Pix and the new competition for digital economy infrastructure
US criticism exposes competition that is no longer just between companies, but also between the foundations supporting them.
The debate sparked by the United States government’s criticism of Pix reveals a more significant issue than a potential trade dispute between Brazil and American companies. More than a discussion about a specific payment method, the episode highlights an ongoing transformation in the digital economy: competition no longer occurs only between companies, but also involves the infrastructures on which they operate.
For decades, payment systems evolved mainly through private-sector activity. Cards, acquirers, banking networks and different arrangements competed to offer greater efficiency, security and convenience. This dynamic continues, but has gained a new component: in various countries, central banks have begun developing public infrastructures capable of reducing costs, increasing transaction efficiency and stimulating innovation throughout the financial ecosystem.
Alongside Open Finance, Pix is an important example of this movement. Its main innovation was not eliminating intermediaries or replacing private companies, but creating common infrastructure, available 24 hours a day, seven days a week, open to any institution authorized by the Central Bank and capable of processing payments in seconds. As public infrastructure, its role is not to compete with market participants, but to offer a common foundation on which different institutions can develop products, services and business models. Rather than benefiting one particular participant, Pix reduced operating costs for the entire ecosystem.
Nor does the system prevent foreign companies from operating. International institutions meeting regulatory requirements can participate on equal terms, and global technology companies have already incorporated Pix-related features into the products they offer in Brazil.
The economic consequence of this change, however, is inevitable. When infrastructure becomes significantly more efficient, previous models lose ground because they cease to be the most advantageous alternative for consumers and companies. With Pix, public infrastructure raised the efficiency standard for electronic payments. If certain business models now face greater competitive pressure, this results from the innovation enabled by infrastructure, not from the deliberate exclusion of competitors.
This debate, incidentally, is far from exclusive to Brazil. India developed UPI, now one of the world’s largest instant payment platforms. The European Union is advancing its own real-time payment systems. Various countries are discussing central bank digital currencies, digital identities and public platforms for securely sharing financial data.
There is a reason for this: digital infrastructure has become a factor in national competitiveness, just as highways, ports, electricity and telecommunications were at other historical moments. The lower the cost of conducting a transaction and the greater the interoperability between participants, the greater the economy’s productivity tends to be.
The future of competition will depend not only on companies’ ability to innovate, but also on the quality of the infrastructures on which innovation occurs. Countries able to build open, interoperable, secure and low-cost platforms will create environments more favorable to entrepreneurship, competition and the development of new services, regardless of the nationality of the economic actors operating within them.
The episode involving Pix thus demonstrates that the payments debate is no longer limited to the instruments used to transfer funds. It now involves the very infrastructure sustaining the digital economy. Understanding this transformation is essential for formulating public policy, stimulating innovation and strengthening competitiveness. After all, in an increasingly digital economy, infrastructure quality stops being merely an operational requirement and becomes a strategic asset for economic development.
Executive director of the Brazilian Association of Banking as a Service (ABBAAS).
📌 Originally published in JOTA