Pix Is a Latin American Success Story, Not a Trade Offense

Latin America has struggled with limited banking access and fragmented, costly payment systems. The region’s instant payment systems include Brazil’s Pix, Mexico's CoDi, El Salvador’s Transfer 365, and Bolivia’s QR BCB.

By Jeff Alvares

In July, the U.S. government launched a trade investigation into Brazil’s Pix instant payment system, alleging it unfairly disadvantages American firms like Mastercard and Visa. The complaint, which emerged amid broader political tensions between the two countries, reflects a deeper misunderstanding: Public digital infrastructure like Pix doesn’t distort markets—it empowers them.

Financial Infrastructure Is Not a Trade Barrier

Pix is not a trade barrier. It’s a model for how emerging economies can leapfrog outdated financial infrastructure to promote inclusion and innovation. It shows how central banks, acting in the public interest, can resolve coordination failures that markets alone struggle to address, building systems that reduce costs, expand access, and give the private sector room to thrive.

Central banks worldwide already operate core financial infrastructure, from currency issuance to interbank settlement platforms. Instant payment systems are a natural extension of that role, bringing efficiency and access to retail payments. More than 70 countries have implemented such systems, with the Bank for International Settlements (BIS) actively encouraging central bank leadership, particularly where market incentives are misaligned with public needs.

A Solution to Market Failure

Launched in 2020, Pix has transformed Brazil’s financial landscape. More than 160 million Brazilians, around 90% of adults, use it to send real-time payments 24/7, at no cost to individuals and small businesses. Pix now handles more transactions than credit and debit cards combined. The BIS, International Monetary Fund, and World Bank have praised it as transformative for financial infrastructure and inclusion.

This success didn’t happen overnight. For years, Brazil’s central bank had urged private firms to develop real-time payments, similar to how U.S. banks created Zelle. But the private sector lacked incentives. Incumbent institutions had little reason to invest in a system that could cannibalize lucrative card and transfer fees. The result was a fragmented and costly payment environment that excluded many.

Public Rails, Private Trains

The Central Bank of Brazil stepped in not to displace the private sector, but to enable it. It built core infrastructure, defined open standards, mandated participation by major financial institutions, and required that basic services be free to users. Crucially, the central bank itself does not provide end-user services. Instead, it laid the tracks—public rails—so that private banks and fintechs could run their own trains, competing through user experience, cost, and innovation.

This design unleashed competition. Digital banks and payment startups rapidly gained market share by offering smoother and cheaper services. Pix didn’t eliminate private options—it pushed them to improve.

Consider WhatsApp Pay, launched in Brazil around the same time as Pix and backed by Mastercard and Visa. Unlike Pix, it relied on slower and costlier card-based infrastructure. Consumers overwhelmingly chose Pix. That wasn’t state overreach—it was the market working as intended, once frictions were removed.

A Regional Wave of Innovation

Brazil’s experience with Pix offers a blueprint for Latin America. For decades, the region has struggled with limited banking access and fragmented, costly payment systems, particularly for lower-income households and small businesses. Pix shows how central banks can tackle these challenges head-on.

Other countries are taking note. Mexico rolled out CoDi, its instant payment system. El Salvador has launched Transfer 365. Bolivia’s QR BCB is expanding mobile-based transfers. These efforts reflect a regional shift toward inclusive, interoperable financial infrastructure built on public coordination and private delivery.

The ripple effects extend beyond payments. In Brazil, Pix has enabled new business models, from street vendors accepting digital payments to cross-border e-commerce platforms. Small businesses that previously operated entirely in cash now participate in the formal economy, accessing credit and expanding their customer base.

The U.S. Should Learn, Not Litigate

U.S. policymakers should be asking why their financial sector remains dominated by legacy systems. Many consumers still rely on paper checks. Credit card interchange fees, among the world's highest, disproportionately burden small merchants. Zelle, the country's most prominent instant payment tool, is limited to participating banks and excludes many smaller institutions and credit unions.

The Federal Reserve’s FedNow system, launched in 2023, is a promising step. Yet, adoption is voluntary, and participation remains modest—only about 15% of eligible institutions have joined. Pix succeeded in part because participation was mandatory, reflecting a policy decision to treat payments as critical infrastructure. FedNow’s opt-in model leaves modernization to the discretion of private actors, whose incentives may not align with national inclusion goals.

A Hemispheric Opportunity

Instead of treating Pix as a threat, policymakers across the Americas should see it as an opportunity to modernize regional financial systems and deepen economic integration. The G20 has called for reform, and the BIS has urged countries to interlink their fast payment systems.

Connecting Brazil's Pix with Mexico's CoDi, El Salvador's Transfer 365, Bolivia's QR BCB, and the U.S. FedNow could radically improve intra-regional commerce and migration-related transfers.

Such integration could transform trade finance, currently dominated by expensive correspondent banking relationships. Small and medium enterprises could access new markets without prohibitive transaction costs. Digital remittances could flow instantly at minimal cost, increasing the development impact of diaspora savings.

The Stakes for Regional Development

The U.S. trade investigation sets a troubling precedent. If successful, it could discourage governments across Latin America from pursuing public infrastructure solutions at a moment when digital transformation offers unprecedented opportunities to address persistent development challenges.

Central bank-operated payment systems are not trade barriers—they're public goods, like telecommunications networks or power grids, that enable private innovation. Using trade policy as leverage over domestic judicial matters, as appears to be the case with the Bolsonaro-related tensions, threatens the principle of sovereign policy autonomy that has enabled emerging economies to pursue independent development strategies.

Looking Ahead

Latin America has long been a laboratory for policy innovation, from Brazil's electronic voting systems to Mexico's conditional cash transfer programs. Pix represents the latest chapter in that tradition: a public-private platform that uses technology to deliver on development goals while strengthening rather than supplanting market competition.

As countries in the region build their real-time payment systems, the hemisphere faces a choice: deepen integration and cooperation around shared digital infrastructure, or allow political tensions to derail progress toward a more connected and inclusive financial future.

Rather than penalizing Brazil for getting this right, the United States should join the effort. American financial institutions could benefit from interoperability with fast, low-cost systems in neighboring markets. And U.S. policymakers, regulators, and technologists could play a vital role in helping shape the next generation of regional standards and governance frameworks.

The alternative—fragmenting digital infrastructure along political lines—serves no one's interests. Brazil's Pix should not be a source of conflict. It should be a source of inspiration for what's possible when public policy and private innovation work in concert to expand economic opportunity across the Americas.

Jeff Alvares is senior legal counsel at the Central Bank of Brazil. He previously served as legal counsel at the International Monetary Fund and as a member of the Financial Stability Board Secretariat. The views expressed here are his own.