, the financial institution sends the customer's information to the Central Bank to finalize the registration in its system.

With this, financial institutions will act as intermediaries between the Central Bank and clients.

2. What is a Pix key and how does it work?

The keys are how the customer will be identified within the Pix system.

Individuals may have up to five keys for each account they own, while legal entities may have up to 20 keys for a single account.

One important point to note: it will not be possible to reuse the same key for different accounts, because the code will function as the delivery address for the transacted amounts.

When making a transfer or payment, the customer must access the financial institution's app, the same one they currently use, and select the PIX option – in the same way they do today to access a TED (bank transfer).

Here's a practical example of how the system will work:

Renata needs to make a transfer to Marcelo in the amount of R$ 30,00.
To complete this transaction, Renata will access her bank app and select the PIX option, which will already be enabled. She will then enter Marcelo's access key, which can be a mobile phone number or CPF (Brazilian tax identification number). Upon completion, the funds will be sent to the account where the key has already been registered. The process will be faster and easier since it will not be necessary to register various information such as bank details, branch, CPF, and other data, as is currently required for any financial transaction.

3. What are the benefits of Pix?

The benefits are numerous; Pix aims to modernize and streamline all transactions. The benefits are many:

• Speed ​​of transactions: funds will be available in up to 10 seconds and can be made 24 hours a day, seven days a week, 365 days a year;
• Simplified user experience, since everyone will have access;
  System security, which will be based on the National Financial System Network (RSFN);
• Amplitude, since it allows the participation of more companies that provide financial services to consumers, does not require having a card machine and/or credit or debit card;
  Communication: both the payer and the receiver will always be informed of the success or failure of the transaction;
• There will be no fee for transactions between individuals. In the case of transactions between legal entities, the fee will be determined by the financial institution.

4. How can we use Pix?

Customers will be able to use PIX to make transfers or pay for bills and products in three main ways:

• Pix keys: with a registered key, it is possible to make and receive transfers in the new system;
  QR Code: By scanning the code, which can be static (generated for a single transaction) or dynamic (generated for multiple transactions), the user can buy products or pay bills. In the future, the proposal includes the possibility of using Pix to pay electricity and telephone bills with the QR Code. For those unfamiliar, a QR Code is a 2D barcode that, when scanned by a smartphone camera, automatically directs the user to the page used for the transaction and, in the case of Pix, already contains the necessary data for making the payment.
• Documents that contain only a barcode, and not a QR code, cannot be paid using Pix.

5. What will be the transfer fees via Pix?

All transfers between individuals will be free of charge, meaning customers will no longer need to pay TED or DOC transfer fees to their banks.

Individuals will also not be charged fees when making payments to commercial establishments.

In the case of legal entities, i.e., retailers, they will be subject to fees when receiving payments. However, as announced by the Central Bank, these fees will be much lower than those currently applied. Nevertheless, financial institutions will define the fees, and there will be no intervention from the Central Bank in the prices charged; it will be up to retailers to choose the best option on the market.

Transfers between legal entities will also be subject to fees.

Financial institutions will be free to set the fees they charge, and businesses will be able to choose the rates they deem most fair to operate with. The Central Bank will not intervene in setting these fees, as is currently the case.

The Central Bank believes that there will be a reduction in fees, since there will be a reduction in intermediaries. For example, today in a normal credit card transaction, a portion of the fee goes to the acquiring bank, another portion goes to the issuing bank, and another portion remunerates the card network.

If the merchant uses Pix, they can issue a QR Code to receive a payment, eliminating the need for any intermediary. Another benefit is the speed of receiving funds; using Pix, payments will be received immediately, unlike the 30-day wait that occurs with debit and credit cards.

7. How long does it take to receive a PIX payment?

Transfer speed is a basic quality prerequisite that the Central Bank has imposed and will enforce on financial institutions.

The Central Bank estimates that 50% of all transactions should take place within six seconds; and 99% should take place within ten seconds.

In summary, the maximum time it will take for a consumer to receive any transfer will be up to ten seconds.

The Central Bank will monitor compliance with the established deadlines, especially since system congestion may occur.

8. What will be the limit for transfer amounts?

The Central Bank has not set a value ceiling for transfers, but, just as with other types of transactions, financial institutions may define a ceiling, provided that it is not lower than that already practiced in other types of transfers. In other words, if a financial institution sets a limit of R$ 5 for a TED (Electronic Transfer of Funds) for a client, the Pix limit cannot be lower than that amount for the same person.

Financial institutions establish limits to ensure security and reduce fraud in transactions, and therefore the same logic will be followed in the case of transactions made through the Pix system.

9. Is the system really secure?

Security concerns are always present when discussing financial transactions; however, the Central Bank already has experience with TED (Electronic Funds Transfer) and banks and financial institutions will also be responsible for the system's security and will apply their rules to avoid financial losses. In other words, transactions made via Pix will follow the same security measures currently adopted in all transactions carried out via TED and DOC (Bank Transfer Document), such as authentication and encryption methods.

There are still no protocols or guidelines established by the Central Bank How to handle fraud will be the responsibility of each institution and will vary depending on the institution. But it is worth remembering that the security of the new system is based on the SPB (Brazilian Payment System), which has been in operation since 2002 and is considered to be of high technical quality.

All financial transactions will occur through digitally signed messages that travel in encrypted form on a secure network separate from the Internet.

Another concern of customers is regarding personal information. The Central Bank guarantees that all customer information will be protected by banking secrecy, established in Complementary Law number 105, and also by the General Data Protection Law, which will come into effect soon.

In addition to this, in the Transactional Account Identifiers Directory (DICT), a component that will store Pix key information, user information will be encrypted, and there are protection mechanisms that prevent scans of personal information, as well as indicators that help ecosystem participants in preventing fraud and money laundering.

10. Which banks will participate?

All banks or financial institutions with more than 500 active accounts were required to register. In other words, these institutions are responsible for almost 90% of all financial transactions in Brazil.

11. Is it possible to schedule an appointment using Pix?

A feature called "Scheduled Pix" will be made available, specifically for scheduling transactions, in the same way that a TED, DOC, or bill payment is made. It will also be possible to cancel the scheduled transaction up until the date it is originally scheduled to take place.

12. Can I make a Pix transfer to my brokerage account?

Initially, this will not be possible; customers will have to continue making payments via TED (Electronic Funds Transfer). The Central Bank emphasizes that it has a plan to implement this improvement and already has an agenda for the coming years, and new functionalities may be included.

13. Can I make a Pix payment abroad?

This will not be possible because Pix will not be connected to systems abroad, and initially will only work with institutions within the national territory. However, as mentioned in the previous question, there is a project planned for the coming years.

14. What will happen to other payment methods, such as bank slips, wire transfers, bank transfers, etc.?

The Pix system is intended to complement existing payment methods; all other methods such as TED, DOC, and bank slips will continue to exist. In other words, the Central Bank has no intention of eliminating the others, not even in the long term.

The Central Bank has created a page with questions and answers about Pix, the new form of instant payment, which is available at this link here.

So, what did you think of our post? Are you ready for PIX? Comment below and share this news with your friends! Oh, and if you have any questions, Get in touch with our consultants!