What is PIX and how the Brazilian Central Bank’s instant payment works

PIX is the name of a new means of instant payments in digital transactions in Brazil. Created by the Central Bank, it was announced in February 2020 and is expected to operate in the country from November of the same year. The system promises to simplify transfers and make them available during all hours of the day, on all days of the week, through banks and other payment institutions.The differential of PIX is to offer transactions in real time. As soon as a payment is made, the amount is immediately transferred to the recipient – whether an individual, a legal entity or a company. In addition, the system will operate 24 hours a day, 7 days a week, allowing payments at any time. All transactions go through a single, centralized database, managed by the Central Bank, open 24 hours a day.

Another important factor is the ease of making payments. Instead of asking for agency and account information, as current bank transactions require, PIX will use more streamlined options. There are three: through an identification key, such as telephone, CPF, or e-mail; through QR Code and through proximity technologies, such as Near-Field Communication (NFC).In payments with QR Code, two different types will be offered: a dynamic one, which changes the code for each transaction and should be used more in commercial operations; and a static one, to be used in various transactions and with the possibility of changing the value, aimed at individuals. The registration for access to the PIX will be made available directly by financial institutions.The arrival of PIX promises to take the place of DOC and TED, the two current transfer services between accounts. Although these methods continue to exist, the new Central Bank system has advantages and some differences. The most notable is during opening hours: both DOC and TED operate only on weekdays, within bank hours.Currently, TED is the most common operation because it is able to complete the transfer on the same day it is carried out and has no limit on the amounts paid. DOC, in turn, only makes the amount available the next day and only accepts amounts up to R $ 4,999.99. The PIX can be made at any time, without limit of value, and will make the amount available to the recipient in a few seconds after payment. To enhance security, transactions in the new system will notify both the payer and the payee upon completion.Banks and payment applications will have time to adapt to the new system. Financial institutions or payment institutions with more than 500 thousand active customer accounts are required to offer the service. The registration period will start on October 5th, the restricted operation will be launched on November 3rd and, on November 16th, the service will be launched for the entire population.A estrutura do PIX será centralizada em uma base de dados mantida pelo BC, com a comunicação realizada através de sistema de mensageria. Todas as transações serão protegidas por sigilo bancário e serão criptografadas, trafegando na Rede do Sistema Financeiro Nacional. Além disso, as chaves de cada usuário, assim como outras informações pessoais, estarão criptografadas e armazenadas no Diretório de Identificadores de Contas Transacionais (DICT).

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