Despite vast evidence of the benefits of low-cost instantaneous payment technology, several agents worry about the substitution this innovation would cause in the payment sector and the disruption in the banking sector. In this paper, we use an instrument and individual level data on all major types of payment methods in Brazil to study the effects of a new payment technology, Pix, on the usage of other payment technologies. We find evidence supporting the increase in the usage of credit cards, debit cards, TED, and Boleto by firms and individuals due to the increase in the number of users of Pix. We also find evidence suggesting an increase in the use and optimization of bank accounts. Our results suggest that not only firms and people tend to gain from the development of new payment technologies, but also the payment and the banking sectors.
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