Spotify tie-up can help Pix keep eating away at cards’ market share

Article by Will Paige | Jun 15, 2023

The news: Spotify added Pix as a payment option for Premium users in Brazil, according to a company release.

How we got here: Run by Brazil’s central bank, Pix has been a big success since its November 2020 launch.

The instant payment system is hugely popular and inclusive. It lets users make fast and free electronic payments without needing a bank account.
Monthly transactions hit 3 billion in March, and cash transfers top credit card payments, according to the Central Bank of Brazil.
And being cheaper than traditional card payments for merchants has helped it become the most used payment method in Brazil, per the central bank.

Why the tie-in makes sense:

Adding a cheaper, quicker, and more popular payment method could convince more users to pay for Spotify Premium.
For Pix, partnerships with major global brands like Spotify—expanding its operations beyond peer-to-peer payments and into retail—can increase volume and user numbers.

Pix can use partnerships and new product features to sustain growth and eat into payment cards’ market share. Tie-ins with Spotify and Banco do Brasil, which enabled Pix payments through WhatsApp, will help do that. And going live in other Latin American countries should also attract more users and volume.

Multinationals beware: Pix and India’s Unified Payments Interface (UPI) are both major domestic payment success stories—and should be a warning to card networks as fee pressure intensifies and domestic networks scale cross-border.

Pix’s market-leading position in Brazil could also temper foreign payment companies’ expansion plans in the market. And don’t be surprised if central banks in other countries in Latin America and Southeast Asia try to replicate Pix and UPI.