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    Nigeria Emerges as Top Revenue Contributor for dLocal in Africa, Despite Currency Challenges

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    Four years following its entry into the Nigerian market, dLocal, the Uruguayan unicorn specializing in cross-border payments, has witnessed exponential growth in its revenue from the African continent, with Nigeria notably emerging as a key revenue generator. Despite challenges posed by currency depreciation and regulatory directives, dLocal’s strategic positioning and robust payment infrastructure have enabled it to solidify its foothold in Nigeria, Africa’s largest market.

    According to recent financial reports released by dLocal, revenue from Africa and Asia surged by 121% year-over-year and 103% quarter-over-quarter, reaching a total of US$56.5 million. Nigeria, in particular, played a pivotal role in driving this growth, with revenues doubling year-over-year and tripling quarter-over-quarter. This surge was attributed to the widening spread between the official and parallel exchange rates, albeit accompanied by increased expatriation costs.

    Excluding Nigeria, dLocal witnessed a notable increase of 144% year-over-year and 44% quarter-over-quarter in revenues across Africa and Asia, showcasing the company’s sustained growth trajectory in these regions.

    In 2023, dLocal generated $157.7 million in revenue from Africa alone, constituting 24% of its global revenue. Notably, Nigeria accounted for 13% of the company’s global revenue put at $650.4 million, underscoring its significance as a key market for dLocal’s operations.

    The company’s subsidiary in Nigeria, Demerge Nigeria Limited, has been instrumental in facilitating its operations within the country. Incorporated in 2020 and licensed by the Central Bank of Nigeria as a Payment Solution Service Provider (PSSP), Demerge Nigeria Limited has played a vital role in navigating the regulatory landscape and ensuring compliance with local laws.

    However, in December 2023, the Central Bank of Nigeria (CBN) issued a directive that significantly impacted fintech companies operating within the banking industry. The directive, conveyed through a circular dated December 5, 2023, delisted several fintech companies, including Demerge Nigeria Limited, from the collection of deposits. This directive mandated commercial banks to discontinue their use of services provided by these fintech firms.

    The CBN justified this move by asserting that allowing non-bank entities to collect funds from customers contravened existing regulations, emphasizing that only licensed commercial banks and authorized entities could offer such services. While the status of this directive remains unclear, it has raised questions regarding the regulatory environment for fintech companies in Nigeria.

    Despite these regulatory challenges, dLocal continues to expand its presence in Nigeria, leveraging its robust payment platform to support over 50 million locally issued Verve cards and tokens. Additionally, the company’s acceptance of Verve cards in 21 African countries underscores its commitment to facilitating seamless transactions across the continent.

    dLocal’s success in Nigeria is emblematic of its broader mission to bridge the payments innovation gap between developed countries and emerging economies. Through its 360° single-API platform, dLocal enables global merchants to reach billions of customers, accept payments, send payouts, and settle funds globally, without the need for multiple processors or local entities.

    With partnerships with over 450 global e-commerce retailers, SaaS companies, online travel providers, and marketplaces, dLocal has established itself as a trusted payment partner for industry leaders such as Amazon, Booking.com, Uber, and Zara.

    Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard.

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