Instant Payments and Banks: the Impact of Pix on Bank Branches in Brazil

Abstract

This article examines the impact of the launch of the instant payment system Pix by the Banco Central do Brasil (BCB) on the number of bank branches in Brazilian municipalities. Using novel monthly data that capture Pix transactions at the municipal level and applying a staggered difference-in-differences approach, the study finds a negative and statistically significant effect of PIX adoption on the number of local bank branches. The paper contributes to the literature by assessing the economic impact of an instant payment system using an impact evaluation methodology and by focusing on quarterly, municipality-level data on Brazil’s Pix system.This article examines the impact of the launch of the instant payment system Pix by the Banco Central do Brasil (BCB) on the number of bank branches in Brazilian municipalities. Using novel monthly data that capture Pix transactions at the municipal level and applying a staggered difference-in-differences approach, the study finds a negative and statistically significant effect of PIX adoption on the number of local bank branches. The paper contributes to the literature by assessing the economic impact of an instant payment system using an impact evaluation methodology and by focusing on quarterly, municipality-level data on Brazil’s Pix system.