PIX Payments
PIX is an instant payment platform created by the monetary authority of Brazil. It enables the quick execution of online payments and money transfers. The solution is becoming increasingly popular in the financial services industry, including as a deposit option at trading brokers. This review is an introduction to the PIX payment system and will focus on its use in trading. We will cover how to make a PIX payment, brokers offering the solution, typical transaction times, fees and more.
Brokers in United States with PIX Payments
How PIX Payments Work
History
Payment by PIX is a relatively new gateway solution, established in November 2020. The method was developed by the Central Bank of Brazil with the hope to modernise the digital infrastructure in the country and bridge the gap between existing payment solutions. Importantly, instant transactions via PIX allow 24/7 fund transfers without the need for intermediaries. In the next 10 years, it is expected to outperform established credit transfer methods in Brazil, such as TED (Electronic Funds Transfer) and DOC (Credit Transfer Documents).
In its first year, the service was used at least once by over 100 million Brazilian citizens initiating almost $90 billion in transactions. In July 2021, the company saw over 40 million payment transfers in just one day, beating its previous record.
PIX has become a leading payment method in Brazil with a positive uptake from merchants integrating its services. These include trading brokers, energy companies and food services.
What Is It?
PIX allows fast money transfers via smartphones. Instant payments are bought to life through e-wallets and QR code links. Customers, including traders, can request a fund transfer via personal information sharing, known as keys, rather than having to add lengthy bank account details. Accepted keys include a phone number and email address.
Transfers and payments are enabled in-real time, 24/7. However, the gateway is currently only available to the Brazilian population for local transactions. Importantly, PIX aims to reduce the country’s reliance on cash dealings while offering an alternative to prominent methods such as Boleto and bank slips.
Transaction Times
Fund transfers to swing trading accounts via PIX are generally fast. Transactions are confirmed instantly and processing occurs within ten seconds which is much quicker than Google Pay. However, your broker may have specific processing timelines which can cause delays in funds reaching your account.
eToro offers instant account funding for all e-wallets. Withdrawals, however, can take up to one working day to receipt back to the original payment method. Nevertheless, this is a much quicker alternative to Brazilian standard bank transfers, which take up to five days. A significant benefit of PIX payments is also that transactions are processed on the weekends and public holiday dates.
Pricing Review
PIX is a free payment option for most users. Trading brokers are charged a flat fee per successful transaction, however, this is much lower than implementing traditional solutions. The payment method offers merchants immediate availability of funds, automation and simple checkout functionality.
It is also worth checking your broker’s deposit and withdrawal rates as they may not absorb all charges. Exchange rate fees may apply if you are funding an account outside of the accepted base currency, for example. The Brazilian real is not a common base currency for many international stock and forex brokers, so this is something to bear in mind.
Security
PIX is a secure payment method, making it easy for customers to deposit and withdraw from trading accounts with confidence. End-to-end traceability is enabled, with all transfers certified and verified by the Brazilian Financial System Network (RSFN). This is a data communication structure managed by the Central Bank of Brazil. Payments are also protected by the relevant security levels implemented by the bank, including general data protection laws and anti-money laundering schemes.
In addition, PIX transactions are protected by cryptography and authentication features, including 2FA, face recognition and PIN verification. QR codes are also unique and interoperable. Full bank account details do not need to be shared.
Transactions are enabled through identity keys such as an email address or phone number. There is also a requirement for all merchants to implement a cross-validation process of personal keys to verify all new users. Therefore it is not uncommon for a verification code to be required when signing up with a new broker. This is simply to confirm your identity and to ensure no fraudulent activity is occurring.
Note, payment confirmation receipts are provided to both the payer and the payee.
