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Why dLocal's Business Model is so successful?

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dLocal’s Company Overview


dLocal is a leading cross-border payment platform connecting global merchants to emerging markets. Its mission is to close the payments innovation gap that exists between developed countries and emerging economies. dLocal provides a seamless, reliable, and simple payment experience for billions of people that live in these markets. With a unique 360-degree approach to payments, the company enables global merchants to reach billions of consumers in emerging markets, while allowing these consumers to pay with their payment method of choice.

The business model of dLocal revolves around providing a single technology platform designed to handle and facilitate online payments across several emerging markets. The company offers a comprehensive set of payment solutions including local credit cards, cash payments, and bank transfers among others. By doing so, it eliminates the need for companies to manage separate pay-in and payout processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.

dLocal's revenue model is primarily based on transaction fees. These fees are charged to the global merchants for providing them with the infrastructure to accept and process payments. The company's revenue is directly proportional to the volume of transactions processed through its platform. Additionally, dLocal may also earn revenue from foreign exchange conversion when facilitating cross-border transactions, and from other value-added services it provides to its clients.

https://www.dlocal.com/

Headquater: Montevideo, Uruguay, Latam

Foundations date: 2016

Company Type: Private

Sector: Financials

Category: Financial Services

Digital Maturity: Digirati


dLocal’s Related Competitors



dLocal’s Business Model Canvas


dLocal’s Key Partners
  • Online Payment Platform
  • Retailers
  • Vendors
  • ECommerce providers
  • Financial networks
  • Acquiring banks
  • Marketplaces
  • Agencies
  • Tax & Legal Firms
  • Payment processors
  • Visa
  • MasterCard
  • Amex
  • Discover
  • Apple Pay
  • Amex
  • Mastercard
  • Diners
  • Elo and Hipercard
  • Brazil Boleto Bancario
  • Bank transfers
  • OXXO in Mexico
  • RapiPago in Argentina
  • Servipag in Chile
  • PagoFácil in Colombia
  • Red Pagos in Uruguay
  • Baloto in Colombia
dLocal’s Key Activities
  • Product development
  • Marketing
  • Security
  • Legal
  • Operations
  • Customer Support
dLocal’s Key Resources
  • Partnerships
  • Payment methods
  • DLocal currently supports 11 countries in Latin America
  • Partnerships with service providers
dLocal’s Value Propositions
  • The global payments platform for emerging markets
  • End-to-end payment solutions to global merchants and marketplaces across the world's fastest-growing marketplaces
  • Robust payment network and a comprehensive suite of payment products that meet the needs of a unique and diverse market
  • Aggregation of local protocols
dLocal’s Customer Relationships
  • Superior technology
  • Easy
  • Focused on emerging markets
  • Reputation
  • Fast
  • Efficient
  • Barriers reduced
  • Compliance
dLocal’s Customer Segments
  • Retailers and marketplaces worldwide
  • Cross-border consumers
  • Merchants in developing countries
  • http://dlocal.com/where-we-operate/
dLocal’s Channels
  • Direct sales
  • Website
  • Blog
dLocal’s Cost Structure
  • Operation cost
  • Maintenance cost
  • Development
  • Maintenance
  • Network
  • Teams
  • Legal
  • Office
  • Security
  • Platform
  • Customer acquisition and retention
  • Licensing and certification
  • Transaction costs
  • Taxes
  • Marketing
  • Rent
  • Employees
  • Help Center
  • Events
  • Automation
  • Travel
  • Payment options
  • DLocal's fees are on a per-transaction basis and are predetermined and fixed
dLocal’s Revenue Streams
  • They charge companies a fee for online transactions
  • Percentage commission from the merchants and a processing fee
  • Cross-border payment processing fee
  • 2% commission on each transaction

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dLocal’s Revenue Model


dLocal makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Brokerage
  • Pay as you go
  • Tradeable currency
  • Cashier-as-a-service
  • Transaction facilitator
  • Cash machine
  • Revenue sharing
  • Ecosystem
  • Affiliation
  • Orchestrator
  • Easy and low cost money transfer and payment
  • Disruptive banking
  • Customer loyalty
  • Customer data
  • Solution provider
  • Corporate innovation
  • Technology trends
  • Best in class services
  • Combining data within and across industries
  • Digital
  • Digital transformation
  • Digitization
  • Aikido
  • Blue ocean strategy
  • Self-service
Analytics


