Payments giant Fiserv might have just contributed to exporting Brazil’s huge mobile payment boom overseas.
The U.S. firm enabled its merchants in neighboring Argentina to start taking payments in Pix, Brazil’s groundbreaking instant payments system, which has become ubiquitous in the country.
Brazilian tourism to Argentina is booming, making a case for LatAm-wide companies such as Fiserv to build products that meet this growing demand. The fintech has created an interface allowing Brazilian tourists to pay with the instant payment system as if they were back home in Rio de Janeiro or Sao Paulo.
This is an industry-first, Jorge Valdivia, general manager of Brazil at Fiserv, told Fintech Nexus in an exclusive interview. It could also pave the way for replicating the process in other countries in Latin America, he added.
140 million use Pix in Brazil
Launched by the Brazilian central bank in late 2020, Pix has met no growth limits yet. It has expanded exponentially ever since, used by 140 million individuals in Brazil or almost two-thirds of its entire population. It processes north of $200 billion in transactions every month and is growing.
With those numbers in sight, extending Pix’s reach across Latin America provides a remarkable opportunity. “Pix is the preferred payment method for more than 86% of Brazilians,” Valdivia told Fintech Nexus. “Its popularity has created interest among Brazilians who would also like to use this method outside the country.”
Facilitating these cross-border payments can be profitable. Total card spending by Brazilians in Latin America and the US amounted to $5 billion in 2022, a report by the local credit card company association found. “As people travel and transact more post-pandemic, the market for these transactions will grow,” Valdivia said.
Pix’s convenience makes it an attractive alternative to Brazilians abroad. It is usually cheaper than credit and debit cards and processed instantaneously. “It is also very secure,” the executive said, making it a compelling alternative to “carrying out lots of cash.”
Fiserv reports 400,000 merchants in Argentina
With a severely undervalued currency, Argentina has become a top destination for neighboring countries. Thousands of Brazilians flock to Buenos Aires every week. With inflation over 120% and a depreciated peso, moving around stacks of cash has become problematic.
“For these reasons, it made sense to expand the availability of Pix into Argentina,” Valdivia said. The U.S. payment giant reports 400,000 merchants in Argentina using its services. Fiserv’s technology allows retailers in Argentina to issue a QR code that Brazilians can use to pay utilizing Pix. “The amount is converted into reais at the purchase, for which the buyer knows exactly how much they are spending in local currency and avoids exchange rate variations.”
The company is considering replicating the product elsewhere in Latin America, although it did not provide further detail on the next steps. “From a technological perspective, it would certainly be possible to expand these capabilities to other markets,” Valdivia said.
Brazil considered making Pix international
In less than two years, by the number of transactions, Pix became Brazil’s most used means of payment. According to a recent report by the central bank, it accounted for almost 30% of all electronic payments in 2022. That is higher than 20% for credit cards and 19% for debit cards.
In December, the president of the Central Bank of Brazil announced its protocols would be made available to other regulators to replicate. “We will open everything that we did with Pix to all central banks that want to copy it, for free,” Governor Roberto Campos Neto said at an event in Sao Paulo, according to local media.
As of yet, however, no public-led initiatives have been reported.