In a significant stride towards expanding its global presence, dLocal, a Uruguayan payments company, has successfully obtained a payment institution license in the United Kingdom. This development marks a critical point in the company’s journey, as it enhances its portfolio of international regulatory licenses and sets the stage for entering a competitive fintech landscape. By leveraging this license from the Financial Conduct Authority (FCA), dLocal not only opens doors to U.K. merchants but also fortifies its strategy of catering to businesses operating in emerging markets.
The acquisition of the U.K. payment institution license allows dLocal to onboard merchants in the region through its subsidiary, Larstal Limited, trading as AstroPay. Previously, AstroPay faced limitations in client onboarding due to regulatory constraints following the U.K.’s exit from the European Union. The new licensing arrangement resolves these issues, enabling dLocal to provide localized services. This is a remarkable shift that aligns smoothly with dLocal’s commitment to series of strategic expansions targeting key emerging markets around the world.
dLocal distinguishes itself from established domestic competitors, such as Worldpay and Checkout.com, by focusing primarily on emerging markets, with an impressive footprint in Latin America, Africa, and Asia. Pedro Arnt, dLocal’s CEO, emphasizes that the company is uniquely positioned to support U.K. merchants due to its deep understanding of the regulatory and operational challenges in these dynamic regions. This focus allows dLocal to cater to companies which are not only seeking to enter these markets but also require a reliable payment processing partner familiar with their complexities.
The United Kingdom is increasingly recognized as a hub for global enterprises looking to expand into emerging markets. Companies from America and Asia are establishing their bases in the U.K. to facilitate entry into regions such as Africa and Latin America. As a licensed payment provider, dLocal aims to attract these global merchants, ensuring they have the correct financial tools to effectively manage their transactions and payment needs in foreign markets.
Founded in 2016, dLocal has rapidly established itself as a dominant player in Latin America’s payment sector, specializing in cross-border payment solutions. The firm’s portfolio currently spans multiple countries, including Brazil, Mexico, Colombia, and its home territory of Uruguay. With this latest license, dLocal plans to intensify its operations in the U.K., exploring avenues to expand its workforce and enhance its service offerings. This is exemplified by the presence of senior executives based in London, indicating a strong commitment to the U.K. market.
While the new license presents a wealth of opportunities for dLocal, it also exposes the company to fierce competition within the U.K.’s well-established fintech ecosystem. With giants like PayPal, Stripe, and Revolut already operating in the region, dLocal must carve out its niche effectively. Its focus on services tailored for specific emerging markets may provide the edge necessary to attract businesses that require those specialized offerings.
Despite a challenging period following its public listing on the Nasdaq in 2021 — when the company achieved a remarkable $9 billion valuation — dLocal’s market capitalization has since declined to approximately $3.4 billion. Yet, the stock has seen a resurgence of nearly 40% in the past six months. Amidst ongoing speculation regarding a potential acquisition, Arnt maintains that dLocal is not currently for sale, emphasizing the company’s commitment to leveraging its status as a public entity, which enhances transparency and commercial trust in the developed markets.
As dLocal moves forward, its recent regulatory achievement in the U.K. is just one phase in a broader journey toward solidifying its international presence. The focus on emerging markets, combined with ongoing strategic initiatives, will likely empower dLocal to not only survive but thrive in competitive environments—allowing it to grow its merchant base and enhance its service offerings while navigating the complexities of global payments. The future indeed looks promising, as the company builds on its unique value proposition for global enterprises keen on exploring emerging market opportunities.