Abstract

<jats:p>Deposits are the foundation of bank funding and financial stability. We investigate how Brazil's instant payment system, Pix, reshapes deposit dynamics. Pix, launched by the Central Bank of Brazil in November 2020, enables real-time transfers 24/7 at minimal cost. Using monthly bank-municipality panel data from 2010-2025, we examine how Pix changes bank deposit levels and their volatility. We take advantage of three important features of Pix that facilitate identification. First, participation in Pix was mandatory for large banks, making the reform exogenous to bank characteristics and eliminating selection bias. Second, adoption and usage decisions were made by consumers and firms after launch, generating variation in Pix intensity across banks and municipalities. Third, the shift from traditional payment instruments to instant transfers was unanticipated, creating a quasi-natural experiment in deposit dynamics. First, we find that Pix significantly increases bank deposits, consistent with greater financial inclusion and faster money circulation. Second, Pix increases deposit volatility locally, reflecting faster reallocation of funds across institutions. Third, Pix reduces deposit volatility at the national bank level, suggesting banks benefit from geographic diversification of deposit flows. We validate these findings by analyzing a large temporary shock to public trust in Pix in January 2025 triggered by fake news regarding taxation. During that episode, deposit levels temporarily dropped and their volatility spiked. Overall, our study demonstrates that fast payment innovations significantly transform the way how banks attract and retain deposit funding.</jats:p>

Abstract

Instant payment systems have rapidly gained global traction by enhancing transaction efficiency, yet evidence remains limited on how their designparticularly interoperabilityshapes market structure. We exploit Peru's 2023 interoperability mandate as a quasi-natural experiment using a difference-in-differences design. Mandated interoperability increased deposit market concentration by approximately 2%. Incumbent banks linked to the dominant digital wallet expanded their deposit market share by nearly 10% and reduced deposit interest rates by 5080 basis points. We also observe more branch closures in high-adoption areas and declining microcredit. A model explains these results through an “amenity shock,” boosting digital wallet convenience for all adopters. Due to network externalities, the largest incumbent wallet captures a disproportionate share of new users in dual-platform markets an “amenity effect” that ultimately increases concentration. By contrast, in single-platform regions, interoperability lowers barriers for new providers an “entry effect” that spurs competition and erodes incumbent dominance. Our results show that this amenity effect in dual-platform cities outweighs the entry effect elsewhere. Overall, our findings show competitive effects of interoperability mandates critically depend on initial market structure and distribution of platform market shares.

Abstract

: Instant, or fast, payments are credit transfers completed and settled within seconds or minutes. They have low costs, reduce payment risk, and have significantly replaced the use of cash, cards

Abstract

<jats:p>The United States operates two ISO 20022 instant payment networks — the Federal Reserve's FedNow Service and The Clearing House's RTP® — yet fewer than 1,700 of the nation's 10,000+ eligible financial institutions are connected to FedNow and fewer than 1,100 to RTP. The central barrier is legacy core banking integration: 73% of non-connected institutions cite their existing core systems as a moderate-to-severe obstacle. This paper presents OpenFedNow, an open-source dual-rail middleware layer that bridges legacy core banking platforms (Fiserv, FIS, and Jack Henry) to both instant payment networks simultaneously. The architecture comprises five layers: Rail Gateways, an Anti-Corruption Layer, a Shadow Ledger, a Saga Orchestration engine, and Vendor Adapters. The design draws directly on production experience building PIX integration at Santander Brazil — one of the most demanding real-time payment deployments in the world — and adapts that architecture to the structural requirements of U.S. rails. All three vendor adapters are complete and the project is released under Apache 2.0.</jats:p>

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.

Abstract

PurposeIn this article, the research objective is to empirically investigate the effect of the adoption of the Brazilian instant payment system, Pix, on the local credit market structure and the diversification of the banking system in Brazilian municipalities.Design/methodology/approachBy analyzing the data, in this study, we compile and align data from supervisory and public sources, covering the period from 2019 to 2022 in Brazil. As of 2014, Brazil was comprised of 5568 municipalities distributed across five regions: North (450 municipalities), Northeast (1792), Midwest (467), Southeast (1668) and South (1191), according to the Brazilian Institute of Geography and Statistics (IBGE). Our analysis relies on the volume and quantity of Pix to the outstanding credit operations in Brazil.FindingsThis article provides evidence that the widespread adoption of Pix has impacted the financial structure of municipalities. This analysis of banking concentration in the country and municipalities, based on banking relationships, helped us assess whether the adoption of Pix had any correlation with the increase in credit lines. Overall, the results from the statistical tables suggest that the adoption of Pix may be having a positive impact on the local credit market structure.Originality/valueThe originality contribution of the study is to initiate an investigation into the impact of this instant payment system, Pix, on the Brazilian reality. Pix was launched in 2020, amid the COVID-19 pandemic, and had significant numbers, such as over 61% of the adult population having at least one Pix key registered in a little over a year; about 100 million people made at least one payment with Pix; and more than 1.4 billion transactions per month, with 72% between individuals, as presented by the REB 2021.

