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DLocal is one of the most prominent payment players in Latin America. It specializes in cross-border payments for emerging markets such as Brazil, Mexico, Colombia and its home country, Uruguay.
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LONDON – Uruguayan payments firm dLocal has secured a UK payment institution licence, adding to the company’s growing portfolio of regulatory authorizations as it furthers global expansion.
The emerging markets-focused fintech told CNBC that it had acquired a payment institution license authorized by the Financial Conduct Authority, which is Britain’s financial services regulator. That would allow them to start onboarding UK traders for the first time.
DLocal will ship UK merchants through a local entity, Larstal Limited. The subsidiary, which trades in the UK as AstroPay, was previously unable to onboard customers locally due to restrictions imposed by the FCA. DLocal said the restrictions were a result of the UK’s exit from the EU.
Pedro Arnt, CEO of dLocal, told CNBC that he expects the business to stand out from domestic payment technology rivals such as Worldpay and Checkout.com, given its focus on emerging markets in places like Latin America, Africa and Asia.
“The differentiating factor for us when we think about our merchant base in the United Kingdom is that the geographies where we serve them, and these are the only geographies we work,” Arnt said in an interview. He added that dLocal is also aimed at global traders who have a presence in the UK.
“The United Kingdom has become a hub for many global companies – even American companies, some Asian companies – for their emerging market expansion, mainly in Africa, and in some cases LatAm,” Arnt told CNBC.
UK expansion plans
Established in 2016, dLocal is one of the most important payment players in Latin America. It specializes in cross-border payments for emerging markets such as Brazil, Mexico, Colombia and its home country of Uruguay.
With a payments license now under its belt, dLocal is looking to strengthen its footprint in the UK, with plans to increase staff and grow the business.
Arnt said dLocal has already expanded its footprint in the UK, with a number of its senior executives – such as Chief Operating Officer Carlos Menendez and Chief Revenue Officer John O’Brien – based in London. Worldwide, dLocal currently has more than 1,000 employees.
Arnt said a major benefit that the UK payments license will bring to dLocal is recognition as a “licensed partner” that businesses in the developed world can trust to handle payments in emerging markets with complex regulatory requirements. . DLocal now has over 30 licenses and registrations worldwide.
However, dLocal will face some fierce competition. Britain already has an established fintech ecosystem with numerous well-capitalized players in the payments world operating here, including PayPalstrip, AdyenCheckout.com, Mollie and Revolut – to name a few.
“Not for sale”
DLocal went public on the Nasdaq in 2021, notching a valuation of $9 billion at the time. It has seen its market capitalization decrease since then. As of Tuesday, the business was worth $3.4 billion. Still, the stock is up about 40% over the past six months.
Last month, Reuters reported dLocal was in the process of exploring a potential sale. When asked about the buyout speculation by CNBC, Arnt said he didn’t want to comment on the rumors, but clarified that dLocal is not currently for sale.
All in all, Arnt said, being a public company comes with a level of transparency and oversight that he sees as a “business positive” for it. Sometimes, he added, “rumors will emerge that someone is interested in the asset – but I don’t suppose there is too much to that.”
While there would be a fiduciary duty to shareholders to entertain the acquisition, Arnt said that for now, “the company is not for sale.”
