Why Pix beats credit cards as a payment method for your e-commerce
Pix use grew 74% last year, reaching 42 billion payments and moving R$18 trillion.
The arrival of Pix, Brazil’s instant payment system, revolutionized how people pay in Brazil, especially in e-commerce. Secure, fast and free, its use has been growing exponentially in online transactions, leading websites to add it as a payment method and treat it as a priority. Its use is also likely to grow with the launch of Pix Automático (automatic recurring Pix) by the Central Bank in October 2024.
Although credit cards are widely used, Pix has several advantages that make it a better alternative for many consumers and merchants. Here are some of the main reasons:
Immediate order settlement
One of the biggest advantages of Pix is transaction speed. While credit card transactions can take days to be processed and show up in the seller’s account, Pix makes transfers in real time, 24 hours a day, 7 days a week, including weekends and holidays. This improves merchants’ cash flow and offers more convenience and reliability to consumers, who receive their order confirmation number in seconds.
Low transaction cost
Credit card transaction fees can be substantial, including intermediation fees and monthly fees charged by card companies. Pix, on the other hand, has significantly lower costs for consumers and merchants alike. That can translate into more competitive prices and less of the profit margin absorbed by fees.
Pix costs retailers an average of 0.8% of each transaction, while debit card fees exceed 1% and credit card fees reach 2.2% of each sale in Brazil, according to an article by the Bank for International Settlements (BIS).
Security
Pix was developed by the Central Bank of Brazil and uses robust security protocols. The instant payment system also minimizes the retention of sensitive data, reducing the chances of the kinds of fraud common with credit cards. Transactions are authenticated directly with the banks, with no need for intermediaries.
Financial inclusion
Pix has made financial inclusion easier, allowing people without access to credit cards to shop online. All they need is a bank account, which significantly expands the potential consumer market for e-commerce businesses.
Flexibility of use
Pix can be used for many kinds of transactions beyond online shopping, such as person-to-person payments, bill payments and even instant transfers between different financial institutions. This flexibility broadens its usefulness and adoption.
User experience
Simplicity is one of Pix’s strengths. To make a payment, all you need is a Pix key (CPF, email, mobile number, etc.) or a QR code, which simplifies the user experience. It eliminates the need to enter multiple pieces of information, such as card number, expiration date and security code, making the payment process faster, more efficient and secure.
Conclusion
Although credit cards still have their place in e-commerce, Pix offers substantial advantages that make it superior in many respects. Its speed, low cost, security, potential for financial inclusion, flexibility and better user experience make it a preferred choice for consumers and merchants looking for convenience and efficiency in financial transactions.
