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Incredible success stories are often born of simple concepts, and for payment processing firm dLocal, that tiny seed was Brazil’s Boleto Bancario. As CEO Pedro Arnt explains, this quirky yet widespread payment method gave his company the edge over larger global merchants that were moving into the local market.
“Essentially, you take a physical invoice to the bank teller, you whip out your cash, you pay the bank teller and then the bank associates that payment with the physical invoice you had produced,” Arnt tells The CEO Magazine.
“Ten years ago, this was actually very relevant in Brazil, but when global merchants arrived in that market, this was something that they simply were not built to offer in any way in their home markets.”
Credit cards had become the norm elsewhere, so dLocal decided to specialize instead in this unique payment method, but to broaden its scope across other emerging markets too. That was the first inflection point, according to Arnt.
“It was understanding that small problem likely existed across hundreds of payment methods and dozens of markets,” he says. “So rather than try to solve more things in Brazil, we decided to get really good at solving these payment methods across emerging markets.”
“We’ve become a scale player where at the size we now are, we’re able to use that scale to the benefit of our merchants in each of the markets where we operate.”
The second inflection point, in Arnt’s view, was the adoption of its stance as a global south champion – something of a rarity with companies largely choosing to categorize themselves as national, regional or global.
“We very quickly understood something counterintuitive and that was that although payments are extremely local and you have to build piping and rails and regulatory infrastructure to solve for every country, there’s a broad commonality in the types of challenges you’re facing.
“It’s legacy antiquated technology stacks shifting in unclear regulatory environments, convoluted tax codes, payment methods that are built for physical solutions and not very well thought out in the digital world.”
This analog approach, evident across the entire emerging market footprint, was something that Uruguay-founded dLocal had already become adept at tackling in Latin America. And so Arnt decided to take this nous and put it to use in both Africa and Asia.
The third inflection point for dLocal was that, by year five, it had already accrued sufficient scale to become a publicly listed company on the NASDAQ.
“There’s a validation that comes with that and that was very, very helpful,” Arnt says.
“I think the fourth inflection point is where we are today, which is we’ve become a scale player where at the size we now are, we’re able to use that scale to the benefit of our merchants in each of the markets where we operate.
“So rather than a Fortune 500 company having to go alone and negotiate on behalf of its own volume in each of these markets, we aggregate the volumes of multiple Fortune 500 companies and are able to be more effective on behalf of our merchants because of that aggregate scale.”
As a result of this stellar growth, dLocal has adopted a new company slogan: Markets of the Future. It represents a move away from the stereotypical perception of the developing world as backward or digitally unsophisticated, according to Arnt.
“It’s actually exactly the opposite,” he stresses. “Part of that complexity comes from the fact that both growth and innovation in financial services reside in the developing world over the next 20 years,” he says.
With the need for financial inclusion so strong in these markets, innovation has become king with the rise of alternative payment methods such as UPI in India and Pix in Brazil among the most exciting manifestations.
“These are all advanced technological financial infrastructure originating in the global south,” Arnt points out. “So we’re trying to convey the concept of the future both in terms of the sophistication of the financial infrastructure and in terms of where a majority of the world’s rising middle class and rising youth reside.”
“This is not a one-size-fits-all approach.”
dLocal’s point of differentiation is its recognition of these local realities, working closely with partners like Fiserv Argentina.
“This is not a one-size-fits-all approach, which I would argue the world of credit cards is,” he continues. “And even when the technology is seamless across markets, like for blockchain, the regulatory environment and the usage patterns are far from it.
“So you need to embrace that fragmentation and that local reality. And what that means in practical terms is you need to have feet on the ground and you need to be solving for each of your markets with local stakeholders, banks, regulators, acquirers, merchants and primarily consumers.”
The real impact of such initiatives is tangible, which makes working at dLocal incredibly rewarding in Arnt’s view.
“This translates to a student in Nigeria who needs access to Google tools to be able to prosper at university and get a degree or be the first person in his family to complete a university degree,” he says. “It’s a small shopkeeper in Quito, Ecuador, who needs to pay his subscription for an online bookkeeping solution that he uses for managing his small business.
“It’s a consumer somewhere in Kuala Lumpur who’s able to purchase something on credit because the global commerce platform that he uses is now able to offer local buy now, pay later solutions to him.”
“With agentic commerce, with blockchain, with alternative and local payment methods, the pace of change is just breathtaking.”
It’s a constant learning curve for Arnt, he admits, particularly as the pace of change gathers momentum.
“Ten years ago this was sort of a slow, stodgy industry. Now with agentic commerce, with blockchain, with alternative and local payment methods, the pace of change is just breathtaking,” he says.
“We get up every morning figuring what do we have to make sure we do well before we get disintermediated by some new technology that’s emerging, and how do we make sure we are at the forefront of those technologies.”
This is part of what makes him tick, but so too is the opportunity to make an impact. Last year alone, dLocal afforded more than 250 million people the chance to purchase something or close some sort of financial transaction.
“That’s massive impact and a massive footprint across all of this. And that is the mission,” he concludes.
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