By Rajwa Quasim
Brazil’s government-run payment app has become the latest flashpoint in a dispute between Washington and Brasília, after the Trump administration cited it as one of the reasons for imposing 25% tariffs on Brazilian goods this week.
Brazil’s free payment app Pix is one of the most successful instant payment systems in the world which lets users send money at no cost. It has become widely popular since its launch in 2020. Now, more than 90% of Brazilians use it.
As per available data, Pix overtook credit and debit cards as the share of credit card transactions now accounts for 15% (from 20%) and debit card to 10% (from 26%) and has over 170 million users. This has drawn the Trump administration’s attention as it aims to protect U.S. firms from Pix’s growing appeal in dozens of countries.
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U.S. Trade Representative Jamieson Greer named Pix, operated by Brazil’s central bank, as one of the barriers to trade between U.S. and Brazil and cited it as a reason to justify fresh 25% tariffs on imports from the country.
A senior U.S. official said in a statement that the administration isn’t asking Brazil to scrap Pix altogether but wants to stop it from getting special attention simply because the government runs it. Washington also shares the idea that this could also put American payment companies like Visa and Mastercard at an unfair advantage.
Meanwhile, the central bank chief Gabriel Galipolo dismissed the complaints and said that the number of people using credit cards had increased in absolute terms because Pix pushed so many Brazilians to open bank accounts, and that Pix was a public service, not a competitor. He further added, “it would be kind of like saying that creating basic sanitation hurt the revenues of those who own water trucks.”
Brazilian officials are seeing it differently. They argue that the real goal is to shield U.S. credit card companies from competition. The country’s central bank says it isn’t competing with anyone, rather built a public service that made banking easier and cheaper so that anybody could use it.
Pix’s system does not distinguish between domestic and foreign participants. Any licensed institution in Brazil and operating there, including Visa and Mastercard, can connect to the network on equal terms.
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All banks operating in Brazil, whether domestic or foreign, with more than 500,000 account holders are required to offer Pix to their customers. However, payment processors such as Visa and Mastercard are not required to participate; they have joined voluntarily. If anything, Pix makes it easier for foreign payment firms to reach Brazilian consumers, not just the largest established companies.
Office of the United States Trade Representative (USTR) documents say that Brazil’s practices “may undermine the competitiveness of U.S. companies engaged in digital trade and electronic payment services.” But Daniel Santos Kosinski, a professor of economics at the State University of Rio de Janeiro, said that this idea rests on a misunderstanding of why Pix was created. Existing services charged fees for electronic payments, but Pix was designed to change that.
Brazil signed an agreement to share information about Pix with around 65 countries, including Germany, Canada, and Turkey. Galipolo considers this to be a model that everybody has their eyes on.
“No one is going to change our Pix,” Brazilian President Luiz Inacio Lula da Silva wrote on social media on Friday. “It’s public, it’s free, and it will stay that way.”