BRAZIL Trends and Developments Contributed by: Thomas Gibello Gatti Magalhães, André Dágola Brostoline and Luisa Grespan Danhoni Neves, Magalhães & Zettel
The Future of the Brazilian Financial System: Innovations, Regulations and Challenges Evolution of the Brazilian payment system from SPB to PIX Since the 1990s, Brazil has had an integrated, computerised, agile and secure payment sys - tem, called the Brazilian Payment System (SPB), under the supervision of the Central Bank of Bra - zil (BCB). SPB applies to several public and pri - vate entities, allowing economic agents to carry out financial transactions with each other. SPB consists of a set of rules, systems, stand - ards and procedures related to the processing and settlement of resource transfer operations and transactions with foreign currency or with financial assets and securities, enabling the transfer of resources, whether in national or for - eign currency, carried out by individuals, legal entities and other entities. Designed and established in 2002, SPB includ - ed an innovative feature in the implementation of the Reserve Transfer System (STR), which allows the transfer of funds between the finan - cial institutions participating in SBP. Therefore, inter-bank transfers are settled by STR, through an Inter-bank Payment Chamber (CIP), and dis - tributed among the financial institutions of origin and destination, or go through the Checks and Other Papers Clearing House (COMPE). This SPB design made it possible to improve the efficiency of already established means of pay - ment, such as cheques, credit cards and bank slips, but it mainly made it possible to create the DOC (Credit Document), TED (Wire Transfer of Available Funds) and DDA (Authorised Direct Debit), which are means of payment by wire transfer but not instantaneously; depending on the modality, the clearing could take from one to three days.
Following this evolution, BCB started to oper - ate the Instant Payment System (SPI) in 2020, which is the centralised and unique infrastruc - ture for settling instant payments. This system processes and settles instant payments made by participants to specific deposit accounts that financial institutions maintain within BCB. It is noteworthy that these accounts cannot receive overdrafts and, therefore, there are no transfers without the respective bank balance, avoiding possible systemic risks. An instant payment made from one user to another within SPI is called PIX in Brazil, and is a broad, uninterrupted means of payment that can occur 24 hours a day, seven days a week, in which the payer immediately transfers to the recipient the funds involved in an electronic transaction. It is noteworthy that these instant transfers of amounts occur with only one key – most com - monly with the completion of the recipient’s data, such as mobile phone number, e-mail, Individual Taxpayers’ Register (CPF) or National Register of Legal Entities (CNPJ). They occur through the reading of QR-Codes (either static, which are used in multiple transactions, or dynamic, which entail an exclusive use for each transac - tion), and through NFC Technology, accessed in the mobile application or through internet bank - ing, or even in the ATMs of the financial institu - tions in which the user has a bank account. After successive and continuous evolutions, PIX currently allows several types of financial trans - actions between its users, such as: • transfers between people; • payment of commercial establishments, including physical stores and electronic com - merce;
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