PagBrasil’s Compliance-First Approach Fast-Tracks Payment License

The need for speed and digital tools has become essential to the Latin American banking experience. Case in point: As detailed in PYMNTS’ recent exclusive sweep of 11 countries’ digital engagement, “How The World Does Digital”, more than 55% of the Brazilian population engages in the top 10 measured digital activities at least weekly, including mobile and online banking. And companies like Mercado Libre and PagBrasil have taken that need for speed to the rest of the region, expanding with innovations in instant and cross-border payment. For online banking provider PagBrasil, the need for speed has now extended to a new area: a full Payment Institution (PI) license from the Central Bank of Brazil.

This milestone, which was achieved in record time, positions the company to expand its innovative payment solutions and solidify its role in the global digital payments ecosystem. And as co-CEO Ralf Germer told PYMNTS’s Karen Webster recently, the swift approval is a testament to PagBrasil’s proactive approach to compliance and regulatory demands in the region, and will open up new avenues for PagBrasil to innovate and expand its product offerings. One immediate benefit is the removal of transaction limits on its existing products. Additionally, the license allows PagBrasil to offer cash withdrawals through Pix, Brazil’s instant payment system, at ATMs worldwide. This feature was previously unavailable without the license, according to Germer.

The Orchestration Economy

The PagBrasil business model was complicated even before the new license. It has established itself as a leading LatAm FinTech company, processing payments for eCommerce businesses globally. The company’s focus on innovation has also led to the development of unique products such as International Pix and Pix Roaming. International Pix allows Brazilian travelers to use Pix for payments abroad, while Pix Roaming enables foreign visitors to use Pix within Brazil. These solutions leverage Brazil’s widely adopted Pix system, which boasts 151 million active users, representing about 70% of the country’s population.

Here’s what a breakdown of those products, looks like:

PagBrasil Pix: This is their core Pix payment solution for domestic transactions within Brazil. It allows merchants to offer Pix as a payment method, enabling customers to make instant payments by scanning a QR code or using a Pix code.

International Pix: This solution extends Pix functionality to allow Brazilians to make payments abroad using QR codes. It works by generating a QR code that can be scanned by the customer’s Brazilian banking app, with real-time currency conversion.

Pix Roaming: This product enables foreign tourists in Brazil to make Pix payments using QR codes. Visitors can scan the QR code using their own digital wallets or bank apps, with PagBrasil handling the currency conversion.

That business model relies heavily on what Webster calls the orchestration economy. As she wrote at the beginning of 2025, “at the start of 2020, we observed the convergence of single apps into ecosystems accessible through a single, digital front door. The rise of the connected economy for consumers, fueled by the global pandemic, meant downloading a single app like Instacart to order food and other essential items from dozens of stores or using their Uber App to book a ride, rent a car and have food delivered. At the halfway mark, (of the decade) we see that convergence intensifying — and the rise of what I call the orchestration economy, changing how businesses interact with each other and how services and capabilities will be accessed and delivered.”

Germer agreed that his company’s business model relies heavily on the orchestration economy, connecting with acquirers worldwide to offer Pix as a payment option alongside traditional methods like credit cards. “We connect into their platforms so that the merchant can offer payments with the same POS device apart from credit card processing, processing Pix at the same time,” Germer told Webster.

This approach allows PagBrasil to rapidly expand its reach without the need for direct merchant relationships. The company is seeing growing adoption of its International Pix solution, with transactions ranging from small purchases like coffee to luxury hotel bookings worth tens of thousands of dollars, he said.

Germer observes a shift in payment preferences among Brazilian travelers. “People get used to doing all their transactions with Pix. And when they travel abroad they want to pay the same way they’re used to paying in Brazil,” he said. This trend is challenging traditional payment methods like cash, cards and prepaid travel packages. Germer notes that while some digital wallets are still used, they are often linked to cards, which Pix is increasingly replacing.

Connecting Digital Wallets

PagBrasil, by the nature of its business model, is heavily invested in digital wallets. Looking at the broader payments landscape, Germer sees a future where digital wallets become increasingly interconnected globally. “We see that this is going to happen in Latin America and maybe even on a global level so that you will have the possibility with your banking app or your digital wallet to travel around the world and pay with a QR code wherever you go,” he said.

However, Germer doesn’t envision PagBrasil becoming a consumer-facing brand like PayPal, even with the new Brazilian license. “This is not in our plans that we become a company that has a contractual relationship basically with the consumer,” he said. “We will continue being an infrastructure provider.”

PagBrasil’s focus for the near future is on expanding its existing products to more markets and banking partners. The company is also working on adapting its technology to suit different cultural norms around payments, such as tipping practices in various countries.

Looking further ahead, Germer sees potential in the upcoming Pix Garantido (Guaranteed Pix) system. This Central Bank initiative will enable banks to guarantee future payments, potentially revolutionizing installment purchases and credit offerings in Brazil. Developed by the Central Bank of Brazil, this feature could impact purchasing habits in the country by allowing consumers to split their payments over time, similar to credit card installments. The system works by having the consumer’s bank guarantee future payments to merchants, effectively reducing the risk for sellers. Merchants benefit from receiving the full payment upfront, while consumers repay their banks in installments. Although the exact fee structure is yet to be announced, banks are expected to charge for this service to cover the associated risks. This expansion of Pix’s functionality is set to further transform Brazil’s digital payment landscape, offering more flexibility to consumers and potentially boosting sales for merchants.

“We won’t create something by ourselves. But it’s a product on the roadmap of the Central Bank,” Germer explains. “With that you can also offer payments in 30 days, 60 days, 90 days, or even more.”

With its newly acquired PI license and a robust pipeline of innovative products, PagBrasil is set to play a significant role in shaping the future of cross-border payments and the Latin American domestic economy.

“We are known in the market as the most innovative company, which is always at the edge of innovation in the market,” Germer told Webster. “And to be able to do that, we cannot have barriers of regulation that tell us we cannot do this, and we cannot do that because we don’t have a license.”