Market Overview
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  • Sectors
  • Categories
  • Companies
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dLocal’s Case Study


dLocal's CASE STUDY

As we chart the narrative of dLocal, a leading cross-border payment platform, we traverse its journey from inception in 2016 to becoming a beacon of innovation in financial services. dLocal's mission is clear: to close the payment innovation gap between developed nations and emerging economies. The journey we'll navigate today is not merely a tale of financial success, but also one of technological integration, social impact, and strategic foresight.

Redefining the Payment Landscape

dLocal began its operations from Montevideo, Uruguay, a region traditionally viewed as less tech-forward compared to Silicon Valley. Yet, it was within this context that dLocal discovered a glaring market inefficiency: the payments ecosystem in emerging markets was cumbersome and fragmented. Emerging economies struggled to keep pace with the payment innovations in developed nations. This disparity presented dLocal with a unique opportunity. Unlike conventional payment processors, what makes dLocal special is its 360-degree payment solution. By offering a single technology platform that handles payments for over 11 countries in Latin America and beyond, dLocal eliminates the need for businesses to juggle multiple local entities, pay-in, and payout processors. This one-platform-for-all approach is both innovative and pragmatic, vastly simplifying the operations for global merchants.

Customer Driven Approach

The functional needs dLocal addresses are diverse: simplifying transactions, integrating payment methods, connecting different financial entities, reducing risk, and cutting costs. But there are also deeper emotional and social impacts. In emerging markets, access to reliable financial services fosters a sense of affiliation and belonging in a global economy. This democratization of access is life-changing for many. Global merchants benefit from dLocal’s ability to accept an array of local payment methods. Local consumers in emerging markets can use not only major credit cards like Visa, MasterCard, and Amex but also localized payment options such as OXXO in Mexico and Boleto Bancario in Brazil. This approach has paid dividends. In fact, dLocal reported facilitating $7 billion in cross-border payments in 2022 (Source: Markets Insider).

Business Model and Strategic Execution

dLocal's business model thrives on transaction fees, forming a revenue stream directly proportional to transaction volumes. Additionally, the company benefits from foreign exchange conversion fees and other value-added services. This model aligns perfectly with their growth strategy, which leverages scalability and local market knowledge to increase transaction volumes steadily. A unique aspect of dLocal's strategy is its symbiotic partnerships. By collaborating with local entities like banks, legal firms, and marketplaces, dLocal mitigates regulatory risks and ensures compliance across different jurisdictions. These partnerships form the bedrock of dLocal's robust payment network. According to Alejandro Del Rio, a leading expert in fintech strategy, “What makes dLocal distinctive is its ability to marry local expertise with a global technological framework. This dual-focus reduces operational friction and enables unprecedented market penetration in regions traditionally deemed ‘high-risk’."

Data-Driven Growth

dLocal's business intelligence and data analytics capabilities are another compelling facet of their operations. The company leverages transaction data to refine and personalize payment experiences continually. Insights derived from data guide product development, marketing strategies, and operational efficiency. Cross-referencing multiple sources, including their partnerships and market data, enhances their ability to predict trends and adapt proactively. For instance, their focus on mobile payments aligns with the rising smartphone penetration in Latin America (Smartphone penetration in Latin America was at 67% in 2021, according to Statista).

Conclusion: A Vision for the Future

dLocal is not just a connector of payments; it’s a connector of economies. Its ability to integrate, facilitate, and scale payments across emerging markets is transformative. By focusing on the unique needs of both global merchants and local consumers, dLocal ensures that the innovation disparity in financial services continues to shrink. In emerging markets where every transaction can signify trust built and an economy strengthened, dLocal stands out not merely as a service provider but as a catalyst for change. While their journey is still unfolding, the insights gleaned thus far depict a narrative of ingenuity, resilience, and strategic brilliance that is fundamentally altering the landscape of cross-border payments. As we reflect on dLocal’s story, it's clear that their seamless yet sophisticated approach to payments is more than a business strategy; it's a vision meticulously executed, bridging worlds and enabling growth at every transaction.


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