#22. Behind the scenes of payment infrastructure

An Uruguayan fintech enabler, the pivots of Paytm, and a source for savvy youngsters to read about Indian business.

Welcome! Do you ever wonder:

  • What makes Amazon accept your SMS payment from Uruguay? 🇺🇾📲

  • Paytm is 20 years old… were they always this successful? 🇮🇳🔄

  • What do Indian savvy youngsters read to stay in the know? 🇮🇳🤓

If so, keep reading…


If you wonder what Emerging Markets explorer 🧭 is, start here.


In Dlocal, they want to make Emerging Markets’ consumers’ life easier without taking credit.

Sebastian Kanovich used to lend his international credit card to his friends often. Not that his friends couldn’t afford their purchases: they could, but when they ordered online, only some international credit cards were allowed, and Sebastian was the lucky one to have one.

Sebastian saw this problem as an opportunity, an opportunity that became the origin of DLocal in 2016.

DLocal is a payment enabler for Emerging Markets: they have an infrastructure that allows merchants to accept payments from customers in Emerging Markets, no matter the means of payment the consumer chooses.

They solve two problems at once:

  1. They facilitate the access of global merchants to Emerging Markets. Using DLocal, they avoid the complexities of accepting payments: regulations, local methods, etc… they just need to use DLocal’s API.

  2. They allow consumers in Emerging Markets to buy from these merchants using their preferred payment method.

DLocal supports 600 different payment methods, from SMS, mobile wallets, cash payouts to the usual credit cards. They don’t support crypto-currency payments yet, since they are awaiting clear regulations to ensure the safety of the transactions.

DLocal’s growth follows the tailwinds of the growth of their clients in Emerging Markets. They serve clients like Amazon, Spotify, Didi, or Kuaishou in 29 countries. They strongly believe in the potential of these markets.

DLocal is the 3rd largest startup unicorn in Latin America, behind Rappi and Nubank. It did an IPO in 2021 in Nasdaq, being the first Uruguayan company to IPO.

Failure story: Paytm early pivots

Paytm is India’s second most valuable startup, valued at $16BN. It only got recently surpassed by the Edtech Byju.

Paytm is a mobile wallet enabling P2P transfers, paying for food delivery and utility bills, and small loans. Relevant investors include Berkshire Hathaway, Alibaba, Softbank… They aim to go public in November 2021.

Paytm was founded by Vijay Shekhar Sharma, who as early as 2011 claimed that Mobile will eat the Internet. But Vijay wasn’t set to succeed in every endeavor.

Paytm started off as One97 Communications in 2000. One97 provided content for mobile operators. Their main clients were telecom companies, and mobile content grew into a business of $1BN in 2006. One97, however, faced strong competition, which made them decrease their market share and lose their biggest client, which eventually pushed them out of that business.

Then, One97 pivoted towards marketing for telcos: they would sell data for cross-selling leads to telcos, and when those converted, get a commission. E.g.: a person taking long-distance calls to the US but not making them, would represent a lead to offer them a cheaper international call plan.

The model was successful, so successful that eventually, telecom providers came to the markets and One97 stopped enjoying its previous first-mover advantage to become squeezed out of the market.

In 2010 Sharma pivoted again and launched Paytm, (Pay through Mobile), allowing users to pay for their phone usage online instead of in cash in a store, setting it up as a digital wallet. It started off small, but its constant growth and evolution allowed Paytm to achieve the position they have today in the market, with 20M merchants signed up and 150M monthly active users.

Source recommendation: Filter coffee ☕

Filter Coffee is a daily newsletter focused on tech and business in India, and relevant stories worldwide.

You can read about trends, startup signals, and tech news. The content ranges from market summaries and financial analyses always including a bigger picture to stay grounded. Its subject lines can easily be “Revenge shopping” and include stories of Nike.

Filter Coffee ☕ is written by Tanvi Raut Dessai, who is on a mission to change everyday media for Indian youngsters. Her tone is always informal and fun, but the information is relevant, being the recipe for what a youngster needs: to be informed yet not bored by traditional media styles. It’s an approachable way to stay in the know.

You can read it here: https://www.filtercoffee.co/

✨ Easter Egg ✨