Pix and Progress: Democratizing Financial Services

According to the International Monetary Fund’s analysis of Pix, Brazil’s payment system reform is a global standout. But are fast, free payments enough to drive true inclusion and financial literacy?

In recent years, Brazil has become an unexpected leader in financial innovation—not because of some flashy fintech boom driven by private capital, but because of Pix, a bold, centralized initiative launched by its own central bank. Introduced in late 2020, Pix is a real-time payment system that allows users to send money instantly, 24/7, for free. It was designed to be simple and accessible to everyone from gig workers in São Paulo to farmers in the Amazon.

On the surface, it looks like a massive success. In less than three years, as noted by PagBrasil, more than 70 percent of Brazilians use Pix as their preferred payment method. Today, it facilitates more transactions than debit or credit cards. It’s fast and intuitive, and it doesn’t rely on traditional banking infrastructure. But as someone studying emerging markets and financial inclusion, I find myself asking a deeper question: Does widespread access to a financial tool actually mean people are being financially included in a meaningful way? Or is this simply a digital rebranding of the same informal economy that existed before?

This question becomes even more relevant when we factor in Open Finance, Brazil’s broad strategy to transform how financial institutions interact. With Open Finance, individuals can now share their financial data (Pix history, spending patterns, credit behavior) across banks, lenders, and fintech. In theory, this means more competition, more personalized products, and better access to things like loans and insurance, especially for people who were previously excluded from the financial system. But inclusion isn’t always as straightforward as the numbers suggest.

Financial exclusion in Brazil hasn’t just been about a lack of access. It’s been about mistrust, bureaucracy, and cost. For decades, millions of Brazilians operated entirely in cash. Bank accounts came with fees people couldn’t afford and documentation requirements that many couldn’t meet. In rural areas or favelas—low-income sections of inner cities—even getting to a bank branch could be a half-day ordeal, so people created informal systems such as rotating credit groups, cash savings, and bartering.

That’s what makes Pix so interesting. It wasn’t just an innovation in speed; it was an innovation in design. It didn’t ask people to trust banks or jump through paperwork hoops. All a user needed was a smartphone and a CPF—Brazil’s individual taxpayer number—which most people already had. Suddenly, a street vendor could receive payments digitally. A nanny could get paid without waiting for a bank transfer. A teenager could split a cab ride with friends in seconds.

But there’s a catch. Using Pix doesn’t automatically mean someone has the knowledge or the tools to manage their money effectively. One of the biggest concerns researchers are raising is that transactional inclusion isn’t financial literacy. Pix may be encouraging more short-term spending behavior without necessarily helping people build credit, plan for the future, or save in a meaningful way. The speed of transactions makes everything feel immediate, which can be empowering—but also overwhelming.

Another issue is data. Every Pix transaction generates information about when, where, and how money is moving. That data can be useful in building financial profiles for people without a formal credit history. But who owns that data, and how is it being used? As fintech companies rush to offer loans and financial products based on Pix histories, people being targeted may not understand what they’re opting into.

Then there’s the question of scale. While Pix adoption has been strong in cities, millions in rural areas have neither smartphones nor consistent internet. Older adults and people with lower digital literacy are also less likely to benefit. In that sense, Pix may be widening some digital divides as it closes others. Even for those who use it regularly, the gap from “I can now get paid faster” to “I can now access low-interest credit or start a savings plan” is still a big one.

Open Finance is supposed to help close that gap. In theory, by sharing their data across institutions, consumers gain more power. Instead of being stuck with one bank’s fees or denied credit because of a lack of traditional income, a person can use their Pix activity to demonstrate stability. With this fuller picture of a customer’s financial life, lenders can offer better terms.

But again, it depends on execution. If lower-income users are guided toward high-interest products but don’t understand the long-term costs, the system is not empowering people; it’s just formalizing a new type of data collection while reinforcing the very inequalities it’s designed to fix.

That said, there’s real optimism in what Brazil is doing. The speed at which Pix has spread shows that when people are offered tools that meet their needs, they will use them.

For Brazil to truly lead a new model of inclusive finance, however, it must go beyond infrastructure. That means investing in digital literacy, especially in rural and marginalized communities. It means strengthening data protection so users can safely navigate Open Finance. And it means making sure the new tools serve not just those who are already close to formal systems—but those who have been furthest from them.

About the author

Bruna Araujo is a student in the Master’s in Business Analytics program at Cornell University and an EMI Fellow. Originally from Brazil, she brings insight into the social and economic dynamics shaping financial inclusion in Latin America. Her research interests lie at the intersection of technology, policy, and economic development, with a particular focus on how digital innovation can bridge structural inequalities in emerging markets. Her graduate work explores how government-led fintech initiatives can serve as models for inclusive growth.

All views expressed in articles published on the Emerging Markets Institute webpage are those of the author(s) and should not be taken as reflecting the views of the Emerging Markets Institute.