Brazil’s Possible Pix Pause Likely to Cause Disruption

In Brazil, a temporary suspension looms for a popular payment choice — and, by extension, a disruption in commerce itself.

But, beyond the fact that Brazilian lawmakers are reportedly considering a suspension of the country’s Pix instant payments system lies a key point of consideration — namely, the vulnerabilities inherent within the instant payments ecosystem itself.

In Brazil, the Pix mobile payment system has been in place for a bit more than a year. In terms of scale and volume, it processes more than 1 billion transactions each month for more than 112 million users.

Read more: Brazil Crime Uptick Could Result in Instant Payments Suspension

But, amid a surge in financial crime, legislation might pave the way to pause those payments — at least until lawmakers iron out some of the vulnerabilities.

Thus far, the proposed ban would be tied to the state of Sao Paolo, meaning that the pause might not be a nationwide outage.

But, if caution reigns, then it might be the case that the ban widens, barring banks and other institutions from processing payments through Pix until the Central Bank addresses the security issues.

Any pause would likely slow the momentum of the platform, and that momentum has been heady, indeed.  As reported by Bloomberg, $89 billion has moved through the network, indicating that instant payments done across mobile devices has truly caught on.

“We expected considerable acceptance from individuals, and we knew companies would come later on,” Carlos Eduardo Brandt, the chief of management and operations for Pix, told the newswire. “But in terms of magnitude, it surprised us.”

Yet, the crime has spiraled so much that kidnapping is becoming a method through which criminals simply march their victims to ATMs and force them to transfer their accounts’ holdings via the app.

Person to person transfers are now a ripe target — and faster payments, as they say, equals faster fraud. Any interruption, no matter how short lived, may hinder trust and momentum, and that may prove a headwind for firms seeking to boost real time payments adoption in Brazil.

As an example, Singapore-based global payments company Thunes recently teamed up with Brazil-based international digital payments platform Bexs Banco to further real-time payments to Brazil.

See also: Bexs Banco-Thunes Collaboration Brings Real-Time Payments to Brazil

The partnership brings increased speed and transparency to inbound transactions for Brazilian recipients through Thunes, and the more than 112 million Pix users will receive instant payments and interoperability between Brazilian banks and FinTechs.

“We were the first payment provider in Brazil to integrate the Pix technology into cross-border transactions,” Luiz Henrique Didier Jr., CEO of Bexs, said in the December announcement between the companies. “We now operate with Thunes, which processes payments for global players across multiple big techs, digital banks, and international remittance platforms.”

A throttling back on Pix instant payments might be do much to address security concerns, but a chilling effect might be widespread.