dLocal, a payment platform originating from Uruguay that specializes in cross-border transactions, has formed a strategic alliance with iTransfer, a company focused on money remittance services. This partnership aims to tackle the complexities and challenges, such as currency volatility, that are often encountered with cross-border payments in emerging economies.
The joint effort is designed to offer competitive exchange rates, provide real-time currency updates, and enhance the flexibility available to users. The primary objective of this collaboration is to reduce the risks associated with currency fluctuations and to streamline the efficiency of money transfers.
The initial phase of this partnership will facilitate payouts for bank transfers and wallet payments in three key markets: Nigeria, the Philippines, and Pakistan. dLocal has also disclosed its intention to expand these services to include additional countries such as Bangladesh, Morocco, Egypt, and India in the near future.
dLocal’s platform serves as a bridge connecting enterprise-level merchants with consumers in various markets across Africa, Asia, and Latin America. This enables businesses to process payments, manage payouts, and settle funds globally.
With a significant operational footprint that spans Asia, Latin America, and more than ten countries in Africa and the Middle East—including Kenya, South Africa, Nigeria, and Turkey—dLocal has established itself as a prominent player in the fintech sector. As of 2023, dLocal reported handling $17.7 billion in payment transactions.
In the first quarter of 2024, dLocal achieved a total payment volume of $5.3 billion, marking a 49% increase compared to the previous year and a 4% rise from the preceding quarter. The company’s revenue reached $184 million, reflecting a 34% year-over-year growth, although it experienced a slight 2% decline from the previous quarter.
dLocal has acknowledged that one of the significant hurdles in emerging markets is the instability of local currencies, which can have a direct impact on the value of remittances. The company has observed instances where fluctuations in currency exchange rates can alter the value of transfers in real-time, posing a challenge that this partnership with iTransfer aims to mitigate.
Marcela Gonzalez, CEO of iTransfer, which boasts a significant presence in the EMEA, Latin America, and APAC regions, emphasized the importance of providing competitive rates to users as a key factor in meeting the financial needs of emerging markets. This approach is in line with iTransfer’s strategy for growth and expansion.
Gonzalez expressed enthusiasm about the partnership with dLocal, stating, “By integrating dLocal’s robust payment infrastructure, we can significantly enhance the remittance experience for our users.” This integration is expected to offer an improved service for those engaging in cross-border transactions.
On the other side of the partnership, Agustin Botta, Head of EMEA at dLocal, highlighted the collaboration as a reflection of their dedication to innovation and providing equitable access to financial services. Working alongside iTransfer, dLocal aims to address the unique challenges of cross-border payments in markets characterized by currency volatility.
The collaboration with iTransfer is part of dLocal’s recent string of partnerships aimed at bolstering its cross-border payment services. For instance, in Kenya, dLocal has joined forces with KCB Bank to facilitate real-time disbursements for its global customers into all Kenyan bank accounts.
The expansion of dLocal is indicative of a broader trend among Latin American fintech companies venturing into the African market. In a notable move, Minka, a Colombian fintech, commenced operations in East Africa in July 2024, marking its presence in countries such as Kenya, Tanzania, Uganda, and Ethiopia. Minka has also laid out plans to extend its reach into Southern Africa, targeting countries like Mozambique, Zambia, and Malawi.
