I can see that Visa and Mastercard are freaking out, not because Pix can take over their business model, but because it can give ideas to other countries doing the same.
I've spent three months earlier this year in Brazil and never used Pix once. Not because I didn't want, but because I couldn't, or let's be honest: my time was not worth the hassle. To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID). Then to open a bank account, mostly local banks only accept Pix, with which you can tie your CPF. It's possible but it's definitely not straightforward the slightest. All the while Visa and Mastercard work everywhere in the country, I almost never had to pay in cash, even some sellers in the streets accepted regular credit cards.
Pix is certainly great, but locally only, and if every country comes with its own system and Visa or Mastercard disappear, we are going to go back to how people used to travel 50 years ago: with a lot of USD bank notes hidden in your hotel room or elsewhere ...
Pix is a good local idea, but the world needs something better.
> Pix is a good local idea, but the world needs something better.
There is no problem to continue using maybe Visa/Mastercard when dealing abroad or external, but when you are a normal citizen, it's far better to use Pix in this case, you are supporting a national company, paying fee's to them and not at the whims of an external countries policies.
Edit: They also tend to be non profits ironically enough.
In Ireland many years ago there was a system called "Laser" which was very similar, the only reason it was changes was for 'convenience' but in reality it was because Visa and MC had taken over all the POS market, and so Laser cards couldn't give cash back. So the banks just folded.
I can't wait to see Europe being some competition to the duopoly that is Mastercard and Visa.
Europe already has plenty of alternative card systems e.g. France's Cartes Bancaires (CB) and ironically Germany just last year turned it's Girocard/Maestro system off in favour of Visa/Mastercard; the problem is the banks in individual countries in Europe are not willing to give up their control in favour of a compatible standard.
Germany didn't turn off Girocard that's just fake News.
I literally paid yesterday using Girocard.
It also works with some big German retailers outside of Germany (like with Billa in Austria which is a subsidiary of Rewe Group)
Maestro and Visa just stopped offering Maestro/V-Pay so they can charge the higher fees vor Visa/MasterCard. The only thing that changed is the Co-Badge on most Girocards
> the problem is the banks in individual countries in Europe are not willing to give up their control in favour of a compatible standard
Well this is flat out wrong. Every countries banking system pays fees for processing visa and MasterCard. When there is a viable alternative in place with less fees, the bank like any money making enterprise will take it. Framing it as "countries" blocking it demonstrates you either have an agenda against EU or you're not sure how the EU works.
> in reality it was because Visa and MC had taken over all the POS market
Do you happen to have any insight on this? I mean, how is it that one or two companies can manage to squeeze everyone else out so completely? If two big players control Point of Sales (POS), shouldn't someone be able to come in and make a business out of underselling the competition? I would think that smaller overhead means smaller margins are needed.
I've talked to small businesses about fees and charges for their POS and they are always thrilled when people pay with cash, because it means they get the full amount. (These conversations have come up because I've run small businesses in the past, and I remember how horrible it felt to "sell" something for $30, only to get like...$5 out of it between fees, taxes, and insurance costs. It seems like every business I've spoken to hates Visa and MasterCard with a passion, so I would think that small business would be thrilled to have a new player.
At a guess, I would think that part of(?) the reason may be due to (and rightfully so) whatever regulations are in place to force money transfer companies into meeting certain security ratings or whatever. Even so, surely there are people that are willing to fight for a piece of the action, right? It seems crazy to me that no one else sees that as an opportunity to do it better. I'd really like it if fees for small-to-medium businesses could be dropped entirely, and it was only the major players that offset the costs for everyone else.
Do you mean that they have lobbied virtually all countries though, or what? I don't understand how they can be so dominant on a kind of global scale. I suppose there may be some places where they are not (I.e. North Korea, and a few other outliers) but I would assume they do have a certain amount of broad, global reach. Have they really just managed to bribe/make "friends" with (almost) every country on the planet?
> If two big players control Point of Sales (POS), shouldn't someone be able to come in and make a business out of underselling the competition
When your business depends on a customer focused payment, your primary goal is reach, more possible customers, bigger market. If a competitor or offering lower fees, it's still fees, of which those userbase might cross over. I hate this framing of the problem as a "well it's the shops fault"
It's short sighted limiting. And ridiculously oversimplified. Steam being dictated what they can sell being a great example thanks to pressure from the visa and MC duopoly.
