Brazil: CAIXA details PIX risk measures as lottery network raises ongoing concerns

Caixa Econômica Federal presented a series of measures aimed at reducing risks in Brazil's instant payment system PIX transactions carried out through lottery outlets during a February 13 meeting with FEBRALOT and state unions.

The discussions focused on the Special Return Mechanism, known as MED, which is regulated by the Banco Central do Brasil. According to CAIXA, there have been no changes to the MED framework, and oversight remains under the Central Bank, reports BNLData.

The MED allows disputed PIX transfers to be blocked and potentially returned in cases of suspected fraud or operational failure. The process begins when the payer’s bank notifies CAIXA, triggering a precautionary block on the disputed amount.

The case is analyzed within seven days. If no evidence of fraud is found, the funds are released; if the claim is upheld, the amount is returned to the payer. Customers have up to 80 days to dispute a transaction, a timeframe lottery representatives argue makes it difficult for outlets to defend themselves.

CAIXA said the Central Bank has instructed individualized reviews of notifications involving lottery accounts, taking into account each unit’s activity, history, and operational profile. When undue charges of interest and IOF, the Tax on Financial Operations, are identified in connection with these cases, the amounts will be refunded to lottery establishments.

Concerns remain over the immediate debiting of disputed amounts once a claim is filed, which requires operators to cover the sum from their own funds while investigations are ongoing. In addition, PIX transactions can be suspended for seven days following a dispute, regardless of the amount involved.

Representatives also cited the impossibility of reversing bets once registered in CAIXA’s system and called for specific systemic treatment for lottery operations, along with greater legal certainty for banking correspondents.

CAIXA outlined five measures to mitigate exposure. These include the creation of a dedicated defense workflow with specialized staff, reducing QR code validity to 10 minutes, implementing user identification for PIX transactions from February 23, suspending Pix Withdrawal and Pix Change from March 16, and, by March 31, conditioning transaction completion on identification of the same paying or issuing user.

CAIXA is also committed to adding further resources to the process to mitigate risks through the end of March 2026, though no definitive structural solution was presented.

A positive element was described as “the identification of the user making the PIX payment,” since in practice, this action, which is already used in the withdrawal process, tends to be more effective. With this information in hand, added to the request for an official document with a photo (ID card, driver's license, work card, passport, etc.), only the account holder will be able to make payments via PIX.

By contrast, the “Suspension of Pix Withdrawal and Pix Change” was viewed negatively by sector representatives, who said it penalizes both retailers and customers.

Lottery operators report recurring fraud patterns under MED. In Mogi das Cruzes, one outlet faced a R$18 ($3.44) refund without explanation and a week-long PIX block imposed by other institutions during investigation.