RIO DE JANEIRO, BRAZIL – The next steps for Pix, the Central Bank (BC) instant payment system, may include the implementation of the international PIX, which will enable real-time transfer of funds abroad from Brazil. The tool is under study, but the Central Bank should soon propose a number of changes in the exchange rules, aiming at the modernization of the exchange system and the introduction of new technologies such as this.
“The Central Bank has been closely monitoring the evolution of new technologies and business models, specifically in the foreign exchange market and electronic payments, through digital platforms,” it explained. “Based on this diagnosis, we identified opportunities to improve the regulation of the foreign exchange market,” said the head of the BC’s Prudential and Exchange Regulation Department (DEREG) Lúcio Oliveira.
The measure, according to him, is aligned with other international initiatives. “There is an effort at the global level to make transactions cheaper, faster, more transparent, and improve the access of customers, of citizens in general, to international payments and transfers,” he said.
Oliveira explained that the international PIX involves three dimensions: PIX itself, exchange regulations, and the international platform infrastructure. On the foreign exchange issue, for the set of operations required for PIX, the situations are all currently included in the norm that is the object of ordinance CP 79.
For the head of the Legal Department of Paypal (international online payment company), Mônica Leite, the implementation of the international PIX is a natural evolution. According to her, an instant transfer system involving transactions abroad would be beneficial both for individuals and for small, medium, and even large companies.
“Several hurdles can be solved with the international PIX. Today it is still quite complicated [to make transfers abroad], but it should be possible and [the PIX] will benefit the population, especially when we talk about unilateral or small value transfers. But with the possibility that it will evolve in the future and can be used for commercial purposes,” she said.
New exchange norm
One of the main points foreseen in the new exchange rules proposal is the possibility of Payment Institutions (PIs) authorized by the Central Bank (BC) to start operating in the exchange transfer market, making personal remittances abroad. According to Oliveira, these are a large number of transactions, but mostly low-value operations, around US$3,000.
“But of very great importance for financial inclusion and social significance,” he said, since, in general, these are resources that are sent by family members working abroad to support the family in the country of origin.
Another pillar of the standard deals with institutions and payment accounts in the foreign exchange market. Unlike current accounts, payment accounts are simpler and cannot carry out credit operations.
People or companies with no domicile or headquarters in Brazil should be allowed to have prepaid payment accounts in reais in the country, with a value limit of US$10,000. Currently, foreigners or Brazilians who live abroad and want to make payments in Brazil need to keep a deposit account in a bank authorized to operate in the exchange market.
The Central Bank is also dealing with the modernization of payment services or international transfers in the foreign exchange market, which allows payment institutions to offer these services. Currently, only banks and brokers can perform these operations. The proposed limit for operations is US$100,000, and payment institutions will not work with cash.
In this case, some regulations will be unified, to make the processes simpler for market participants. According to Oliveira, today there are specific rules for international credit cards and facilitating companies. The Central Bank also proposes that foreign exchange operations can be done in an aggregate manner by financial institutions, rather than per client, which should reduce costs.
According to Oliveira, these three central pillars are connected in the new regulation, in relation to new possibilities of these services being offered, in this context of modernization and new technologies. There is also a forecast of continuous review and improvement of the Central Bank regulations, in several areas, and points that were not accepted now may be incorporated in the future, according to market behavior.
According to Leite, since 2015 the Central Bank has been working to make exchange control regulations more flexible, but many were still disconnected. She says that with the regulation of CP 79 this mismatch will no longer exist and there will be more usability of both payment institutions and the figure of the facilitator can be expanded. “This figure contributes to the inflow and outflow of resources, simplifying the lives of citizens and small and medium-sized companies that were interested in accessing the international market, but did not have access to the same facilities as a large company in the market,” she explained.
According to the Regulatory Legal Director of Ebanx (a technology company for payment and financial transaction solutions) and Coordinator of Abranet’s Facilitators Working Group, Gilberto Martins, the changes proposed by the Central Bank were welcomed by the market, which also pointed out improvements.
“We are providing relevant aspects for competition, banking decentralization, possibility of cost reduction for the user and, of course, greater digital inclusion and service modernization, especially in this pandemic moment in which we need digital life so much. The norm is beneficial, modern, and in line with global trends,” he said.
One of the challenges of the international PIX is to adopt a settlement system in which institutions from other jurisdictions will have to participate.
“One way is to facilitate these institutions to have accounts in reais here in Brazil in an easier and more flexible way. They can have them today, but they have a number of restrictions that make this product little explored in the country,” he explained.
Source: Agência Brasil