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The Automatic Pix variable recurring payments service, which runs on the Central Bank of Brazil’s (BCB) popular instant payments system, is intended to reduce costs and promote greater efficiency in recurring payments for both consumers and businesses.
The service went live on June 16, 2025, and offers greater flexibility than standard direct debits, allowing payers to authorise recurring payment agreements via mobile app, website, QR code or Pix Copy and Paste.
Automatic Pix is free to use for payers, but payment service providers (PSPs) can set prices for payees, which should help to promote competition for transactions.
All Pix participants that offer transactional accounts must offer Automatic Pix on behalf of payers, but may opt out of receiving variable recurring payments service transactions on behalf of recipients.
In addition, the BCB expects PSPs offering Automatic Pix to maintain the same high standards of security that are expected of regular Pix transactions.
The bigger picture
The launch of variable recurring payments on Pix is yet another milestone in the evolution of Brazil’s incredibly successful instant payments system.
After going live in 2020, Pix transaction volume overtook debit and credit cards in 2023 and cash in 2024, according to BCB data.
However, the rapid growth of Pix and its near-instant transaction speeds have made it a prime target for fraudsters.
In 2024, according to unpublished BCB data provided to local media, losses to reported Pix fraud totalled BRL4.9bn ($883m), a 70 percent increase on the previous year.
Last year, refund requests received by PSPs due to alleged fraud averaged 390,000 per month.
For Automatic Pix, the first line of defence against fraud is that all receiving customers must be legal persons that have been incorporated for at least six months.
PSPs will be responsible for ensuring that payees meet these criteria, and that they do not engage in fraud or “bad faith conduct” against payers.
Where disputes occur due to erroneous charges or suspected fraud, the BCB’s existing Special Refund Mechanism (MED) will apply.
Created by the BCB in 2021, the MED offers a dispute resolution framework in cases where Pix transactions are made in error or due to fraud.
As with regular Pix transactions, the MED will allow Automatic Pix users to request the reversal of a payment if certain conditions are met.
In the case of undue charges, the payer must submit a reimbursement request to their PSP within 80 days of the disputed transaction, stating that the payment violated the terms of their authorisation agreement.
If the payer’s claim is correct, the sending PSP must refund the payment to the payer in full.
In cases of suspected fraud or scams, MED rules apply, and the mechanism also includes safeguards designed to ensure that it may only be used to remedy cases of PSP error, fraud or scams.
For example, if a consumer enters an Automatic Pix agreement to purchase a certain product or service, but is not satisfied with the quality, they cannot use the MED to obtain a refund.
Likewise, if a consumer enters an Automatic Pix agreement with a recipient by mistake, the consumer cannot use the MED to compensate for personal error.
Why should you care?
PSPs on both the sending and receiving end of Automatic Pix transactions will face a new fraud prevention challenge in the months ahead.
Although Automatic Pix is not likely to be a first choice for fraudsters, given its stringent know your customer (KYC) requirements and its exclusion of individual user accounts, PSPs should not be complacent.
Not only is the rate of Pix fraud increasing dramatically, but the BCB’s operating rules also make clear that providers will be held responsible for cases of fraud that result from failures to manage risk.
To avoid penalties for such failures, PSPs offering Automatic Pix should be thinking about:
- Customer due diligence (CDD): Ensuring that all recipient customers (legal persons) undergo appropriate KYC processes, including verifying their CNPJ number (National Register of Legal Entities) and other corporate documentation.
- Ongoing monitoring: Implementing systems for transaction monitoring to detect suspicious activities, including checks against lists of entities involved in illegal activities (e.g., fraud, money laundering, terrorist financing).
- Compliance training: Regularly training staff on anti-money laundering and counter-terrorism financing (AML/CTF) regulations and the proper procedures for verifying customers and flagging suspicious transactions.
- Regulatory reporting: Reporting suspicious activities to the Brazilian Financial Intelligence Unit (COAF) as required.
- Complaints: Creating clear, accessible communication channels for customers to file complaints about Automatic Pix transactions, including via the MED.
- Refunds: Explaining clearly how the MED dispute resolution process will unfold, the expected timelines and how the customer can track the status of their complaint.
India’s AutoPay on UPI has demonstrated the potential of recurring payments via instant payment systems, and Automatic Pix may quickly become the preferred option for recurring payments in Brazil, outpacing cards and direct debits.
This means that large customer bases and high transaction volumes are to be expected in the near future.
PSPs operating in the country should therefore be considering their approach to the service and how they can best ensure that their fraud prevention measures meet the required standard.