Thanks for the response. I'm not quite getting it though. Are you saying something like, "If there are fees, the amount of those fees between A, B, and C are relatively inconsequential"? Or something else? I would think that if I am shop owner, I want to get as much of the sale as I can. So, if Company A and Company B both want 7%, but Company C only wants 4%, I'm going to switch from A/B to C as soon as I can. I don't get why there isn't a Company C trying to snag more shops in that way.
I'm also not very well versed in what you mean about Steam; are there specific types of games that Visa and MasterCard have prevented them from selling recently? I've used that service for a number of years now, and usually the only titles I don't see on there are ones that have some kind of exclusivity deal either with a gaming console, or with Epic or whatever. I know that they had some controversy a while back over the game "Hatred".
I have also been a little grossed out at the amount of Hentai-like content they've started to allow on their platform, but once I turned on the "Hide adult-content" setting, and setup a few additional filters, it's been pretty painless for me. Is there other types of games that they want to sell, but have been prevented from selling?
Europe spends way too much time and money on various Fintech pet projects. There's the Digital Euro and then there's Wero and Target and a bunch of other shit that doesn't reach consumer scale usage or attention.
And your point is what? That nothing should ever be investigated, trials, or invested in until it has as you call it "consumer scale useage".
The EU is not perfect, but these kind of black and white comments highlight why it can be slow to align everyone to get on board with an idea. The empty vessle makes the most noise.
No, my point is to focus on one thing and get it done right. The right time to build an EU-wide payments processor was pre-COVID, as is the case with Pix, UPI, WeChat Pay, etc. If developing countries can build one over the course of a decade, what stopped the EU? Project managers and CV padding bureaucrats who really weren't serious about doing a good job. Compare that to the concerted efforts by the central banks in India and Brazil to actually work with the private sector to build out this system.
The EU has had the plumbing needed for this since at least 2 decades, yet has not managed to create this.
Again, that's a silly argument, when you're saying "It should have been done before" but at the same time saying "Europe spends way too much time and money on various Fintech pet projects."
> If developing countries can build one over the course of a decade
What countries are you talking about ? The EU countries have some, we also have instant IBAN transfers without any payment processor, we have PCI compliance in all banks to allow it. This feels like another example of you not knowing what you're talking about when you say 'The EU has had the plumbing needed for this since at least 2 decades, yet has not managed to create this.'.
The foundations to never rely on payment processors is already there, now we need to remove the dependancy on payments like visa and mastercard because of nescessity. And as someone above posted, it in progress, it will be done standardised across the entire EU, in Brazil, it's one country.
Edit : There was also never a demand for it because the EU reasonably assumed it could rely on US partners to cover areas in which the EU didn't focus. Only recently those priorities changed, politics has that effect here of dealing with the most pressing issues and not those that are lobbied for the hardest.
> To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID).
It's not ideal, but you can use Wise to pay using Pix and India's UPI. You simply transfer the money from your local bank account to Wise and they transfer to whatever Pix you tell. It's almost instant.
Meanwhile, there are talks about integrating these systems. This is the obvious long-term game, a clear threat to Visa and MasterCard.
Right now in Brazil the only advantages of using a regular credit card are the cashbacks and convenience to use contactless. The convenience is going away -- Pix now supports contactless payment, but it's not widely accepted yet.
Another advantage is anti-fraud measures and remedy (chargebacks). This (BTW clearly AI-generated) article mentions some fraud thing they're working on (Special Refund Mechanism), so we'll see how long it takes for that to take effect.
For now, I'll be using our Canadian not-quite-Pix called Interac to pay small amounts of money to people I trust, but I won't any time soon be buying a fridge with it, or booking a week-long cottage stay on a website I've never used before.
Canadian here who's not familiar with Pix; is Interac a pretty close comparable? If so, it's not the end-all answer for exchanging money for goods & services, but great in a small subset of transactions.
It's not run by a central bank and not mandated, but it "organically" became standard for banks and many vendors to support it. I hope they find a good way to combat fraud and the fee differential will make it more frequent for vendors to offer a discount for cash/Interac (or an extra charge for credit cards). It used to be common, then got banned, and is now allowed but uncommon. I for one don't really want to use an American credit card, but the fact that I get 1.5% cash back and fraud protection is a fairly strong incentive.
