Brazil's Top 5 Payment Trends for 2024

The arrival of a new year is approaching and with it, new possibilities. Years pass but one characteristic remains. In order to evolve, companies must continually incorporate the latest features into their service portfolios and strive to modernize their internal processes. Talking about new payment technology for e-commerce and retail companies is rather common,but the finance of traditional companies or even the services sector is quite different. What we still see as the common method is the payment system that has fallen into disuse TED and DOC. TED had a 29% usage drop last year, while corporate transactions via Pix, for example, grew 105% according to the Central Bank of Brazil.

I had the opportunity to attend events related to the financial sector last year, such as Money2020 Europe and Global, Fintech Nexus US, Finance Executive Summit and more. My experience provided me with new perspectives on personal and corporate finance, international payments, credit movements, and transaction of digital assets. Plus, spending over a year observing regulations at Trio Payments headquarters has given me insight into some trends that are likely to become reality in the near future. Therefore, I would like to share some of them.

So stay tuned to big news for payments in Brazil in 2024:

1- Reconciled Pix

Issued, paid, and canceled. Just like "Boleto", the most popular way of charging in the past 20 years, but better: the seller gets paid instantly and it only costs a few cents. It's funny because when it comes to billing their clients, the financier is often terrified of Pix, because it misses the connection to the company's management system. But having a reconciled Pixis not as difficult as some dinosaurs may think! It has evolved to replace Boleto completely, mainly due to an imposition made on public concessionaires in 2023. Have you ever wondered how public concessionaires (electricity, water) send Pix codes on their bills, to millions of payers? They certainly don't search manually for the settlement of the payment amount.Still, your regular bank doesn't offer Pix Conciliado - because it doesn't earn much from it. Therefore, the following figure becomes more than necessary:

2- Payment Manager

Payment companies (called IPs in Brazil) have a window of opportunity opening in 2024. The figure of the payments manager was first presented at the Pix Forum in the middle of this year, and should gain relevance throughout 2024 for it can act as a link between companies and banks, generating agility to integrate new systems and rules for international remittances, payment methods and legal updates. Managers already exist and are called "payment orchestrators" - basically entities that take different solutions and offer them to customers, especially those who need to open new markets quickly.

3- Tap to Pay

Tap-to-pay is a credit card payment without a machine, directly through POS software, a simple payment app installed on the cell phone. The same way as the credit card can be digital (plastic-free) and payment can be made contactless, now the POS card machine is ready to retire. This evolution is expected to take place in the first half of 2024, driven specially by physical sales from smaller street retail stores. Giants in the payments universe are already gaining ground with innovation, and it is undeniable that its use (mobile purchasing) opens up even more possibilities for:

4- Payment with Open Finance

To ensure zero fraud at the time of payment, both digital retailers and betting sites use Pix to transact. The way to engage consumers in seamless cardless options has evolved until it reached a five-step direct connection. Payment with Open Finance, which is known globally as "bank-to-bank", has the advantage of excluding Pix's "copy-paste" from the payment flow. Payments can be made instantly to any online seller, and the process happens without requesting sensitive information such as credit card numbers. The best part: compensation is automatic, because it's processed through the Pix system. The adoption of this payment method at Trio is doubling every month, and we expect it to quintuple once Pix Automático launches in October 2024, which will revolutionize recurring payments.

5- DREX is coming!

The new Brazilian digital currency will go live at the end of 2024, but planning is already underway. DREX will be a stablecoin backed by the Real: which means that to purchase 1 DREX, you must pay R$1. It appears as a Brazilian regulated alternative to bitcoins and other stablecoins. It is often seen as a way to strengthen Real in the face of the newdigital economy anchored on blockchain. Pix has taught both the Central Bank and the market to plan better for the newcurrency. When Pix was born, few banks and fintechs were working on solutions for the technology. New products were being created literally from scratch, as Pix was launched in the middle of the pandemic. Only later, forced by huge and super-fast adoption, products were created. Systems (and even mindsets) have changed to be able to keep up. Therefore, it is to be expected that when DREX rises, there will already be products ready to use. A way to boost its use has already been proposed by Microsoft together with Caixa Econômica Federal and consists of giving cashback in DREX when purchasing popular consortiums is Reais, for example. It is a way to encourage financial inclusion among the less developed population in the digital economy.

I hope we can all be facing a wonderful New Year, full of prosperity and innovation.

To the next!

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