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Brazil’s central bank has been forced to restrict the use of its Pix instant payments platform after a surge in “lightning kidnappings” where citizens have been snatched off the street and forced to make cash transfers in order to be released.
The groundbreaking Pix system was launched late last year to almost universal acclaim, but criminal groups have moved swiftly to take advantage of the new technology.
In a nation where citizens had long struggled with traditional banks’ slow — and costly — digital payments systems, the instantaneous Pix technology was hailed as a game changer. Almost 100m Brazilians have adopted the platform for paying bills and transferring cash.
The central bank, however, is now being forced to set restrictions on the until now 24/7 system because of a spike in flash kidnappings.
“These lightning kidnappings were kind of dormant. But since Pix entered the market in November last year, we have noticed a significant increase in cases,” Tarsio Severo, an investigator with the Department of Special Police Operations in São Paulo, told local media, adding that police had arrested 100 suspects involved in such cases since January.
In the first six months of the year, the state — which is home to 44m of Brazil’s 211m population — reported an almost 40 per cent increase in lightning kidnappings, prompting several banks to lobby the central bank, or BCB, to step up security measures.
Last week, it announced a number of actions, including a $200 transfer limit between individuals between the hours of 8pm and 6am; the creation of a minimum waiting time to increase transfer limits; and the ability for users to set different transaction limits during the day and at night, when robberies are more common.
Kidnappings have long plagued Brazil, but they were particularly prominent in the early years of this century in São Paulo and in Rio de Janeiro. Typically, wealthy citizens would be targeted as they left their homes or offices and either taken directly to an ATM for a cash withdrawal or held for a larger ransom. Many kidnappings ended violently and richer Brazilians often now drive cars with bulletproof and tinted windows as a form of prevention.
“In the past, the gangs carried out kidnappings and brought people to ATMs. But now with Pix, the central bank has put the ATM in people’s mobile phones. Crime will always find the easiest way,” said Rafael Alcadipani of the Forum for Brazilian Public Security.
“The central bank’s measures are positive as they help improve the security of the system, but it doesn’t solve the problem. You need to invest in police and have reforms so that criminals actually face the law. And we need to improve social conditions. An unequal country like Brazil will always have problems like these.”
Additional reporting by Carolina Pulice