DLocal is one of the most prominent payment companies in Latin America. It specializes in cross-border payments for emerging markets such as Brazil, Mexico, Colombia and its home country of Uruguay.
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LONDON – Uruguayan payments company dLocal has obtained a payment institution license in the UK, adding to the company's growing regulatory licensing portfolio as it consolidates global expansion.
The emerging markets-focused fintech company told CNBC that it has obtained an authorized payment institution license from the Financial Conduct Authority, Britain's financial services regulator. This would allow it to start onboarding UK merchants for the first time.
DLocal will onboard UK merchants through a local entity, Larstal Limited. The subsidiary, which trades in the UK as AstroPay, had previously been unable to onboard customers locally due to restrictions imposed on it by the Financial Conduct Authority (FCA). DLocal said the restrictions were a result of the UK's exit from the European Union.
dLocal CEO Pedro Arnett told CNBC that he expects the company to stand out among its local payment technology competitors, 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 UK is the geographies that we serve them in, and those are the only geographies that we operate in,” Arndt said in an interview. He added that dLocal is also targeting global merchants with a presence in the UK.
“The UK has become a hub for many global companies – even US companies, some Asian companies – to expand into emerging markets, especially in Africa, and in some cases in Latin America,” Arendt told CNBC.
Expansion plans in the UK
Founded in 2016, dLocal is one of the most prominent payment companies 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 payment license now under its belt, dLocal is looking to strengthen its presence in the UK, with plans to increase headcount and grow the business.
Arndt said dLocal has already expanded its presence 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. Globally, dLocal currently has more than 1,000 employees.
A key advantage a UK payment 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 needs, Arnett said. DLocal now has more than 30 licenses and registrations worldwide.
However, dLocal will face some stiff competition. Britain already has an established fintech ecosystem with many well-capitalized players in the payments world operating there, including PayPaltape, AdenCheckout.com, Mollie, and Revolut — to name a few.
“Not for sale”
DLocal went public on the Nasdaq in 2021, achieving a $9 billion valuation at the time. It has seen its market value decline since then. As of Tuesday, the business was valued at $3.4 billion. However, the stock is up about 40% in the past six months.
last month, Reuters reported dLocal was in the process of exploring a potential sale. When asked about the takeover speculation by CNBC, Arndt said he didn't want to comment on the rumours, but clarified that dLocal is not currently for sale.
Overall, Arndt said, being a public company comes with a level of transparency and oversight that he sees as “commercially positive.” Sometimes, he added, “rumors will surface that someone is interested in the original — but I don't suppose there's much of that.”
Although there would be a fiduciary duty to shareholders to consider acquisitions, Arndt said that for now, “the company is not for sale.”