In contrast, I had great support the one time I contacted them. Have used them in business and personally across a number of different accounts with no problems.
tbh even cashback these days might be worthless. It need to be a considerable amount. Because most things you buy, you have a discount when buying with Pix or money...
What still make credit cards strong in Brazil it's installments though...
Pix isn't intended (yet) for foreigners to use. It's mostly for local Brazilians, and here it's brilliant: free for personal use, really fast (frequently instantaneous, has a 10 second limit), and accessible (every major bank and most of the smaller ones supports it).
I can understand why Visa and Mastercard are worried. Apple is as well, since it refuses to support Pix in Apple Pay, which is mandatory in Brazil. But honestly? Fuck these companies. (Sorry about my French, I couldn't think of another way to put it.)
There is India's UPI (launched in 2016), Singapore PayNow (Launched 2017) that works in a similar way. And they also work across each platform.. UPI users in India can transfer to Paynow users in Singapore and vice versa.
Other countries adopting it is already happening. I live in Bolivia, and a few events made QR payment systems widely used across the country. I have family in Peru, and it is a similar case with Yape, another QR payment system. In Bolivia, fintech companies also offer integration with Pix in Brazil without the need for a CPF to send and receive payments. Since we are neighbors, this is very handy.
China's UnionPay and AliPay are to various extents are integrated with the systems in Vietnam, Thailand, Malaysia, Singapore, and Indonesia [1]. Each country has its own system, but integrates with others.
Well .. How did you register to MercadoPago? I never was able when I was in Argentina (end of last year). It also asked me for some official IDs in Argentina which is even harder to get than a CPF (or probably impossible as a non-resident, I didn't bother at that point)
That's exactly what's happening, see the EU digital euro scheme. It's planned to be free of fees too, modeled around how SEPA was done for wires.
There has been massive resistance by the incumbents of course, including banks (since they too charge a fee on top of visa).
It's been in the backlog for years but the US sanction against ICC judges leading to them being cut off from most things including payment triggered a renewal of it.
That's what I am afraid of. The resistance from the incumbents plus the external pressure from the US (and China?) might be to strong. Better go with a federated approach, mandating all the different payment apps available all over the EU to allow connections from other participants.
In any case, the digital euro seems to take years (earlier expected date is 2029). I don't understand why it takes so long.
The European Payments Initiative (Wero) made the mistake of only aiming for Peer-to-Peer QR code payments, carefully avoiding competing with cards so each country could keep their card schemes (Cartes Bancaires, Girocard etc). I don't think it will ever even _compete_ with cards in the near future.
From what I remember the bank started to federate around a payment network to outcompete the digital euro. I hope the digital euro wins, I hope they don't fumble it.
- Switzerland hasn't gotten Apple to open up NFC payments at the same conditions as the EEE, at least not yet.
- Twint is part of the EMPSA which hasn't really delivered anything tangible. On the contrary there's now a real push from EPI and EuroPA to make Wero interoperable with non-Eurozone networks. Hopefully Twint will get on board too.
- Transaction fees are on the higher side, consequently merchants don't have any reason to push Twint or disincentive debit card payments.
> Twint is part of the EMPSA which hasn't really delivered anything tangible.
It's easy to see why. Both Swish and Vipps is part of EMPSA. In Sweden, everyone uses Swish. Vipps (from Norway I believe) wants to expand to Sweden but no one is using it since it's not compatible with Swish. So making it compatible would potentially hurt the business of Swish.
Regulation is needed. Otherwise it will never happen.
If EPI / Wero reach a critical mass then hopefully this will change, as non-Eurozone countries will have a direct interest in making the local mobile payment solution accept the one used by an area of 350+ million people.
Then the EPI protocol could become the least common denominator and you might be able to use Vipps, Twint, Blik... in Sweden? I believe similar scenarios are happening in Asia around Alipay and UPI, for instance I think I can use the Korean Kakao Pay on a payment terminal in Japan, because both sides are compatible with Alipay+.
Lots of other Asian countries already did something similar, e.g. Singapore had PayNow QR Codes (probably the closest to Pix) since 2017, Thai PromptPay was even earlier and India UPI (slightly different wallet system) since 2016. China was even earlier but different though private superapps.
