What is PIX?
PIX is an instant payment method created by the BACEN (Central Bank of Brazil) to revolutionize the market. It promotes quick, real time, and direct transfers between people and/or companies. Working 24/7 and in a digital way, especially through smartphone apps, PIX brought more convenience, options, access and opportunities to all Brazilians.
PIX refunding mechanism
Before the PIX refunding mechanism started working, whenever a fraud or failure happened in a transaction, a bilateral agreement between the financial institutions that took part in that specific operation was required. According to the BACEN this was inefficient, since it turned the process slow and delayed the resolution of the cases.
Willing to improve this situation, the BACEN announced what is called “Mecanismo Especial de Devolução”, or in English: Special Devolution Mechanism. This mechanism brought a whole new set of rules to standardize the refunding process in the PIX system, and it was intended to make the process more agile for anyone that can be considered a victim of frauds, robbery or just errors.
How it works
There are two scenarios where PIX refunds are possible. One is when a failure in the system happens generating an error in the transaction, such as sending the money twice for the same receiver. The other case is when a fraudulent transaction takes place.
So, here is how the refund process works for each case:
For system failure/errors
The victim contacts the institution from where the PIX transaction took place (for example, the victim’s bank) and reports the error, which can be a transaction that was made twice, for example.
The victim’s institution places a refund request against the institution that received the transaction.
A refund is made and the money is transferred to the victim’s account within 24 hours.
For fraudulent operations
The victim contacts the institution from where the PIX transaction took place (for example, the victim’s bank) and reports a fraud suspicion.
If a fraudulent operation is confirmed, the victim’s institution places a refund request against the institution that received the money.
A refund is made and the money is transferred to the victim’s account.
The fraudulent transaction receiver is notified about a debit on his/her account.