VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Sunday, December 28, 2025
DLocal Limited
DLO · Nasdaq Global Select Market
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
dLocal operates a single reported segment ("payment processing") providing a one-API platform that enables enterprise merchants to accept local payments (pay-ins) and make payouts (pay-outs) in emerging markets. The core moat is execution and compliance: maintaining broad local payment-method and financial-institution integrations across many countries, plus regulated operating entities and compliance processes. Switching costs are moderate because merchants embed a PSP into checkout, onboarding/KYC, reconciliation, and fraud/risk workflows. Competition from large global PSPs and local acquirers keeps the market structurally competitive and limits pricing power to moderate.
Primary segment
Payment processing platform (Pay-ins & Pay-outs)
Market structure
Competitive
Market share
—
HHI: —
Coverage
1 segments · 5 tags
Updated 2025-12-27
Segments
Payment processing platform (Pay-ins & Pay-outs)
Cross-border payment processing for global merchants in emerging markets
Revenue
—
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Payment processing platform (Pay-ins & Pay-outs)
Cross-border payment processing for global merchants in emerging markets
Reported as a single operating segment ("payment processing") in its 2024 Form 20-F; primary products include pay-ins, pay-outs, and platform tooling delivered via one API.
Capex Knowhow Scale
Supply
Capex Knowhow Scale
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 3 evidence
One-API platform connects merchants to 145+ local pay-in methods and 824 local pay-out methods across 40+ countries; building and maintaining coverage across payment methods, markets, and institutions is a scale/know-how advantage.
Erosion risks
- Large PSPs expand emerging-market coverage
- Standardized payment orchestration reduces integration differentiation
- Regulatory or scheme rule changes force expensive rework
Leading indicators
- Number of supported pay-in payment methods
- Number of supported pay-out payment methods
- Countries live (coverage footprint)
Counterarguments
- Well-capitalized competitors can replicate coverage over time
- Large merchants can multi-home across PSPs, reducing exclusivity
Compliance Advantage
Legal
Compliance Advantage
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 3 evidence
Operating regulated payment services across jurisdictions requires registrations/authorizations and sustained compliance operations (AML/KYC, payment services rules).
Erosion risks
- Competitors obtain similar licenses/registrations
- Regulatory changes increase compliance costs or restrict products
- Regulatory findings or license issues damage ability to operate
Leading indicators
- New licenses/authorizations obtained (or lost)
- Regulatory investigations, fines, or remediation disclosures
- Compliance headcount and audit findings trend
Counterarguments
- Well-funded competitors can pursue the same regulatory permissions
- Partnership models can bypass some licensing hurdles for entrants
Switching Costs General
Demand
Switching Costs General
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 3 evidence
Merchants integrate via one API/contract; switching implies re-integration, re-onboarding, and potential disruption to acceptance, reconciliation, fraud, and payout workflows.
Erosion risks
- Payment orchestration layers reduce PSP switching costs
- Merchants multi-home intentionally across PSPs
- Standardized APIs lower integration friction
Leading indicators
- Customer concentration and churn disclosures
- Net revenue retention (if disclosed)
- Expansion of existing merchants to new countries/methods
Counterarguments
- Large merchants often run multi-PSP setups, reducing lock-in
- Some switching can be incremental by routing share rather than full cutover
Operational Excellence
Supply
Operational Excellence
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Differentiation can come from higher acceptance/conversion and fraud prevention performance in complex emerging-market payment environments.
Erosion risks
- Competitors invest heavily in fraud/risk tooling
- Service outages or security incidents damage trust
- Fraud patterns evolve quickly, requiring continuous reinvestment
Leading indicators
- Platform uptime / incident frequency
- Fraud loss rates and chargeback trends
- Merchant acceptance/conversion metrics (if disclosed)
Counterarguments
- Acceptance/conversion often depends on issuer and local rail behavior, limiting platform control
- Performance advantages can be competed away via engineering spend
Evidence
"...connecting them to consumers through more than 145 different local pay-in payment methods and 824 local pay-out payment methods... as of December 31, 2024."
Supports breadth of integrations that require ongoing engineering/compliance/ops investment.
"...technology architecture is designed to be highly scalable and flexible..."
Supports a scalable platform architecture claim (enabler of multi-country/multi-method coverage).
"Include fees from financial institutions (e.g., banks, local acquirers or payment methods)..."
Supports reliance on, and the importance of maintaining, relationships with local banks/acquirers/APMs.
"DLocal Limited... is authorised by the Malta Financial Services Authority... for the issuance of electronic money and the provision of payment services."
Indicates regulated authorization for e-money issuance and payment services.
"...registered as a Money Service Business (MSB) with Financial Crime Enforcement Network..."
Shows US MSB registration (compliance/registration footprint).
Showing 5 of 10 sources.
Risks & Indicators
Erosion risks
- Large PSPs expand emerging-market coverage
- Standardized payment orchestration reduces integration differentiation
- Regulatory or scheme rule changes force expensive rework
- Competitors obtain similar licenses/registrations
- Regulatory changes increase compliance costs or restrict products
- Regulatory findings or license issues damage ability to operate
Leading indicators
- Number of supported pay-in payment methods
- Number of supported pay-out payment methods
- Countries live (coverage footprint)
- Gross profit and processing cost trends
- Implementation time for new markets/methods
- New licenses/authorizations obtained (or lost)
Curation & Accuracy
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