• Tassos Stassopoulos

Insights from Brazil: How PIX drives entrepreneurship

Updated: 3 days ago


Entrepreneurs around the world often face countless obstacles for their new ventures. Having a good idea and establishing a product or service is only the first step before they need to plan promotions, facilitate payments and deal with logistics, while staying on top of cashflows and accounts to ensure that the business can get off the ground, let alone grow.


During our recent immersion study in Brazil, we heard how PIX, the digital payment system, launched by the Central Bank in late 2020, helped entrepreneurs tackle their cashflow challenges. We met small business owners who reluctantly accept credit card payments as these entailed a 3.5% fee taken by the card provider. Furthermore, these payments don’t hit the entrepreneurs’ bank accounts for another 30 days, making cashflow management much more complex.


PIX: a game changer for entrepreneurs

We believe the widespread adoption of PIX is now poised to fuel a new wave of entrepreneurship by reducing the need for working capital and managing cashflows.



One beneficiary is Zeze, who worked as a retail sales assistant before becoming an entrepreneur. She runs a street food stall in Brazil’s coastal city of Salvador and strives to be the good boss. She insists that the women working for her are collaborators, not employees. She pays them every day and celebrates their successes together.


Zeze has confidence in the business that she runs. She knows that she sells a great quality product at a fair price.


She says that it was easy to manage cashflows when everybody paid in cash. She just counted what was left at the end of the night after paying for ingredients and wages. But as the payments by credit cards increased, she had to wait a month before seeing her money. Managing receivables and planning her finances is her biggest challenge. She admits that without an accounting education she is often not sure if she is making or losing money, especially in the current inflationary environment. She struggles to match her daily expenses with the delayed revenues she receives via the credit card companies.

More painful than the 3.5% fee, is that she receives the money a month later, making it difficult to manage cashflows

PIX on the other hand offers instantaneous payment, at no cost to either merchants or consumers.


Zeze says that if all the payments were with PIX, she would save the 3.5% credit card transaction fees and could easily understand if she made or lost money that day by looking at the balance in her bank account at the end of the night. It would also mean that she needs less working capital to fund her business, something that many small entrepreneurs struggle to raise.


Digital payments coupled with social media will drive social commerce

Another strong PIX supporter we met was 47-year-old Cecilia who lives in a middle-class suburb of São Paulo. She gave up a job in the hospitality industry to raise her children but started to look for a way to contribute again once they became teenagers. As the pandemic subsided, Cecilia saw an opportunity in organising boutique trade fairs. She could market them through the many WhatsApp groups that she joined during the pandemic.

Receiving the money instantaneously is so important for their cashflow management that they are willing to offer discounts that are higher than the credit card fees. And the consumers love the idea of getting a good deal.

She pays approximately R$15,000 (US$3,000) to hire a venue, and splits that cost between the various artisans that she invites to sell at the fair. For the model to work, Cecilia needs to receive payments from the artisans on the same day, so that she can pay for the venue directly from the proceeds. Many of the artisans work on very tight cash flows, and even offer customers a 5% discount if they pay by PIX. Although the discount is more than the credit card fee, it allows them to receive the cash into their bank accounts instantaneously, and in turn to pay Cecilia. Receiving the money instantaneously is so important for their cashflow management that they are willing to offer discounts that are higher than the credit card fees. And the consumers love the idea of getting a good deal.

71% of Brazilian adults had reportedly used PIX

Embracing a digital payment system that is instantaneous, simple, and cheap, removes some major barriers for small businesses. Brazil is leading the way in adaptation. According to the Banco Central do Brasil (BCB), there were more than 1.6 billion PIX transactions in the first year of operation, involving the transfer of almost R$ 4 trillion, around US$750 billion. At the end of 2021, 71% of Brazilian adults had reportedly used PIX following a major promotional campaign by the BCB.


Growing number of women entrepreneurs

Zeze and Cecilia are part of a growing trend of women around the world wanting to set up their own businesses. According to the latest Women Entrepreneurs Finance Initiative survey: “Over half of women in developing countries see entrepreneurship as a path to a better future, fully double the rate in high-income countries. With 17 percent of working-age women in developing countries already engaged as entrepreneurs, another 35 percent aspire to become entrepreneurs.”

With 17 percent of working-age women in developing countries already engaged as entrepreneurs, another 35 percent aspire to become entrepreneurs.

We expect other countries to closely watch the success of PIX, and while some have their own digital payments systems, none have reached PIX’s high adoption levels in such a short time. As these payment systems become mainstream, they will offer a welcome boost for entrepreneurs, many of whom we expect to be women.


Listen to our podcast: Inflation, PIX: Brazil’s changing consumer habits

Note: Some subjects’ names have been changed to protect their privacy.



The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of Trinetra Investment Management LLP and are subject to revision over time. Trinetra is authorised and regulated by the Financial Conduct Authority in the United Kingdom.