Abridgement of the transcript of the video for the reader's convenience; of course "hand made" (not automated); I omitted the marks at the cuts for brevity.
> The Trump administration announced that, after a year-long Section 301 investigation [on "unfair trade practices"], the US would be imposing a 25% tariff on most Brazilian imports: the first item on the list of American complaints was about "digital trade and electronic payment services" - a reference to a payment processor called Pix, that was set up by the Brazilian Central Bank as a cheaper alternative to companies like Visa and Mastercard.
> When you use your credit or debit card to pay for something, youʼre basically sending money from your bank account to the sellerʼs bank account: that payment has to actually be facilitated by a payment processor, which acts as a trustworthy middleman between your banks. Globally, the payment processing market is dominated by Mastercard and Visa, who together account for roughly 90% of all card transactions (if you exclude China, where the market is dominated by state-owned UnionPay).
> Unsurprisingly, not everyone likes this state of affairs: not only does this mean these two companies are essentially skimming a bit off the top of every transaction and sending it back to the US, their fees can also be prohibitively expensive, especially for would-be users in poorer countries. To remedy this, a number of jurisdictions have tried to nurture homegrown alternatives. In the EU, for instance, earlier this year, four national payment processors came together in an attempt to create a sort of European alternative. Generally, however, these initiatives have fallen short because the Visa MasterCard duopoly is protected by what are known as network effects - everyone uses them because everyone else already uses them.
> In 2020 the Brazilian Central Bank introduced a new system called Pix. Before Pix, sending money in Brazil was both frustratingly slow and expensive; this pricey and inefficient system encouraged Brazilians to hold their savings in cash instead - this meant there wasnʼt enough money in Brazilʼs banking system and encouraged a massive cash-based informal economy. Pix allows Brazilians to transfer money between bank accounts quickly and cheaply - costless for individuals, 0.33% for businesses (many times lower than the alternatives). It now accounts for nearly half of all financial transactions in Brazil and is used by around 160 million people, or over 90% of the adult population. Itʼs one of the very few entities that enjoys broad support across Brazilʼs deeply polarized politics, with opinion polls indicating that 92% of Brazilians have a good opinion of Pix. And a couple of months ago Colombiaʼs then president Gustavo Petro even asked for it to be expanded into Colombia. The Central Bank estimates that around 70 million people have been brought into the formal banking system for the first time via Pix, and the total volume of financial transactions has essentially doubled since Pix was introduced. Interestingly, Pix has actually led to an increase in non-Pix credit and debit card transactions, which suggests that while Pix is gaining market share, itʼs also just making Brazilians more comfortable using bank services more generally - this implies that while it is quite a direct competitor, Pix has actually been good news for other payment processors like Visa and Mastercard.
> Trumpʼs White House announced last week that it would be imposing a 25% tariff on most Brazilian exports to the US. This came after a year-long investigation into what the White House described as Brazilʼs unfair trade practices. Unsurprisingly, this didnʼt go down well with Brazilʼs president Lula. At a hearing in Washington earlier this month, [Flavio] Bolsonaro tried to make the exact argument we made earlier about how PIX was actually good for Visa and Mastercard because it increased the size of the payment processing pie - but he was essentially ignored by the White House.
mdp2021•14m ago
Moderation, kindly find the snipers around the site and send them hitmen.
mdp2021•54m ago
> The Trump administration announced that, after a year-long Section 301 investigation [on "unfair trade practices"], the US would be imposing a 25% tariff on most Brazilian imports: the first item on the list of American complaints was about "digital trade and electronic payment services" - a reference to a payment processor called Pix, that was set up by the Brazilian Central Bank as a cheaper alternative to companies like Visa and Mastercard.
> When you use your credit or debit card to pay for something, youʼre basically sending money from your bank account to the sellerʼs bank account: that payment has to actually be facilitated by a payment processor, which acts as a trustworthy middleman between your banks. Globally, the payment processing market is dominated by Mastercard and Visa, who together account for roughly 90% of all card transactions (if you exclude China, where the market is dominated by state-owned UnionPay).
> Unsurprisingly, not everyone likes this state of affairs: not only does this mean these two companies are essentially skimming a bit off the top of every transaction and sending it back to the US, their fees can also be prohibitively expensive, especially for would-be users in poorer countries. To remedy this, a number of jurisdictions have tried to nurture homegrown alternatives. In the EU, for instance, earlier this year, four national payment processors came together in an attempt to create a sort of European alternative. Generally, however, these initiatives have fallen short because the Visa MasterCard duopoly is protected by what are known as network effects - everyone uses them because everyone else already uses them.
> In 2020 the Brazilian Central Bank introduced a new system called Pix. Before Pix, sending money in Brazil was both frustratingly slow and expensive; this pricey and inefficient system encouraged Brazilians to hold their savings in cash instead - this meant there wasnʼt enough money in Brazilʼs banking system and encouraged a massive cash-based informal economy. Pix allows Brazilians to transfer money between bank accounts quickly and cheaply - costless for individuals, 0.33% for businesses (many times lower than the alternatives). It now accounts for nearly half of all financial transactions in Brazil and is used by around 160 million people, or over 90% of the adult population. Itʼs one of the very few entities that enjoys broad support across Brazilʼs deeply polarized politics, with opinion polls indicating that 92% of Brazilians have a good opinion of Pix. And a couple of months ago Colombiaʼs then president Gustavo Petro even asked for it to be expanded into Colombia. The Central Bank estimates that around 70 million people have been brought into the formal banking system for the first time via Pix, and the total volume of financial transactions has essentially doubled since Pix was introduced. Interestingly, Pix has actually led to an increase in non-Pix credit and debit card transactions, which suggests that while Pix is gaining market share, itʼs also just making Brazilians more comfortable using bank services more generally - this implies that while it is quite a direct competitor, Pix has actually been good news for other payment processors like Visa and Mastercard.
> Trumpʼs White House announced last week that it would be imposing a 25% tariff on most Brazilian exports to the US. This came after a year-long investigation into what the White House described as Brazilʼs unfair trade practices. Unsurprisingly, this didnʼt go down well with Brazilʼs president Lula. At a hearing in Washington earlier this month, [Flavio] Bolsonaro tried to make the exact argument we made earlier about how PIX was actually good for Visa and Mastercard because it increased the size of the payment processing pie - but he was essentially ignored by the White House.
mdp2021•14m ago