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Hi Giro,

Thanks for the posts about dLocal. They are great!

I have a few comments/questions. Please, consider that they are not coming from an expert.

1. SOW:

I don't know if an increase from 6,1% to 12,8% in the 10 TOP merchants is possible.

a. In my opinion, when companies such as Uber, Netflix, or Facebook are getting "mature", they will seek a reduction in costs and increase in profitability (4% of transaction costs seems high to me). That could include a strategy of "going local" by having local entities in the major markets (BR, MEX, CHI, COL) to reduce costs.

b.These companies would also “go local” in order to accept local payment methods, like PIX.

c. Also, competition is hard if we consider other providers like Stripe, Fiserv, Adyen, PayPal, or Worldpay (https://reprints2.forrester.com/#/assets/2/511/RES176345/report). I don’t know if its going to be easy for dLocal to have such an increase.

How did you consider these points?

2.Net Take Rate: impact of inflation.

How did you consider an increase in Scheme Fees costs due to inflation? MC and Visa charge the acquirers with % and fixed fees that could change in order to be updated vs inflation (https://edition.cnn.com/2022/05/18/economy/credit-card-swipe-fees-inflation/index.html)

I don’t know if dLocal would have the ability to translate those costs to their customers.

Looking at the model, it’s clear that you are considering a decrease in the Net Take Rate, but I don’t know if you considered this point.


In my opinion, the participation of PIX in the TAM calculations for Brazil is low. The expected participation in online payments is almost 6% for 2025 (141,4 / 2297,6), but I think that it will easily reach 20%.


At first glance, I think that these numbers as super high. Let's check, for example, the change in Working Capital expected for 2022: USD 319 MM. In the first quarter, cash generated by changes in Working Capital was USD 77MM, aligned with those numbers. However, this is because of an Increase in Trade and other payables (+USD 69 MM). But historically, this number has been much lower. For example, in the first quarter of last year was USD 7MM.



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