dLocal has reportedly been licensed by Brazil’s central bank to serve as a payments institution in the South American country.
This license, roughly equivalent to the European e-money issuer license, “allows dLocal to accept deposits from the public, manage e-wallets, and participate directly in Brazil’s payments systems including Pix.”
Additionally, dLocal becomes a “Payments Transactions Initiator”, enabling it “to access Brazil’s new Open Banking Initiative as well as initiating third-party Pix payments.”
At the same time, dLocal has also “become an authorized eFX provider, allowing it to perform a wide range of cross-border currency operations, without amount restrictions.”
Becoming a Payments Institution carries with it “a higher level of scrutiny by Brazil’s Central Bank.”
As noted in the updatre:
“We welcome this license, which is the product of an effort of many years. Being a Payments Institution will allow us a greater level of flexibility when serving our customers. We consider compliance and regulations a key competitive advantage, and we welcome the increased level of scrutiny that it brings, which will give our customers an even higher level of confidence in our internal processes, our compliance systems and the safeguarding of the funds.”
As covered, dLocal, a tech-first payments platform that enables enterprise merchants to connect with consumers in emerging markets, had introduced its developments for risk management.
The first product in the stack is Smart Defense, which is described as an advanced, custom-built solution that combats fraud by leveraging enhanced data and machine learning models.
The program is designed to improve its prediction capability by “inspecting a high volume of transactions, not only by blocking suspicious payments but also by approving more genuine purchases.”
Nicolas Aliberti, VP of Fraud Prevention at dLocal, stated:
“The more attacks it stops, the smarter it gets. SmartDefense quickly goes through a massive number of data points such as shopper information, shipping address, item purchased, industry, and device ID, among others, to assess risk and define scoring rules for future transactions.”
Merchants are able to subscribe to Smart Defense as a standalone feature “even when processing their payments through a different PSP,” the announcement noted.
Aliberti also mentioned:
“No other payment facilitator has such a large database of online transactions in emerging countries, where fraud is a critical challenge. Even with another provider, it is a wise option to let dLocal handle your risk management in those markets.”
dLocal also presents Defense Manager, a user interface that provides merchants the flexibility to change “a predefined set of rules.”
Aliberti further noted:
“Choose the tolerance according to your risk appetite. Decide, for example, which transactions should apply 3D Secure and when to be less conservative in a user-friendly dashboard. This tool puts your fraud team in charge of decision-making and is ideal for companies that already have industry-specific fraud intel and dedicated teams.”