[Interview] Empowering Businesses Navigate the Intricacies of Local Payment Ecosystems

By Peter Nalika

Are you curious about the possibility of paying for your Spotify subscription using your MPESA wallet? Companies like dLocal make it possible for local users and businesses to connect and transact with international merchants through their platform. dLocal’s primary objective is to bridge the divide between global businesses and consumers in emerging markets. They facilitate secure and convenient cross-border payments while ensuring compliance with local regulations and preferences.

We recently interviewed Moses Sule, whose commercial role involves enabling global merchants in Latin America and Asia to accept payments from merchants in Africa. Moses plays a crucial role in facilitating these transactions and fostering business relationships between different regions.

Moses Sule, Head of Expansion, dLocal

Can you explain the role of dLocal in the fintech industry?

dLocal is a fintech firm specializing in cross-border payment solutions for enterprises. With a strong emphasis on emerging markets like Latin America, Africa, and Asia, our company facilitates seamless payment transactions. Our payment platform empowers global businesses by enabling them to accept a wide array of local payment methods such as credit cards, bank transfers, e-wallets, and cash payments.

In particular, we strive to create opportunities for new merchants looking to expand their operations across Africa and Latin America. Our advanced infrastructure and cutting-edge technology empower businesses to navigate the intricacies of local payment ecosystems in different countries.

By offering a single integration point for merchants, we consolidate diverse payment methods and currencies into a unified platform. This simplifies the payment acceptance process for customers across multiple countries, streamlining operations and enhancing the overall customer experience.

What informed the need for you to invest into such a platform?

Our investment is motivated by two common scenarios prevalent in emerging markets. Firstly, debit and credit cards are not always the primary payment methods in these markets. Consequently, merchants have embraced alternative payment methods like Mpesa in Kenya, myFawry in Egypt, and mRuppe in India.

Secondly, the majority of merchants in emerging markets do not conduct transactions in USD. This presented an opportunity for us to localize the payment infrastructure, allowing users to transact in their local currencies with global brands without the need for an international card.

dLocal goes beyond payment processing and also provides additional services such as currency conversion, fraud prevention, and local compliance support. These services assist businesses in optimizing their payment operations and mitigating risks associated with cross-border transactions.

Kindly provide an overview of the regulatory landscape in Africa and its impact on the ecommerce industry.

In Africa, each central bank operates with its own unique guidelines, creating a regulatory framework for businesses, including those in the ecommerce industry. These guidelines play a crucial role in ensuring legitimacy and establishing trust among market players.

At dLocal, we recognize the significance of adhering to these regulations and prioritize obtaining the necessary licenses to operate in each market we serve. By working closely with the central banks of the respective countries, we secure the required licenses that validate our legitimacy as an ecommerce service provider.

Having obtained the necessary licenses, we can confidently offer our comprehensive services to both merchants and consumers in Africa. Our merchants can accept payments with the assurance that dLocal operates within the regulatory framework, providing a trusted platform for secure transactions. Meanwhile, consumers can make payments knowing that they are engaging with a licensed and compliant company.

By navigating the regulatory landscape and obtaining the appropriate licenses, dLocal ensures a seamless and compliant experience for all stakeholders involved in ecommerce transactions in Africa.

What measures do you employ to address the security and integrity concerns regarding data protection, ensuring that consumer data remains safeguarded against various cyber-attacks?

When it comes to handling card transactions, dLocal prioritizes consumer protection through various security measures and transaction authorization protocols.

One fundamental aspect is adhering to the Payment Card Industry Data Security Standard [PCI DSS]. Obtaining certification from the certifying body ensures that our platform follows the required protocols at its core. By complying with PCI DSS, we uphold robust security practices to safeguard cardholder data.

Moreover, every transaction is subjected to the appropriate level of authorization. For instance, when making a payment with a card, a Two-Factor Authentication [TFA] process is employed. This involves requiring additional verification, such as a PIN or One-Time Password [OTP], to ensure that the person initiating the payment is the authorized individual.

At dLocal, we implement multiple protective layers to ensure consumer safety. These include TFA, PCI DSS compliance, vulnerability and penetration tests, and security assessments, among others. These measures help validate the authenticity and integrity of each transaction.

By leveraging Two-Factor Authentication, we add an extra level of security to combat unauthorized access and potential fraud. PCI DSS compliance guarantees that we adhere to industry standards for secure payment processing. Additionally, conducting vulnerability and penetration tests, as well as regular security assessments, ensures ongoing monitoring and identification of any potential weaknesses in our systems.

dLocal remains dedicated to maintaining the highest standards of consumer protection. Through a combination of robust security protocols, transaction authorization procedures, and comprehensive security assessments, we strive to provide a secure and trustworthy payment environment for our customers.

Are there any recent regulatory developments in the payments sector of emerging markets in Africa that could potentially impact the operations of dLocal?

We strategically establish a strong market presence with dedicated local teams that understand local dynamics and regulations. We collaborate closely with central banks, staying updated on policies and guidelines. We prioritize strict adherence to regulatory requirements, ensuring compliance and a seamless experience for our merchants and customers.

Operating on the ground provides valuable market insights and enables proactive responses to regulatory changes. Our commitment to compliance fosters trust with regulatory authorities, merchants, and customers, creating a stable and secure environment for cross-border transactions.

How do you address the issue of consumer protection especially in payment transactions?

Consumer protection is a top priority for us. In the event of a payment dispute initiated by a consumer, we have a clear system in place to address their concerns.

When a consumer raises a dispute, the process involves communication between multiple parties. Firstly, the consumer contacts their issuer, typically their bank, where their account is held. The issuer then raises the dispute with the acquirer, which is the entity that processes the payment on behalf of the merchant.

This dispute resolution process ensures that the consumer’s concerns are escalated and addressed effectively. By involving the issuer and acquirer, we facilitate the necessary steps to investigate the dispute, process any refunds, and handle other related complaints.

At dLocal, we are committed to facilitating a seamless resolution process, working closely with issuers and acquirers to reach a satisfactory outcome for all parties involved. Our aim is to protect consumer rights, address concerns promptly, and provide a reliable and secure payment experience.

The author is a Technologist and Communication Consultant.

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