What has changed, and I find interesting, is that Card rails are more and more used for political pressure [1], and I feel the "American hemisphere" is probably the reason Pix gets more of this pressure than Asian countries.
There is nothing preventing PIX from going global (just like VISA/MC). If you look at the history of domestic systems e.g. China Unipay, India UPI/Rupay, Japan JCB they started off as local systems and went global.
Japan JCB is Internationally accepted. China Unipay is also considerably "international" i.e. internationally accepted and India's UPI/Rupay card is adding new countries at a fast clip. The reason most people "don't know" whether they can pay with China Unipay or India's Rupay is because they are not advertised with the same logos as VISA/MC on acceptance sites.
However both China Unipay and India's Rupay through their partnership with Discover Card (now owned by CapitalOne ) are accepted anywhere Discover card is accepted
The place where these "domestic" systems haven't quite measured up to VISA/MC is the issuing side i.e. the entities controlling these systems currently do not allow foreign banks to issue cards with their logos or use their network to settle the transactions. If you're in the US, you may not get a Unipay or Rupay card from a local bank. There are multiple reasons for that, some strategic some political.
It will be interesting to see how they evolve over time. In spite of the exponential rise of PIX , UPI and Unipay, VISA and MC themselves have been doing remarkably well in the past 10-20 years. Unlikely either of them will go belly up.
Lots of countries around Brazil are taking pix. Argentina, Uruguay, Paraguay.
And you can totally expand the idea. The fact that you need national id for pix doesn’t mean the idea “doesn’t scale.” It means the current implementation of it is not focused on use by visitors.
I really don’t understand what you’re getting at, it seems like a pretty narrow view of the possibilities.
Meanwhile US citizens are using paper (cash and cheques) for lots of transactions. Or one of the big credit card corporations.
> To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID).
There are third party apps you can use to pay with pix using a credit card, can't recall that name, but read about it here a few months back, on another pix-thread.
> CPF (Brazilian Tax ID). Then to open a bank account
Getting a CPF is absolutely trivial, but I'm not sure you can open a bank account without RN/RNE, at least not with local banks. Can probably manage with one of the online banks.
Calling a CPF a "tax ID" is a bit misleading, much like calling an SSN "the way you get social security benefits". You can (even as a non-citizen) get one in a couple mins at the post office, and it's used for literally everything, including things like buying a SIM card or registering for some public WiFi hotspots.
Okay, that's quite a bit less bureaucratic than American EIN, ITIN, or SSN (collectively known as TINs).
How many digits/letters long is it? One problem with American TINs is the entire space is only a billion digits, so it's not possible to assign one to every person in the world. If we could add two more digits or make 3 alphanumeric, it would be a lot more feasible to do this, but that is basically impossible at this point.
I think you need a RN/RNM to open a bank account even with online banks - I haven’t tried all of them of course so there might be some that work with cpf only
> I can see that Visa and Mastercard are freaking out, not because Pix can take over their business model, but because it can give ideas to other countries doing the same.
Oh they absolutely will. And the US government will come to their aid.
Consider the case of Bombardier [1], a Canadian airplane manufacturer. Boeing was caught with its pants down by Airbus with the A320/321 and panicked into making the 737MAX. Boeing has a captive audience with US airlines and the 737. A shared type rating is a massive advantage for Boeing but the economics of the Airbus narrow bodies were just too good.
Then along comes this Canadian companiy who saw an opportunity to create a narrow body commercial jet in this range (100-150 seats) and some US airlines were interested. To avoid this Boeing offered United a deep discount to not buy the CSeries and Bombardier responded with discounts of their own.
What happened? Boeing then went to the government and accused Bombardier of "dumping" as well as having goavernment subsidies. This is particularly funny if you know anything about the billions in subsidies Boeing gets from both Washington state and the federal government. The US governments made complaitns to the WTO and ended up imposing a 300% tariff on Bombardier, effectively killing that business. It eventually became the Airbus A220.
Free markets, by the way.
The US will punish foreign companies for competing on price by abusing process and treaties, ignoring it whne it's inconvenient, use tariffs with flimsy excuses, punish unrelated industries to apply pressure and otherwise bully other countries for daring to compoete.
Being American companies is unacceptable. So is doing anything that serve as a model to any other country that might threaten an American monopoly or oligopoly.
So prepare for accusations of government subsidies and the US applying pressure in unrelated areas because of this.
