The Future of Cross-Border Payments Could Lie in Brazil

cross border legal services in brazil
October 20, 2022
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The Future of Cross-Border Payments Could Lie in Brazil

The global economy is becoming increasingly interconnected. Gone are the days were only large companies could do business with customers outside of their borders. Nowadays, anybody can sell products and services to any customer, anywhere.

That’s why it’s not surprising that there were $25 trillion in cross-border payments in 2021 alone. However, these payments are often complex, take long amounts of time to complete, and generally aren’t easy to do.

Brazil’s Pix payment system may be the solution to cross-border payments that the global economy has been searching for. We’ll tell you more about it and how it could help create the future of cross-border payments in the sections below.

Cross-Border Payments Matter More Than Ever

It’s worth first taking a moment just to reiterate how critical cross-border transactions are in the modern economy. As we mentioned previously, $25 trillion in value gets exchanged through these payments every year. That’s more than some domestic economies.

Technology advancements have made it easier than ever for people from different countries to communicate with one another despite their differences in language and culture.

As the rate of technological change continues increasing, cross-cultural communication will only become easier, and cross-border payments should only grow as a result of this.

Brazil’s Solution

Pix is Brazil’s account-to-account payment method, which makes it easier for citizens of the country to exchange money with one another. It provides instant transaction finality, is available 24/7, and can be used with nearly every payment service in the country.

Pix’s launch was hotly anticipated, and now that it’s here, Brazilians are using it to transfer everything from small peer-to-peer payments with one another to largescale company payments between domestic brands.

In fact, there were nearly $700 billion in Pix transactions during the first year of its release alone. This shows just how valuable Brazilians find Pix and why many are predicting it will experience exponential growth moving forward.

Will Pix Be the Future of Cross-Border Payments?

Pix has been a massive success within Brazil because of how cheap it is to use and the fact that its payments are instant. But could that success be exported internationally to serve as the ground layer of a new type of cross-border payment? Some experts say, yes.

Brazil’s Central Bank is planning on using Pix to act as the base layer of a worldwide network of international payments based on the principles of instant finality and cheap transactions.

This is a long-term project that won’t be achieved overnight, and there are other countries working on similar solutions. However, Brazil’s Pix payment system is already extremely successful domestically. There’s good reason to believe that its benefits will be appreciated by the international community as well once members of other countries can start accessing Pix.

For now, we will have to wait and see how Brazil’s Central Bank proceeds with the development of Pix. But it’s a technology that’s absolutely worth watching as the world continues searching for a truly international solution to cross-border payments.

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