Dock, which builds and provides payments services and digital banking to companies across Latin America, is rolling out a tool to allow firms to extend lending and control repayment terms.
(Bloomberg) — Dock, which builds and provides payments services and digital banking to companies across Latin America, is rolling out a tool to allow firms to extend lending and control repayment terms.
The service, which will launch in Brazil and be available globally, will allow Dock’s clients to extend credit through payment plans without using a credit card company as an intermediary, founder and Chief Executive Officer Antonio Soares said in an interview.
“The companies know their clients best and we’ve created simple financial services that allows them to provide the service,” he said. “The decision-making process for consumers who want to make purchases using credit has to change, it has to be more transparent.”
At a time when the key interest rate of Brazil sits at nearly 14%, the ability to unlock more credit to consumers who have steady income streams is even more urgent. Dock clients like Frete.com, which connects truck drivers with transport companies, would be able to track contracts and payments to certain drivers and extend loans as a guarantee, for example.
Household debt has skyrocketed amid the high-rate environment and so-called “interest-free payment quotas” are misleading, Soares said. At the same time, 39 million of 90 million Brazilians in the work force are self-employed and can benefit from more innovative lending facilities, he said.
The new tool allows for flexible payment installments and promotes financial education for consumers.
Dock makes money by charging companies for access to their financial services platform and through the use of licenses that allow companies to provide financial services without being a bank. The central bank-regulated company also charges fees on some transactions.
The company, which employs about 1,400 people, counts around 300 clients in Brazil, has expanded to Mexico, Colombia, Chile and is gaining its first clients in Panama.
After raising roughly $134 million last year, Dock is close to break even and doesn’t see the need for more venture capital funding rounds. It announced a $1.5 billion valuation as of May 2022.
The company may analyze acquisitions which could require financing in the future, he said. Riverwood Capital, Viking Global Investors and Sunley House Capital have been long-time backers.
(Updates with details on tool in sixth paragraph.)
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