Pix appeared on the market in 2020 as an option that would do away with bank transfers via DOC and TED, facilitating people-to-people payments. As a result, these options for sending funds that previously guaranteed fees to banks have seen a decline in importance. Now Pix can make another sacrifice, this time in e-commerce: payment by bank confirmation.
For retailers, Pix not only has the potential to reduce or even replace boleto, but also increase e-commerce sales and reduce churn. According to the Brazilian Association of Electronic Commerce (ABComm), slip payments are not made 50% of the time.
Also, the lack of flexibility in payment can lead to an abandoned cart. According to payment company Adyen, 52% of Brazilian consumers say they have abandoned a purchase because they couldn’t pay the way they wanted.
According to the GMattos Payment Study, just two years after its launch, Pix is already the second most used payment method, next to bank confirmations. Pix adoption has the potential to reach 92% in the coming years, the consultancy predicts. As of January 2021, Pix had 16.9% adoption among Brazilian e-commerce; in July this year it reached 76.3%
At Mercado Livre, Pixo adoption increased by around 130% and caused a 33% decrease in the use of boletos in the second quarter, compared to the same period last year. On the platform, official stores of brands such as Samsung, Nike and Hering already accept payments via Pix.
With 30 million active users and 10 million sellers, Mercado Pago, a digital bank from the same group as the Argentine retailer, provides a payment system for physical and digital stores and already has a quarter of all transactions made through Pix. In addition to a few online stores, the company makes payments via Pix in pharmacies of the Pague Menos chain and in physical C&A stores.
Daniel Davanço, head of payments for Mercado Pago companies in Brazil, estimates that this year the sales of merchants who accept Pix have grown 20% to 25% more than those who still did not have Pix as a means of payment. “Pix’s conversion today is over 75%. The online world has embraced Pix very quickly, as it has improved the experience for all parties,” he says.
Retailers such as Via (formerly Via Varejo) have been offering Pix payments since last year, including physical stores Casas Bahia and Ponto. Recently, the company began using Pix to facilitate settlements in debt renegotiation cases.
Luiza magazine, on the other hand, offers payment via Pix on its website and application, but also invests in its alternative. The company has created, within Fintech Magalu, a payment system that promises to be faster and more convenient than Pixo because it doesn’t require consumers to access a banking app or copy and paste barcodes.
Transfers are made through the Initiator of Payment Transactions, a modality offered by the Central Bank that enables the integration of websites and applications of retail companies with banking systems, in the concept of “open finance”. The payment method was implemented on the KaBuM website, which sells electronics and was bought by Magazin Luiza in 2021 for about BRL 3.5 billion.
Robson Dantas, Head of Fintech Magalu operations, sees the potential for the payment initiator to be simpler than Pixo for online payments and to further reduce purchase withdrawals. “The experience makes the user’s life a lot easier, but this tool still has a long way to go to get to where we are with Pixo,” he says. Mercado Pago and major retailers in the country are also already testing the payment initiator.
The boleto should still survive as the Pix becomes more common among Brazilians, but it could become a niche option. In addition to reducing churn, Pix should be encouraged by lower merchant fees than other payment methods. “Taking 0.1% off the value of a retailer’s sales can translate into millions in gains,” says Lorain Pazzetto, head of open finance at retail technology firm Grupo FCamara.