WASHINGTON - The United States escalated a trade dispute with Brazil Tuesday after determining that the country's wildly popular Pix payment system poses an unacceptable threat to the longstanding international principle that moving money should involve several intermediaries taking a little piece.
Pix, created by Brazil's central bank, allows individuals to send money instantly for free and gives merchants a low-cost alternative to credit cards. It is now used by roughly 170 million people and accounts for more than half of Brazilian transactions by volume.
U.S. trade officials have cited Pix among practices they say may disadvantage American companies. Brazilian officials and industry participants argue that criticism of the system protects entrenched card networks.
"Free, instant payments sound appealing until you consider the broader ecosystem," said a payments lobbyist. "What happens to the innovation produced by a three-day settlement delay, a 3% merchant fee and a chargeback department in Delaware?"
American policymakers warned that Pix could set a dangerous precedent by teaching consumers that payments infrastructure can be treated like public plumbing rather than a luxury theme park where every pipe has a toll booth.
Brazil defended the system, noting that competition has lowered costs and expanded access. U.S. negotiators responded that such outcomes may constitute unfair trade behavior if they make existing products look unnecessarily expensive.
At press time, Washington was reviewing whether Brazil's free public beaches also discriminate against American resort operators.
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