Brazil's iGaming Landscape - Insights on PIX and Regulatory Shifts

Brazil's iGaming industry is thriving, with the online sports betting market alone projected to reach €0.55bn this year and €1.57bn by 2028. However, the payments landscape is undergoing significant changes, driven by regulatory shifts in licensing requirements for Payment Service Providers (PSPs) and the rapid adoption of the PIX instant payment method.

As merchants scramble to adapt their payment strategies, this week’s Praxis Times features an interview with our CTO Guy Karsenti to gain insights on what businesses operating in this market should be aware of.

Fresh from an extended business trip to Brazil, which included attending the prestigious SBC Summit Rio, Karsenti shares his expertise on the evolving iGaming and payments landscape.


With Brazil's online sports betting market projected to reach €0.55bn in 2024 and €1.57bn by 2028, it's clear that the iGaming sector is thriving. What do you see as the key factors driving this growth, and how has the adoption of PIX instant payments contributed to this expansion?

There are several factors fueling the growth of Brazil's iGaming market, but the widespread adoption of PIX has undoubtedly been a game-changer as far as payment operations are concerned. In just a few years since its introduction, PIX has become the preferred payment method for over 90% of iGaming customers in Brazil, overtaking traditional card payments.

This shift has led to a staggering 28.5 billion PIX transactions annually in Brazil, making it the second-largest adopter of instant payment methods globally, second only to India's UPI. By enabling customers to make deposits and withdrawals quickly and securely, PIX has significantly enhanced the user experience and helped to drive the growth of the iGaming industry.

PIX is fundamental to the success of our merchants operating in Brazil and we’re investing significant resources to further enhance their payment experiences.

Soon we’ll launch a new feature we call ‘PIX Cascading’ which we are very proud of. If, for any reason, one PSP used to facilitate a PIX transaction encounters an error or decline, the transaction will be smartly re-routed to an alternative PSP's PIX system, ensuring the end customer doesn't experience a failed or declined transaction.

Declined card-not-present (CNP) transactions can happen for various reasons, but for PIX, this is usually the result of a failure related to the individual CPF PIX key. While customers see a simple QR code when making a deposit, on the back-end, there are standards on how to handle validation on pay-in-pay-outs on CPF.

Knowing when to allow or not allow transactions is where Praxis shines in mitigating fraud and adhering to rules, including linking a player's own data on an iGaming platform to their unique PIX key.

This feature, combined with our existing suite of decline recovery, conversion, and retention tools, demonstrates our commitment to helping our merchants thrive in Brazil's dynamic iGaming market.

As the iGaming sector in Brazil continues to grow, there are also significant legislative changes on the horizon that will impact Payment Service Providers (PSPs) operating in Brazil. Can you shed some light on these upcoming regulatory shifts and what they mean for merchants?

The Brazilian government is introducing new regulations that will require PSPs to obtain additional licenses to transfer funds out of the country. Under these new rules, gaming operators will need to settle their foreign exchange processes within Brazil and only send out their net profit as FX.

For merchants, this means that they'll need to partner with PSPs that are fully compliant with these new regulations and are ready to process their payments from day one of the rule change.

It's crucial for merchants to proactively adapt by seeking out payment platforms that can ensure seamless payment operations under the new regulatory framework.

Given the dominance of PIX in Brazil's iGaming landscape, what strategies can merchants employ to optimize their PIX payment processes and maximize conversion rates?

There are plenty of PIX providers out there for merchants to choose from. Praxis is connected to many of these and has put in the time and effort to really optimize our PIX payment methods. Our goal is to provide the best conversion rates possible in this ecosystem.

For any of our existing merchants reading this, this won’t come as a surprise. Some are seeing improvements in their transaction approval rates of up to 8-9%, which is a substantial boost that can make a real difference to their bottom line.

As we look to the future of payments in Brazil's iGaming sector, what emerging trends or innovations do you see shaping the landscape, and how can merchants best prepare themselves to adapt to these changes?

One of the most significant trends we're seeing is the potential for further regulatory changes that could limit the payment methods available to iGaming customers in Brazil. The government is considering authorizing only PIX as an approved payment method for sports betting and iGaming, likely as a measure to promote responsible gambling and prevent the use of credit cards for betting.

This would likely see a requirement for merchants to link a player’s account ID to their unique PIX key, so as to ensure they can only bet money that is already in their bank account.

Another key trend is the continued expansion of PIX beyond Brazil's borders, with the instant payment method now available for Brazilian tourists in countries like Uruguay and Argentina. As PIX gains traction in the region, merchants may find new opportunities to extend their reach and tap into new customer bases.

As the industry continues to grow and mature, merchants who proactively adapt to these changes by partnering with experienced payment platforms will be well-positioned to capitalize on the vast potential of this exciting market.