Brazil’s Pix, one of the world’s most successful instant-payment systems, has become a flashpoint between Brasília and Washington as the Trump administration moves to shield US firms from the model’s growing appeal.
US Trade Representative Jamieson Greer named Pix, operated by Brazil’s central bank, as one of the trade barriers cited to justify fresh 25% tariffs on Brazilian imports taking effect this week.
“We’re not asking Brazil to get rid of Pix,” a senior Trump administration official said. But Washington wants to avoid a situation where “Pix gets special treatment simply because it’s owned and operated by the government.”
Brazilian officials have long argued the criticism is really about protecting US credit card companies. USTR documents say Brazil’s practices “may undermine the competitiveness of U.S. companies engaged in digital trade and electronic payment services.”
The dispute underlines the growing threat government-built payment infrastructure poses to the card networks’ decades-long dominance of global payments. Pix enables real-time transfers between accounts through banking apps, pairing free person-to-person payments with lower costs and faster settlement for businesses, bypassing much of the traditional card chain.
At a news conference last week, central bank chief Gabriel Galipolo dismissed complaints about Pix’s impact on card revenues as absurd. He said credit card use had risen in absolute terms because Pix pushed so many Brazilians to open bank accounts, and that Pix was a public service, not a competitor.
“It would be kind of like saying that creating basic sanitation hurt the revenues of those who own water trucks,” he said.
The central bank launched Pix in 2020. It overtook card transactions by its third year and now accounts for more than half of all transactions in Brazil by volume, with about 170 million users, or 80% of the population. Similar services exist elsewhere, including India’s UPI and FedNow in the US, but none has matched Pix’s uptake.
Through the first half of this year, Brazil’s central bank signed agreements to share information about Pix with 65 international counterparts, from Germany and Canada to South Africa and Turkey. “Pix is really a model and the direction everyone is moving toward,” Galipolo said.
Mastercard and Visa have both warned investors in securities filings that networks like Pix could challenge their business. The Information Technology Industry Council, a Washington trade group representing Visa, Mastercard, Meta and others, has pressed USTR for years to level the playing field for its members in Brazil, arguing Pix should face a more competitively neutral regulatory framework. Why the Trump administration acted now remains unclear. Visa, Mastercard and ITI did not respond to requests for comment.
Card volumes have kept rising in absolute terms after Pix brought more than 70 million Brazilians into the financial system. But credit cards’ share of transactions has fallen to about 15% from roughly 20% before Pix, while debit’s share has dropped to around 10% from about 26%.
The system also has room to grow beyond Brazil. Private companies have built infrastructure for Brazilians to use Pix abroad, including in the US, and for tourists to use it in Brazil. There are early signs that instant-payment systems from different countries could one day interconnect, adding to unease in Washington amid talk in major emerging economies of reducing dependence on the US dollar.
US officials have lately focused on criticising what they call a conflict in the Brazilian central bank’s dual role as Pix operator and regulator. A 2023 IMF paper contrasted Pix’s governance with systems in China and India, where operation and oversight are split. Asked whether Washington had proposed removing Pix from central bank control, Galipolo said it was hard to know exactly what the US was demanding, and argued the current structure keeps Pix a public platform open to all eligible participants.
The friction has handed President Luiz Inacio Lula da Silva a chance to rally support around a system popular with small merchants and informal workers. “No one is going to change our Pix,” Lula wrote on social media on Friday. “It’s public, it’s free, and it will stay that way.”
The Herald View: Washington is not fighting a Brazilian app. It is fighting a template. Pix has shown 65 central banks that a state-run rail can strip the card networks out of domestic payments in three years, and tariffs do not un-teach that lesson.