Pros of PIX Payments for Traders
Benefits of trading with PIX payments include:
- No Fees – Individuals can use this payment method free of charge, an advantage vs traditional methods including bank wire transfers and credit cards. With that said, always check your trading broker’s additional charges before making a deposit
- No Registration Or Bank Account Needed – Customers do not need a bank account to pay with PIX. All transactions are completed via the e-wallet with identifiable keys including an email address and phone number. A QR code is also provided instantly to fund accounts
- Secure Transactions – The payment solution implements various security features. Transfers are certified by the Brazilian Financial System Network (RSFN), with data protection protocols managed by the Central Bank of Brazil. The solution works with interoperable QR codes and allows users to apply authentication features including 2FA and biometrics
- Accessibility – PIX offers instant transactions so traders can be assured of a reliable deposit option. The solution is available 24/7, 365 days a year. It is also easy to fund trading accounts via scannable QR codes. In addition, you can make payments directly from a smartphone device
Cons of PIX Payments for Traders
Disadvantages of trading with PIX include:
- Payments Cannot Be Cancelled – As PIX transactions occur in real-time, payments cannot easily be cancelled. Refund dispute times can be lengthy. With this in mind, always double-check the payment amount before confirming transfers
- Links To Crime – The Sao Paulo Legislative Authority has recently proposed a suspension of the payment method due to its link with increased crime rates. PIX has already seen transaction limits implemented on fund transfers made overnight and weekends due to it sometimes being used as a ransom tactic
- Fraud Concerns – Being a digital payment method can be an issue due to the potential of targeting inexperienced digital natives. Phishing sites can act as legitimate web pages to retrieve personal data ‘keys’ or provide fake QR codes. Given this, it’s increasingly important you complete the relevant cross-validation checks when signing up with a new broker
- Available To Brazilian Residents Only – A major limitation of PIX payments is that it is only available to Brazilian residents, ruling out global investors. International brokerages can accept payments made via the method but costly exchange rate conversions may apply
How to Make PIX Payment Deposits & Withdrawals
Swing traders do not need to open a bank account to use PIX – services are facilitated through an e-wallet only. Simply look out for the brand’s logo within your broker’s account funding section.
The deposit process to trading accounts may vary depending on your device. For desktop, select PIX on the broker’s deposit page. A QR code will be displayed on the screen, often embedded within the same interface. Simply scan the QR code on your mobile device, confirm the transaction and authorisation details will be provided on screen.
If you are depositing from a smartphone, follow the same process but rather than scanning the code, copy the unique reference and paste this on your broker’s interface to finalize the payment. Take care to check transaction amounts before confirming. Note, brokers may also have their own minimum or maximum deposit limits.
Although PIX processes payments quickly, the time taken for funds to show in your trading account will vary by broker and currency. The Brazilian real is not a commonly accepted base currency so exchange rates and delays may occur.
Verdict
PIX is a relatively new payment service offering secure transactions. We were pleased with the accessibility, safety features and zero bank account registration requirements. With that said, as a payment solution only available to Brazilians, some international trading brokers choose to offer more inclusive account funding methods. Use this guide to start trading with PIX payments today.
FAQ
Is PIX Available To All Traders?
No, the PIX instant payment method is available to residents of Brazil only. Check the brand is listed as an accepted deposit method before opening a live account with a broker.
What Are The Different Keys I Can Link To My PIX Account?
The address key is a way to identify each individual customer’s account. There are four accepted methods; phone number, email address, random key (random numbers, letters and symbols), or CPF/CNPJ.
Is It Free To Fund My Trading Account With PIX?
The PIX payment solution does not charge customers a fee to use the service. Brokers may be charged a merchant fee, however, so it is always worth checking your broker’s deposit and withdrawal rates as they may not absorb all charges.
Are PIX Payments Safe?
PIX has implemented several security features so traders can be confident when funding accounts. All actions are overseen by The Brazilian Financial System Network (RSFN). The method also integrates interoperable QR codes and allows authentication features to be added, including 2FA and biometric identity validation.
Are PIX Payments Fast?
PIX supports instant transactions which can be executed 24/7, 365 days a year. Funds can be receipted to your swing trading account within ten seconds. Remember, your broker may also have their own processing timelines which could cause delays.