As an aside, the US does this with governments too. "Oh, you wanted to profit from your own natural resources and use that money for the benefit of the people? I think not. Look at this system of government that isn't working. Nevermind that we're starving it with brutal economic sanctions. It doesn't work. Look away. Nothing to see here."
Lovely how China is now beating the Americans in their own game. And the reaction is predictable: accuse the Chinese of being a threat to National Security and stop them from taking over the American market after they have already taken most of the rest of the world. Eventually, Americans will be the ones paying the price for the overly protectionist policies of their government.
Visa and Master have basically lost the enormous India market outside of credit card business when UPI was more or less mandated by the Indian Reserve Bank and really took off during COVID. Now these regional payment networks are starting to be interconnected like UPI with Singapore's NETS etc. This must be driving intense paranoia among payment networks.
Sure. It might have been different in other places but when my folks took out traveller's cheques in the nineties to travel to e.g. the caribbean the 'cost' in the form of a slightly worse currency price wasn't a serious issue, in part because ATM fees/exchange rates were way steeper than piecemeal exchanging the cheques for local cash. Getting a bank to reissue cheques was easier than replacing a card too.
Some destinations were probably cash friendly, i.e. no one would scope you out for theft, but that's not the kind of travel I had in mind. I'm actually not that familiar with that kind of travel, I've mostly travelled on a budget or to less touristy places.
Yeah, if I wanted to pay the crazy spread on currency exchange, I’d use my credit card instead.
10 years ago I was still traveling with a bunch of $100 banknotes and reading blogs to find the most honest shady currency exchange place with good rates wherever I went. Fun times!
I even paid for two! iPhones in cash back then!
Today? I just stop by an ATM and withdraw some cash, everything else goes contactless on Wise.
VISA an MasterCard have Credit Cards. Pix is just a way to transfer money you have in your bank account. In europe we can do that with IBAN. It goes from one account to another. In Argentina we have something similar in all banks. What is unike from VISA and MasteCard, at least untill now, is the Credit part of it.
I wonder if I showed up (as a foreign visiting) in the US how long it would take and what kind of documents would it take to have a Visa/Mastercard. I guess it would be the same as having or even longer to have your CPF issued and a digital account here in Brazil.
Does Pix have an equivalent of a prepay debit card? That seems like the most logical easy setup.
If you must have integration with identity, just tie it to whatever visa or proof of arrival. Last I went to Mexico they were issuing QR codes for inbound travelers.
Most European countries I frequent already have their own local equivalent to Pix. In Spain almost everyone has Bizum, and not uncommon for vendors at markets to accept it too, Sweden has Swish which is the same deal for the Swedes. I think this lists the most prominent ones that are in wide usage today already: https://en.wikipedia.org/wiki/European_Mobile_Payment_System...
Wero is a private effort, the digital euro is closer to Pix but it keeps being stalled (given the article in question, one could make some guesses as to why).
Frankly, the number of people that care about no-phone functionality is tiny. I bet the greatest preference is the other way: the ability to use it without a physical card. Everyone has a phone.
Of course you need a backup at some point, but it’s just that: a backup.
The stated objective of this initiative is to break free of the American Mastercard/Visa duopoly. It would be pretty fucking stupid that if replacement required the use of the American Apple/Google duopoly!
Convenience of use with your phone is one thing. Requiring a (locked-down, attestated) phone to create an account is another thing entirely.
Visa and Mastercard already are a single point of failure (see e.g. the French judge that cannot use it anymore because the US government did not like it when he did his job). This way, there'll be at least two points of failure.
I've spent three months earlier this year in Brazil and never used Pix once. Not because I didn't want, but because I couldn't, or let's be honest: my time was not worth the hassle. To be able to pay with Pix, one needs to get a CPF (Brazilian Tax ID). Then to open a bank account, mostly local banks only accept Pix, with which you can tie your CPF. It's possible but it's definitely not straightforward the slightest. All the while Visa and Mastercard work everywhere in the country, I almost never had to pay in cash, even some sellers in the streets accepted regular credit cards.
Pix is certainly great, but locally only, and if every country comes with its own system and Visa or Mastercard disappear, we are going to go back to how people used to travel 50 years ago: with a lot of USD bank notes hidden in your hotel room or elsewhere ...
Pix is a good local idea, but the world needs something better.