US Targets Brazil's Pix Payment System as Trade Barrier, Sparking Tensions

Jakarta, CNBC Indonesia – This time it is not China; the United States is now at odds with Brazil. The administration of President Donald Trump has singled out the instant payment system Pix, developed by Brazil’s central bank, calling it a trade barrier.

US Trade Representative Jamieson Greer included Pix on a list of trade barriers used to justify Washington’s additional 25% tariff on Brazilian imports, which took effect this week.

A senior Trump administration official said Washington is not asking Brazil to abolish Pix, but argues the system should not receive special treatment simply because it is owned and operated by the government.

“We are not asking Brazil to get rid of Pix,” the senior official said, quoted by Reuters on Wednesday (22/7/2026).

However, Washington wants to avoid a situation in which Pix receives preferential treatment solely because it is government-owned and operated.

Brazilian officials believe the US criticism of Pix is merely intended to protect American credit card companies. A USTR document states that Brazil’s practices could undermine the competitiveness of US companies operating in digital commerce and electronic payment services.

The dispute underscores a growing threat to the dominance of global credit card companies. Government-built payment systems such as Pix offer an alternative to card payment networks that have dominated world transactions for decades.

Pix allows people to transfer money in real time through banking applications. The service offers free transfers, and also provides lower fees and faster transactions for businesses by cutting out much of the conventional card payment chain.

Central Bank of Brazil Governor Gabriel Galipolo rejected US criticism of Pix’s impact on card companies’ revenues and market access, calling the allegations absurd.

Galipolo said the absolute number of credit card users has in fact risen because Pix has encouraged more Brazilians to open bank accounts. According to him, Pix is a public service, not a competitor to credit card companies.

“It is like saying that building basic sanitation harms the income of water-truck owners,” Galipolo said.

The Central Bank of Brazil launched Pix in 2020. The system quickly became the dominant payment method in Latin America’s largest economy, overtaking card transactions within just three years.

Pix now accounts for more than half of all transactions in Brazil by volume. It has around 170 million users, roughly 80% of Brazil’s total population.

Several other countries also have instant payment systems, such as UPI in India and FedNow in the US. None, however, has matched Pix’s explosive growth.

In the first half of this year, the Central Bank of Brazil signed Pix information-sharing agreements with 65 international partners, ranging from developed countries such as Germany and Canada to developing nations such as South Africa and Turkey.

“Pix truly is a model and the direction everyone is heading,” Galipolo said.

Mastercard and Visa have both warned investors in their reports that payment networks such as Pix could threaten their businesses.

The Information Technology Industry Council (ITI), a Washington-based industry group representing Visa, Mastercard, Meta and several other technology companies, has also urged the USTR for years to create a more level playing field for its members in Brazil.

The group argues Pix should be subject to a more competitively neutral regulatory framework, and has called for international payment companies to receive equal treatment and access under Brazil’s payment system rules.

It remains unclear, however, why the Trump administration decided to act against Pix now.

Brazilian payment industry association Abec said the existence of multiple payment schemes and models — including the credit card, debit card and Pix ecosystems — delivers significant benefits to consumers and society.

Pix begins to gain global recognition

Card transaction volumes in Brazil continue to grow, after Pix brought more than 70 million people into the formal financial system.

However, the share of credit card transactions has fallen to around 15%, from roughly 20% before Pix was launched, while the debit card share has dropped to about 10% from around 26%.

Pix and similar instant payment systems also have room to expand beyond Brazil.

Several private companies have built infrastructure enabling Brazilians to use Pix when travelling abroad, including in the US. Conversely, foreign tourists can also use Pix when making transactions in Brazil.

Instant payment systems from various countries could even be interconnected in the future. This development adds to Washington’s concerns amid talks among major developing countries about reducing their dependence on the US dollar.

In its recent public statements, the US has focused criticism on Pix’s structure, highlighting the potential conflict of interest in the Central Bank of Brazil acting as both operator and regulator of the system.

The International Monetary Fund (IMF) also compared Pix’s governance with similar systems in China and India in a 2023 paper. In both of those countries, the operational and supervisory functions sit in separate entities.

When asked whether the Trump administration had demanded that Pix’s management be removed from the central bank, Galipolo said the US demands were hard to understand clearly.

He argued the current structure ensures Pix remains a public payment platform accessible to all market participants that meet the requirements.

The US criticism of Pix has in fact given President Luiz Inacio Lula da Silva an opportunity to rally support for the system, which is popular among small traders and informal workers because it offers a low-cost way to receive digital payments.

“No one is going to change our Pix,” Lula wrote on social media. “Pix belongs to the public, it is free, and it will stay that way.”