What Is Pix and How Does It Work?

How Does Pix Work?

Pix operates through a centralised system managed by the Central Bank. It consists of two main components: the Instant Payment System (SPI) for settlement and the Directory of Transactional Account Identifiers (DICT) for linking Pix keys to user accounts.

To use Pix, individuals and businesses must register one or more Pix keys, which act as aliases for their accounts. These keys can include email addresses, phone numbers, CPF/CNPJ numbers, or randomly generated codes. Each individual can register up to five keys, while businesses can have up to 20.

The transaction process is simple:

1. The sender selects a Pix key or scans a QR code.
2. The system queries the DICT to confirm the recipient’s account.
3. The SPI settles the transaction instantly.

Pix’s combination of centralised management, user-friendly design and broad access has made it a global model for instant payment systems.

Key Features of Pix

Speed and Convenience

Pix offers fast  transaction processing with near-instant settlement. Payments are processed in seconds, with immediate confirmation and the system operates 24/7, including weekends and holidays. This constant availability has revolutionised how Brazilians manage their finances. Transactions are completed instantly, regardless of the time of day or the financial institutions involved, making it a far more convenient option than traditional systems like DOC and TED.

Low or No Cost

One of Pix’s advantages is its cost-effectiveness. For individuals, transactions are typically free or incur minimal fees. The Central Bank of Brazil sets fee ceilings and prohibits consumer surcharges, making Pix an affordable option for everyday transactions. For businesses, Pix offers much lower fees compared to traditional payment methods. Pix transactions cost merchants less than credit card processing fees, helping businesses cut transaction costs.

Accessible and Connected 

Pix is designed for broad fit and smooth connections across Brazil’s financial system. Participation is mandatory for all eligible financial institutions, establishing widespread adoption that includes traditional banks and fintechs. This open-access model allows users to send money to any Pix-enabled account, regardless of the banking provider, through  a universal network. The system integrates with various banking apps and platforms, making it accessible to a broad range of users, including those in underserved and unbanked communities, contributing to increased financial inclusion across Brazil.

Security Measures

Security is central to Pix’s design. The system uses end-to-end encryption, multi-factor authentication and real-time risk monitoring to protect users’ transactions and data. The DICT adds an extra layer of security by masking underlying account details. Pix also features proactive fraud prevention mechanisms and quick blocking capabilities, allowing for fast response to suspicious activities.

Versatility

Pix supports a wide range of use cases: it can be used for peer-to-peer transfers, business-to-business payments, government transactions, utility bill payments and social benefits disbursement. The system is flexible enough to integrate with existing payment infrastructures and eCommerce platforms. 

Benefits for Individuals and Businesses

Better for Consumers 

Pix has transformed financial transactions for individuals in Brazil, offering accessibility, convenience and making a significant impact on financial inclusion. According to the International Monetary Fund, by December 2022, Pix had facilitated transactions for 71.5 million individuals who had not made any electronic credit transfers. Pix is bringing millions of previously unbanked or underbanked Brazilians into the formal financial system, including those in rural areas.

The simplicity of Pix transactions is key to its widespread adoption. Users initiate transfers using simple identifiers like email addresses or phone numbers, eliminating the need for complex bank details. Although users must register their Pix keys with their financial institution, this step is quick and straightforward. The instant nature of transactions increases the appeal of everyday financial activities.

Cost savings are another significant benefit for individual users. Pix transactions are typically free or incur minimal fees. Unlike traditional bank transfers, which may take days to process, Pix transactions are settled instantly, providing users with immediate access to their money. This feature is particularly valuable in emergency situations or for managing day-to-day expenses more efficiently.

Modern Advantages of Pix for Business

Immediate settlement of Pix transactions has revolutionised cash flow management for businesses. Pix’s 24/7 availability supports businesses operating outside traditional banking hours. This round-the-clock service enables companies to process transactions at any time without delays. This flexibility has been especially valuable for eCommerce businesses and those in the service industry. 

The system’s open infrastructure and widespread adoption have simplified integration with existing payment systems. Many businesses have found it easier to incorporate Pix into their operations compared to more complex traditional payment methods. While integration typically requires collaboration with financial institutions or payment processors, the process is generally straightforward and has helped companies of all sizes modernise their payment processes.

Pix in eCcommerce and Retail

Pix has transformed the eCommerce and retail sectors in Brazil.. Many online retailers have reported significant reductions in cart abandonment rates after integrating Pix as a checkout option.

Small businesses, especially those in remote regions, have experienced a notable surge in online transactions after adopting Pix. This has been particularly impactful for merchants who previously didn’t have access to credit card processing hardware.

During high-volume retail seasons, Pix has demonstrated its strength and efficiency. On December 20, 2024, Pix set a record of 252.1M transactions in a single day, showcasing its capacity to handle peak shopping periods. The system’s ability to settle transactions instantly has allowed eCommerce merchants to process orders and handle refunds faster than traditional card payments, leading to improved customer satisfaction.

Pix’s influence extends beyond transaction numbers. It has played an important role in driving digital inclusion, allowing many Brazilians previously excluded from eCommerce due to a lack of credit cards to participate in the digital economy. This has expanded the potential customer base for online retailers and opened up new market opportunities.

As Pix continues to evolve, with features like instalment payments (Pix Parcelado) set to launch in September 2025, its impact on eCommerce and retail is expected to grow.

Pix’s Transformative Nature

Businesses entering the Brazilian market, whether through Pix or other Brazilian payment processors, have clear advantages: widespread adoption, low transaction costs and instant settlement. International companies can now integrate Pix without the need to establish a local Brazilian entity, facilitating smoother cross-border transactions.

Looking ahead, Pix’s influence on global payment trends continues to grow, with other countries exploring similar systems. Whether you need to accept payments from one country or worldwide, Rapyd makes it easy. With card acquiring plus local payment methods, your checkout flows smoothly for customers, helping you increase revenue.