With the arrival of instant payment in Brazil, physical credit cards and traditional bank transfers may be less used. The Central Bank project, announced at the end of 2018, aims to create a type of fast electronic transactions, available 24 hours by cell phone and accepted at any establishment in the country.
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With a lower cost and compensation in a few seconds, the novelty has the purpose of gradually replacing transfers by DOC or TED. Banks, card flags and fintechs support the initiative and are preparing to join the platform developed by BC, whose tests begin in February. See, below, everything that is known so far about the new way of paying and transferring values.
Instant payment will work via QR Code 24 hours a day, seven days a week Photo: Divulgao / Ita
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What instant payment
Instant payment will be a means of settling securities electronically in real time between financial institutions. The operation will operate on a unified platform, called the Instant Payment System (SPI), developed and managed by the Central Bank. Unlike ordinary bank transfers, you will only need a given identifier to perform the transaction, such as CPF, e-mail or cell phone.
Similar operation to payment apps like Mercado Pago and PicPay. The platform, however, is intended to also bring together traditional banks such as Banco do Brasil, Bradesco, Ita and Santander, as well as digital ones like Nubank, card flags and other financial service providers.
In practice, the exchange of information between entities will take place behind the scenes and the user will deal mainly with QR Code. A customer who wants to pay for a coffee must open an application on his cell phone to read the code of the establishment. By means of an identity confirmation, which may involve fingerprints or face reading, the system will check if the operation is valid and perform the transfer instantly.
The use of this type of code for payments is still not popular in Brazil, but it is on the rise. A Capterra / Gartner survey carried out in January 2020 shows that 57% of respondents have already made some type of transaction using this electronic means, attracted by the speed and ease when carrying out operations.
The credit made on time for the establishment and the debit happens instantly from the credit of the card, the balance in the bank account or any other payment method registered by the consumer. The same goes for payments between two people: just select a contact in the phonebook to send a value quickly.
How instant payment works promises to be similar to apps like PicPay Photo: Daniel Dutra / TechTudo
The project is designed to serve anyone, even if they do not have a bank account. All payments will be made on a single platform and may involve transactions between individuals, between people and establishments, between companies and between them and the government. This is because the platform will be interoperable by any entity linked to the initiative. Unlike what happens today, the same platform will be used by a large bank or a small payments fintech. The database and management will be under the direct responsibility of the Central Bank.
Instant payment is faster and cheaper than TED transfers Photo: Divulgao / PagBank
Unlike TEDs and DOCs, instant payment promises to pay off almost immediately: the world average for this type of three-second service. In addition, the service will be able to operate seven days a week, 24 hours a day, without interruptions. Currently, transfers through the banking network depend on the institution's operating hours, between 6:30 am and 5:00 pm on business days.
Instant payments also promise to be cheaper, since they will not be intermediated by the traditional banking network. The new modality has a projected cost much lower than the expenses involving the infrastructure behind TED and DOC. Each operator, however, can define how the cost reduction will be passed on to the customer. Currently, banks charge up to R $ 20 per transfer, according to the Brazilian Federation of Banks (FEBRABAN).
Instant payment is seen as the safest substitute for physical card. One of the advantages is the possibility to change the payer code with each purchase, increasing the level of protection of the transaction: instead of a unique sequence recorded on the card, an application can issue a different QR Code with each new operation.
In addition to more security, the customer would benefit from using any means of payment regardless of the establishment's partnerships with buyers such as Cielo and Rede. Nor would it be necessary to know whether the location accepts Visa, Mastercard or another card brand. The same would apply to account debits and any other means compatible with instant payment.
With less adherence to the physical card, the machine market is also expected to fall. After all, the customer no longer needs the plastic to buy with a credit limit and the establishment will no longer need special equipment to receive the values. Depending on the membership, the instant payment may also be a substitute for the boleto.
Consumers will have less reason to use physical cards Photo: Pond5
The Central Bank's solution for instant payments does not follow the worldwide trend of using blockchain technology. Instead of adopting the cryptographic record book, the entity develops a solution with centralized control, whereby all communications will be intermediated to validate a transaction, but this does not prevent independent alternatives to exist.
One of the cases is Spin Pay, an instant payment gateway that uses blockchain and not connected to the BC system. The company has been trying to compete with traditional payment methods since October 2019. Its operation is a departure from what is expected by the end of 2020: the user can use a selfie or fingerprint instead of the password to validate the transaction and make a purchase with immediate compensation.
In December, the Minister of Economy, Paulo Guedes, raised the possibility of taxing electronic transactions. On the occasion, the minister defended the measure as a way of replacing the collection resulting from an eventual exemption from payroll. The Federal Government has not yet confirmed whether the arrival of the instant payment will coincide with the creation of a new tax on operations.
The first tests of the Central Bank system will take place in February, and decisions are still pending regarding the standardization of cryptographic technologies and ways of authenticating users in the system. The first phase of instant payment is expected to reach the public in November 2020, but with limited functionality.
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