UPI payment in India vs Pix payment in Brazil: a parallel between both APMs

In an increasingly digital world, real-time payments have transformed how we transact, revolutionizing economies globally. Two prominent examples are India’s Unified Payments Interface (UPI) and Brazil’s Pix payment system. These systems enable swift, secure, round-the-clock transfers, reshaping financial landscapes and fostering financial inclusion.

In this blog post, we will explore these alternative payment methods (APMs), compare them, and show how they impact their respective countries.

What are instant payments?

To understand Pix and UPI, we must first clarify instant payments. Real-time payment systems facilitate instant fund transfers, diverging from traditional methods that could take days. Powered by technology, these systems seamlessly link financial institutions, ensuring rapid and secure transactions.

Instant payments perform swift processing and settlement of financial transactions, typically within seconds, utilizing modern payment systems like real-time gross settlement (RTGS) and immediate payment systems (IPS). They ensure real-time transfers, and some operate 24/7. 

Examples of instant payments include UPI and Pix. Considered APMs, they are helpful not only for daily transactions but also crucial for digital commerce since they foster customer satisfaction and operational efficiency.

Pix: Transforming Payments and Inclusion in Brazil

Launched in November 2020 by the Brazilian Central Bank, Pix Brazil has revolutionized real-time payments, facilitating instant transactions through various channels. In just under a year, Pix transactions have eclipsed conventional methods, effectively bridging gaps in financial inclusivity.

Pix payment system extends to Brazil‘s unbanked population, fostering a new era of financial inclusion. Its user-friendly nature makes it a preferred choice for all sorts of businesses, especially digital commerces, eliminating hindrances imposed by traditional fees.

• More than 141 million individuals and 11.4 million businesses embraced Pix in Brazil in 2022.

• An astounding USD 2 trillion worth of funds were transferred through the Pix system in Brazil in the same year. (Source: BCB (Brazilian Central Bank)

UPI: India’s Digital Payment Vanguard

Launched in 2016, UPI India has revolutionized digital payments by enabling seamless bank transfers via mobile devices and VPAs. Bridging urban-rural divides, UPI fosters financial inclusion and empowers even the technologically hesitant.

Developed by NPCI and regulated by RBI, UPI simplifies transfers through UPI IDs, QR codes, and VPAs, enhancing cross-operability. Its open-source API connects banks, merchants, and users for swift transactions, eliminating transaction costs.

• UPI led India’s digital payments in 2022, processing 74 billion transactions worth nearly 1.6 trillion dollars.*

• UPI reshapes India’s financial landscape with 300 million users and 500 million merchants.**

Sources: National Payments Corporation of India (NPCI)*

The Times of India**

The differences between Pix and UPI

UPI and Pix are real-time payment systems that share essential similarities. They enable secure, 24/7 real-time transactions and are widely accepted by multiple banks in their respective countries.

Yet, there are some slight differences in their operations:

• Identification: Pix allows users to associate keys (like email, phone number, Tax ID, or random characters) with their accounts, whereas a UPI payment uses VPAs (virtual payment addresses).

• Cost: Pix transactions in Brazil have variable limits based on user profiles and the day of the week, while UPI transactions in India vary with factors like the user’s bank, account type, and authentication level, extending to peer-to-peer transfers and merchant payments.

• Cross-app Integration: In Brazil, Pix is integrated into banking and financial apps, enabling direct transactions within a bank’s app. Conversely, UPI’s open-source API design allows diverse mobile payment apps in India, offering users a choice of UPI-supported options developed by various banks and third-party providers.

• Recurring Payments Capability: While UPI currently supports recurring payments, Pix should have this capability by April 2024 with its new feature, Pix Automatico (Automatic Pix).

Key benefits for consumers using both instant payments

The emergence of digital payment systems like PIX in Brazil and UPI in India has transformed the way people handle financial transactions. These platforms bring numerous advantages to consumers, making payments more convenient, faster, and inclusive. Here are the top five benefits for consumers in both countries:

• Instantaneous Transactions: PIX and UPI offer real-time money transfers, ensuring quick and convenient payments.

• Wide Acceptance: These systems are widely adopted, making it easy for consumers to use them for various transactions.

• Interoperability: Users can seamlessly transact across multiple banks and apps, enhancing convenience and flexibility.

• Financial Inclusion: PIX and UPI promote financial access, benefiting consumers who do not have traditional bank accounts.

• Security: These systems prioritize security measures, ensuring the safety of consumers’ financial transactions.

Broad Impacts of UPI and Pix

Beyond convenience, UPI and Pix are engines of economic growth and innovation. UPI accelerates India’s digital payments push, aligning with the vision of a cashless society. It empowers marginalized sections, promoting financial parity.

Pix rejuvenates Brazil’s financial landscape, eradicating transactional complexities. Its popularity underscores a demand for seamless financial solutions, potentially fostering business efficiency and curbing tax evasion.

Offering Pix and UPI is necessary for a business that depends on online sales and is either operating or willing to expand in Brazil and/or India. Having a top-performing payment partner like EBANX is the easiest way.

EBANX offers more than 100 payment methods, including the most popular APMs, across Brazil, India, and several other emerging markets.

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