Delivering payments to remote locations
In the US, a company can assume that almost everyone uses credit cards, but in emerging markets, only 20% of consumers use international credit cards, so localization is a must.
Many countries have complex currency restrictions though. Nigeria, for example, has different exchange rates for different products—the naira has more purchasing power when it’s used to buy a pilgrimage to Mecca than when it’s used to buy a vacation in France or an imported TV.
And getting payments to their intended recipient is also a challenge in places that have a less ubiquitous banking system. dLocal is a company that focuses on solving local payments in emerging markets, and helps companies large and small enter those markets.
dLocal works with over 450 merchants, including Spotify, GoDaddy, Uber, Booking.com, and Amazon. For any given company, entering a small developing market may not make sense, because setting up payments involves so much overhead.
Streamlining the financial movements of small businesses
In some of these markets, payments are handled by giving cash to delivery drivers, and a trusted method for handling this is a key element of growth. dLocal also quotes prices in local currency to both the buyer and the seller, simplifying pricing calculations. This requires dLocal to take some risk—if a customer pays Brazilian reals and dLocal promises the merchant dollars, it’s vulnerable to a decline in the real. But dLocal’s partners are willing to pay for this simplicity.
The company is growing rapidly, having more than doubled in size in each of the last four years, and a recent funding round made it the first billion-dollar startup in Uruguay and one of the most valuable fintech companies in South America. While some of the markets dLocal provides access to are small, they’re growing in importance: Brazil is one of Uber’s top five markets, for example, and Latin America represents 38 million of Netflix’s 204 million paying users.