By Marcela Ayres

BRASILIA, Feb 10 (Reuters) - Brazil's instant-payment system Pix is likely to account for half the nation's e-commerce transactions by 2028, widening its lead over credit cards, according to a new study.

The forecast, from payments firm Ebanx, highlights the rapid ascent of the system created and run by Brazil's central bank. Since its launch in late 2020, Pix has slashed cash use in Latin America's largest economy and in 2023 surpassed the combined number of credit and debit card transactions. (By value, Pix is the second most widely used payment method among Brazilians, trailing only traditional interbank transfers, which are typically used for very large transactions.)

It also drew scrutiny from the U.S. last year in a probe of what Washington called potentially unfair trade practices, questioning the central bank's dual role as the operator of Pix and regulator of the financial system.

Brazil's central bank has argued that it acts as a neutral provider of public digital infrastructure, enabling a more efficient, inclusive and competitive market, pointing to the entry of more than 70 million people into the financial system since Pix was introduced.

The payment system's growing footprint has pressured the share of card transactions, which U.S. firms Mastercard MA.N and Visa V.N dominate.

Long a stronghold of credit cards, Brazil's e-commerce market saw Pix account for 42% of online purchases last year, edging past credit cards at 41%, according to Ebanx.

Based on data from Payments and Commerce Market Intelligence $(PCMI)$, Ebanx projects Pix's online share will reach 45% by year-end and 50% in 2028, when its lead over credit cards is expected to widen to 14 percentage points.

Eduardo de Abreu, Ebanx's chief product officer, said the central bank's launch of a recurring-payments feature last year helped Pix gain further ground after initially taking off in person-to-person transfers.

Central bank data show consumer payments to businesses have been Pix's largest category by volume since September. In January, they made up 46% of total Pix transactions, compared with 40% for person-to-person transfers.

"There has been a lot of trust-building among consumers around Pix, combined with wider availability on websites," Abreu said.

He added, however, that credit cards are likely to retain a loyal base because of Brazil's ingrained use of interest‑free installments, especially for higher-ticket items, even when merchants offer shoppers discounts for upfront payment using Pix.

"Discounts are attractive and make mathematical sense. But people look at it and think: even with the discount, I can't pay everything this month. I'd be cash-strapped even though it's cheaper," he said.

"Installments increasingly serve the segment of the population that really needs that cash-flow flexibility."

(Reporting by Marcela Ayres; Editing by Ethan Smith)

((marcela.ayres@thomsonreuters.com; +55 11 5047-2444;))