The European Central Bank (ECB) is exploring a potential interlinking between its TARGET Instant Payment Settlement (TIPS) platform and the Central Bank of Brazil’s Pix platform, according to a report. The ECB confirmed this in response to an inquiry about a claim by unnamed sources that the two central banks are considering linking their instant payment systems.
A linking of the systems would mark the first cross-border expansion of Pix, which dominates payments in Brazil. Technical teams from the two central banks are assessing whether an interconnection of the systems is feasible, and a pilot project could be launched in 2028.
Pix has achieved unprecedented growth since its introduction, becoming one of Brazil’s most preferred payment methods and helping instant payments become common in Latin America. The Central Bank of Brazil said in an August report that connecting Pix and other instant payment systems could lower costs, accelerate transactions, broaden access and improve the transparency of cross-border payments.
In an earlier report, released in 2023, the central bank said only that Pix “may in the future” be integrated with other countries’ instant payment systems. However, in August, Brazil’s central bank sounded more certain than in the past that it will link Pix to similar instant payment systems in other countries.
Pix has significantly boosted financial inclusion by encouraging the opening of digital accounts across all societal segments and integrating more individuals into the financial ecosystem. Since its launch in 2020, Pix has grown to reach 70% of Brazil’s population, or more than 150 million users, and processes more transactions than Visa and Mastercard combined.
Brazil’s central bank also extended Pix to Argentina so that Brazilians living in that country can make payments and transfers across borders. With Pix, Brazil has become Latin America’s most prominent success story in terms of instant payments, and this success is likely to influence cross-border payments in the region.
The potential interlinking of TIPS and Pix could further expand the reach of instant payments in Latin America. As the ECB and the Central Bank of Brazil continue to explore this possibility, they remain to be seen how this development will impact payments in the region. The Central Bank of Brazil declined to comment on the matter, but the ECB’s exploration of this potential link suggests that there may be more developments to come in the future.
It is a significant development. The expansion of Pix into other countries, such as Argentina, demonstrates the system’s potential for cross-border growth, and the potential link with TIPS could facilitate payments between Latin America and Europe, promoting greater economic integration and cooperation between the two regions.
