See the latest developments in simplifying international financial transactions, including cross-border remittances.
Since its official launch, in November 2020, Pix has been consolidating its position as one of Brazil’s main payment methods. In February 2023, for example, 2.5 billion Pix transactions were carried out. The simplicity and agility of Brazil’s instant payment system has become a reference for other countries, which are also working on their own solutions. In Latin America, conversations are already taking place between the Central Bank of Brazil (BCB) and representatives from countries such as Chile, Ecuador, Colombia and Uruguay. Read on to learn more about the internationalization of instant payments for international remittances and cross-border e-commerce.
A unique payment method with the capacity to integrate different currencies from different countries is part of the plans of the BCB. According to its president, Roberto Campos Neto, International Pix is a more viable solution than creating a single currency for South America’s countries.
In late February, Campos Neto participated in an event at the Brazilian Institute of Education, Development and Research (IDP) and, on the subject of international Pix, said that the institution is studying the possibility of organizing a bloc of countries in which cross-border payments are instant, in line with the Pix model. According to the BCB’s Competition and Financial Market Structure Department, international Pix should be implemented by 2025.
Around the world, initiatives similar to Pix are being developed. In the United States, FedNow, commonly known as “U.S. Pix,” should be launched in July 2023, four years after it was announced by the Federal Reserve. Information on the U.S. instant payment system is very similar to Pix: functioning 24/7 with features to ensure data security and combat fraud, for example.
The Nexus project, which was developed by the Bank for International Settlements (BIS), proposes to interconnect payment systems worldwide. The Swiss-based institution promotes cooperation among 63 central banks around the globe. Andrew McCormack, the BIS leader in Singapore, said in an interview to the portal Fintech News Singapore that Nexus focuses on cross-border payments in the retail sector and should reach the general public on a test basis by the end of 2023, with full implementation expected by 2025. To ensure the Nexus project’s success, BIS must ensure real-time conversion of multiple currencies, instant transaction settlement, security measures to combat fraud and interconnection with all international payment systems worldwide, which in practice will occur through APIs.
Another initiative being developed in parallel is Dunbar, a project specifically for CBDCs and B2B commerce, which is a medium- to long-term strategy that could take 10 years to become operational.
So far, Pix is restricted to Brazil, for payments between either individuals or companies. In both cases, remitting or receiving money internationally requires an FX transaction. Also note that the New Foreign Exchange Framework has simplified international remittances, for example.
In the B2B market, however, seamless and digital cross-border payments already are a reality. A cross-border e-commerce marketing products to Brazilians can display for consumers all prices and fees already converted into Brazilian real, making the shopping experience clearer and simpler. During checkout, payment can be made via Pix or any other popular payment method in Brazil. It also is possible to send multiple payments to people and companies in Brazil instantaneously through the Bexs solution integrated with Pix. Learn about our local payment processing solutions (Payin) and Mass Payments.