PYMNTS Intelligence: How Brazil Serves as a Payment Innovation Blueprint for Latin America

Kushki - Digitizing Payments In Latin America - April 2022 - A new look at why Brazil is emerging as a payments innovation leader in Latin America

Kushki - Digitizing Payments In Latin America - April 2022 - A new look at why Brazil is emerging as a payments innovation leader in Latin America

Digital payments are becoming more popular all over the world, especially as the number of banked individuals continues to grow and digital banking becomes the primary way individuals interact with their financial institutions (FIs). A survey found that around 90% of bank customers in Latin America leverage some form of digital banking, with Brazil taking the top slot at 98%, and Mexico and Colombia both following close behind at 94%.

Brazil’s lead in digital banking carries over to its digital payments adoption as well. The Brazilian government and central banking system are harnessing this digital innovation with their own instant payments platform, Pix, which is now used by more than half the country’s consumers. Other forms of digital innovation, such as cryptocurrency, are also seeing widespread adoption.

The prevalence of digital payments in Brazil makes the country a prime example of the technology’s upward potential in Latin America. This month, PYMNTS Intelligence explores how systems such as Pix and cryptocurrency have made Brazil a regional payments leader.

Centralized Digital Payments

The cornerstone of Brazil’s digital payments innovation is Pix, the instant payments platform powered by the Central Bank of Brazil. The system, which has been described as “a government-built version of Venmo,” was launched at the end of 2020 but quickly ballooned in popularity, in large part due to its simplicity and ease of use. Six out of 10 Brazilians use it on a regular basis, and 2021 saw more than 8 billion transactions recorded on the platform. Another sign of its popularity is the fact that 59% of Brazilian consumers said they had given up on an online purchase because of a lack of digital payment options. Only 18% said they did not understand the appeal of instant payments when shopping online.

Pix has been well-received among consumers, but merchants have been slower to adapt. Just 32% of eTailers in a survey said they offered Pix payments, with another 16% saying they would offer the payment method were it not for technical difficulties with integrating it into their existing transaction processing systems. Other companies are working on solutions to help these retailers enable Pix payments on their platforms, but it is still a small minority of businesses that cite technical difficulties as their main obstacle. Credit and debit cards remain the preferred payment method among Brazilians at 28%, with Pix following at 22%, so many businesses are staying the course for now.

Pix is not the only new payment method quickly gaining traction, however. More exotic transaction methods such as cryptocurrency are also gaining steam, and Brazilian regulators are working overtime to adjust to the new normal.

Cryptocurrency and Regulation

Brazilians purchased more than $4 billion in cryptocurrency last year, according to a report from the Central Bank of Brazil. Reasons for purchasing cryptocurrency varied, according to a survey from, with 66% of Brazilians saying they purchased it as an alternative investment option. One-third of respondents said they purchased it to protect their assets from economic instability, 31% said it was to diversify their financial portfolios and 25% wished to protect themselves from government intervention. Just 12% said they wished to use cryptocurrency for money transfer or payments, however.

Despite this lack of interest in its use for actual payment purposes, Brazilian nonowners are quickly warming to the idea of cryptocurrency investment. The survey found that 59% of consumers who did not have cryptocurrency planned to purchase some within the next 12 months.

This steadily growing interest in cryptocurrency is forcing government entities to implement regulatory measures for the first time. The Brazilian senate unanimously passed a bill this February that would create rules for digital currency funds, define digital assets and classify service providers, giving the government the authority to regulate the industry. The bill also requires cryptocurrency exchanges to prevent money laundering and asset concealment, with the goal of curbing a vital source of funding for criminal and terrorist organizations.

This bill still needs ratification from the lower house and the president before it becomes law, but its passage would mark the first legislation of its type in all of Latin America. This regulation, along with government-backed digital payment systems and other electronic payment innovations, solidifies Brazil’s role as a leader in the Latin American payments ecosystem.