ECB confirms preliminary study of a Pix link with its instant payment system

The European Central Bank said it is conducting a preliminary investigation into a potential interlinking between its TARGET Instant Payment Settlement platform and Brazil’s Pix, according to a statement the bank gave Reuters on September 3. A link would mark the first cross-border expansion of the Brazilian instant payment system.

Technical teams at both central banks are assessing whether an interconnection is feasible, two people with direct knowledge of the matter told the news agency, speaking on condition of anonymity. One said a pilot project could launch in 2028 if the initiative advances as planned. The Brazilian newspaper Folha de S. Paulo first reported the discussions earlier that day, and Brazil’s central bank declined to comment.

The ECB identified Pix in June as a currency corridor under exploration for TIPS, according to the Reuters report. Brazil’s central bank said last month that it was assessing links between Pix and comparable systems abroad, and has signed information-sharing accords with 65 foreign counterparts.

Pix launched in late 2020 and offers free transfers between individuals alongside lower merchant costs than card payments, bypassing much of the traditional card chain. Since then it has brought tens of millions of people into the financial system while reducing the share of debit and credit card transactions, affecting Visa and Mastercard.

The system has become a point of friction between Brasilia and Washington. The Office of the United States Trade Representative named policies favouring Pix among the practices cited in its Section 301 action against Brazil, which led to a 25 percent tariff on a range of Brazilian goods taking effect on July 22. Brazilian officials rejected the characterisation, with central bank governor Gabriel Galipolo describing Pix as a public service rather than a competitor to card firms.

Earlier cross-border activity has been limited to the region. Banco do Brasil, through its Argentine subsidiary Banco Patagonia, activated a feature in March allowing Brazilian Pix users to pay Argentine merchants by QR code, with the transaction debited in reais and settled to the merchant in pesos.