ATLANTA--(BUSINESS WIRE)--Matera, maker of world-class instant payments, QR code and digital ledger technology, today released its year-end report on the adoption of Brazil’s highly successful Pix instant payments scheme. The latest Pix by the Numbers report covers data through Q4 2023 and shows that the number of Pix transactions is 13% more than credit and debit combined. The report also offers key insights for U.S. financial institutions (FIs) as they look for new ways to drive instant payments adoption.
“Brazil is setting the global standard for the digital finance revolution. While Brazil and the U.S. have very different payment infrastructures, the use cases, overlay technology, and innovative products driving instant payment adoption in Brazil showcase ways U.S. banks and credit unions can unlock the FedNow and RTP instant payment rails to give consumers and businesses better payment options,” said Carlos Netto, CEO of Matera.
The Latest Data
Matera reviewed data from the Central Bank of Brazil and noted several key insights. These include:
- Pix Continues to Accelerate Past Debit and Credit: Pix transactions for Q2 2023 totaled 9.4 billion vs. 4.4 billion credit card and 3.9 billion debit card transactions. The number of Pix transactions is 13% more than credit and debit combined.
- Credit and Debit Share of Transactions has been Declining Since Pix Launched: Pix accounted for 36% of all transactions in Q2 2023, up from 25% a year ago. Credit card transactions were 17% of total, down from 20% one year ago. Debit card transactions were 15% of total, down from 19%.
- Fastest Growing Pix Use Case is Consumers Paying Businesses: 36% of Pix transactions in December 2023 were made by consumers paying merchants and billers instantly. This is up from 24% a year ago.
What It Means for the U.S.
There are now 400 FIs that are certified to offer FedNow and The Clearing House (TCH) has 456 financial institutions live on its instant payments rail. TCH realized a big boost in demand since FedNow launched in mid-year 2023 with 130 new signups since July.
While signups are encouraging, Pix volume is well over 100x U.S. instant payment volume. The key now in the U.S. is adoption - how to get consumers and businesses to use instant payments.
When Pix first launched, it was person-to-person payments that first converted to Pix. Brazilians didn’t have Venmo, CashApp, Zelle or other P2P payment apps so paying friends and family digitally was a novelty. By contrast, in the U.S., the first dominant instant payment use cases were business-to-consumer payments. Examples included moving money instantly from a Coinbase, Robinhood, or PayPal wallet (e.g. cashout) or paying hourly workers at the end of their shift instantly rather than via ACH every two weeks (e.g. Uber).
Most notable for the U.S., however, is the surge in Pix payments that are consumer-to-business (P2B). This trend is being driven by merchants and billers. Being paid instantly is a game-changer for them and they pay less to process a Pix payment than any other form of payment. Businesses are providing incentives to consumers to pay via Pix and consumers are happy to get 10% off or more for paying with Pix.
QR codes are key to P2B transactions to ensure neither the consumer nor the business has to share their bank account information to make a payment. Enabling banks and trusted third parties to facilitate secure QR code transactions on behalf of merchants and billers will accelerate adoption of FedNow and RTP in the U.S.
It’s this P2B Pix surge that has convinced the legacy card infrastructure players in Brazil that they need to shift their business model in support of Pix. They can no longer rely on card-related revenues to drive their business. While credit and debit cards still generate income, it’s likely to be unsustainable over time.
“With FedNow and RTP, U.S. financial institutions have a real opportunity to give consumers and businesses better payment options,” said Carlos Netto, CEO of Matera. “Pix shows how simple payments can be. It poses the greatest threat yet to credit card dominance. That said, there is still time for credit card companies to innovate. The only thing that is certain is that the U.S. is on the cusp of true disruption in the payments space.”
Matera’s guidance is based on its proven experience with Pix. The company’s Pix instant payment software processes over 3 billion instant payment transactions a year, 20% initiated by QR code. They are the largest third-party provider of Pix instant payments with about 10% share. Perhaps most notable is the impact Pix had on Matera’s Core banking solution, a business they’ve operated for over 30 years. Legacy Core banking platforms weren’t designed to authorize transactions 24X7 and in real-time. Matera designed a light ledger, Digital Twin, to complement their legacy Core solution so their clients could keep up with the demand for Pix transactions.
To read the latest Pix by the Numbers report in its entirety, please click here. For more information on Matera, visit www.matera.com.
About Matera
With over 30 years of experience, Matera has proven technology, deep fintech expertise, is a trusted partner and is known as a pioneer. Matera’s Core banking and Pix instant payments solutions are used by 2 out of the top 3 global banks, 3 of the top 10 U.S. banks and 1/3rd of all banks in Brazil. Over 300 million Pix instant payments are processed per month using Matera’s solution and 60 million of those are initiated by QR codes. Matera is also known for collaborating to launch innovative fintech applications that generate new revenue streams for their clients. With operations in both Brazil and the U.S., Matera has nearly 1,000 employees worldwide.
