Latin American Stripe rival dLocal acquires UK payments license

LONDON — Uruguayan payments firm dLocal has secured a U.K. payment institution license, adding to the company’s growing portfolio of regulatory authorizations as it furthers global expansion.

The emerging markets-focused fintech told CNBC it had acquired an authorized payment institution license from the Financial Conduct Authority, which is Britain’s financial services regulator. That would allow it to start onboarding U.K. merchants for the first time.

DLocal will onboard U.K. merchants through a local entity, Larstal Limited. The subsidiary, which trades in the U.K. as AstroPay, was previously unable to onboard clients locally because of restrictions placed on it by the FCA. DLocal said the restrictions were the result of the U.K.’s exit from the EU.

Pedro Arnt, dLocal’s CEO, told CNBC he expects the business to stand out from domestic payment tech 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 of our U.K. base of merchants is that the geographies where we serve them, and those are the only geographies we work,” Arnt said in an interview. He added that dLocal is also targeting global merchants that have a U.K. presence.

“The U.K. has become a hub for many global companies — even the American companies, some Asian companies — for their emerging market expansion, primarily in Africa, and in some cases LatAm,” Arnt told CNBC.

Established in 2016, dLocal is one of Latin America’s most prominent payment players. It specializes in cross-border payments for emerging markets such as Brazil, Mexico, Colombia and its home country Uruguay.

With a payment license now under its belt, dLocal is looking to boost its U.K. footprint, with plans to increase headcount and grow business.

Arnt said dLocal has already been expanding its U.K. footprint, with a number of its senior executives — like Chief Operating Officer Carlos Menendez and Chief Revenue Officer John O’Brien — based in London. Globally, dLocal currently has over 1,000 employees.

Arnt said a major benefit the U.K. payment license will bring dLocal is recognition as a “licensed partner” that companies in the developed world can trust to handle payments in emerging markets with complex regulatory needs. DLocal now holds over 30 licenses and registrations worldwide.

Still, dLocal will come up against some fierce competition. Britain already has an established fintech ecosystem with numerous well-capitalized players in the world of payments operating there, including PayPal, Stripe, Adyen, Checkout.com, Mollie and Revolut — to name a few.

DLocal went public on the Nasdaq in 2021, notching a $9 billion valuation at the time. It’s seen its market capitalization decline since then. As of Tuesday, the business was worth $3.4 billion. Still, the stock has risen about 40% in the past six months.

Last month, Reuters reported dLocal was in the process of exploring a potential sale. When asked about buyout speculation by CNBC, Arnt said he didn’t want to comment on rumors, but clarified that dLocal isn’t currently for sale.

All in all, Arnt said, being a public company comes with a level of transparency and oversight that he sees as “positive commercially” for it. At times, he added, “rumors will emerge that someone’s interested in the asset — but I wouldn’t assume there’s too much to that.”

“While there would be a fiduciary duty to shareholders to entertain takeovers, Arnt said that for now, “the company is not for sale.”