Abstract

The article examines the evolving U.S. payment systems market, focusing on rapid payment technologies such as FedNow, Real-Time Payments (RTP), Automated Clearing House (ACH), and the adoption of fedwire iso20022 standards. The paper shall expound on the challenges and the opportunities that the innovations bring, particularly for small financial bodies like the Credit Unions. We examine with the help of complex studies how such bank structures as Bank of America and Coastal Credit Union have effectively implemented FedNow and RTP to achieve faster, safer, and more satisfactory payments. The article also goes into the importance of fedwire iso20022 in enhancing interoperability and data management between systems. The discussion of the paper assesses the significance of current payment structures through their significance in the financial commercial activity, especially regarding their potential to sustain continuity and conform to consumer demands for convenient, quick, and secure payments in business and financing operations. Lastly, the paper provides a hint of the direction that payment systems are moving and the effects that they can have as far as the economy is concerned.

Abstract

<jats:p>&lt;p&gt;&lt;span&gt;A business sends an urgent $250,000 payment to a vendor through its bank’s new instant payment service. Seconds later, the payment is final and irrevocable, and the business realizes that it sent the money to the wrong account. Its only recourse is to ask the recipient to return the funds voluntarily. If the recipient refuses, the remedy is litigation.&lt;/span&gt;&lt;/p&gt; &lt;p&gt;&lt;span&gt;This scenario is not hypothetical. It is the legal reality facing businesses that use FedNow or the RTP network, the two instant payment systems now available through thousands of U.S. financial institutions. Instant payments settle in seconds, operate 24/7/365, and become immediately and irrevocably final. These features are transformative for cash flow management and business operations. They are also legally consequential in ways that many businesses, and many of their lawyers, do not yet fully appreciate.&lt;/span&gt;&lt;/p&gt;&lt;span&gt;This Article provides the first comprehensive doctrinal analysis of how immediate payment finality affects business transactions and commercial law. It examines how FedNow and RTP differ from ACH and wire transfers and how existing legal frameworks apply when payments become final within seconds. Although those legal frameworks generally remain unchanged, immediate finality creates unresolved questions concerning cancellation rights, error reporting, security procedures, and damages limitations that were far less significant in traditional payment systems. Among other conclusions, the Article argues that error-reporting periods should be measured from the sender’s practical ability to discover an error rather than from settlement itself, because finality occurs before discovery is realistically possible. The Article also provides a framework for businesses and their counsel choosing among payment systems, identifying when instant payments are advantageous and when their irrevocability makes traditional alternatives preferable.&lt;/span&gt;</jats:p>

Abstract

PurposeThe article presents the uptake and development of instant payments across countries representing various geographies with diverse economic and social backgrounds. It identifies the critical success factors for the rapid adoption of instant payments.Design/methodology/approachThis study features five country cases where instant payments swiftly alter payment landscapes. These are Brazil’s PIX, India’s UPI, USA’s FedNow, Poland’s Express Elixir and BLIK, and the EU-wide SCT Inst. It discusses and compares all the country cases in detail.FindingsThe analysis identified success factors driving the widespread adoption of instant payments. It categorises these factors into five groups, each illustrated by country examples with their respective instant payment systems: regulatory support, an open ecosystem, and inclusive collaboration, network effects on the supply side of the market, network effects on the demand side of the market, and constant development through use and security improvements.Practical implicationsThis article offers valuable insights for policymakers and developers of instant payment schemes and systems on enhancing network effects and accelerating the adoption of instant payments.Social implicationsThe introduction of instant payments has profound implications for consumers and businesses. Consumers worldwide increasingly demand real-time payments that are available around the clock. Businesses seek streamlined cash management services that offer faster money flows, helping them reduce risk and exercise more precise control over working capital.Originality/valueThe findings contribute to a better understanding of instant payment adoption in various regions and countries, considering their unique characteristics.