Nuvei agrees Pay2All acquisition in Brazil, further LatAm expansion to come
On 18 April, the Prizes and Betting Secretariat (SPA) of the ministry of finance published Normative Ordinance No 615 in Brazil’s Official Gazette of the Union. The ordinance stipulates payment institutions must have authorisation from the Central Bank of Brazil to operate in the market.
Pay2All’s authorisation from the Central Bank means Nuvei will be able to offer its services in the Brazilian market. This includes accepting payments and managing betting accounts.
The proposed acquisition is still subject to customary closing conditions. These include receipt of further regulatory approvals from the Central Bank of Brazil.
Once completed Nuvei is well-placed to be one of the payment partners available to operators ahead of the expected legal market launch date of 1 January 2025.
Nuvei Brazil deal accelerates regional expansion
The Pay2All agreement marks the latest step in Nuvei’s LatAm journey.
In February, Nuvei became the first global payments company in Colombia to offer direct local acquiring. It’s also in the process of launching a local acquiring service in Mexico.
Nuvei’s LatAm expansion is far from over, though, according to company chair and CEO Philip Fayer.
“The proposed transaction not only strengthens our presence in LatAm but also demonstrates our commitment to providing fully localised and modern payment solutions to businesses in Brazil,” he said.
“We’re excited to offer our full suite of services to help drive growth for the rapidly-growing ecommerce and igaming operators in this dynamic market.”
Is Nuvei’s Pay2All agreement part of Brazil M&A boom?
While Brazil is a hugely exciting market, it certainly won’t be a cheap one.
Licence fees stand at BRL30m (£4.6m/€5.4m/$5.9m), while a raft of technological and security requirements and subsequent upkeep and accreditation have left some concerned as to whether there will be a place for smaller companies in the Brazilian market.
Such observations led economist Adam Patterson to predict an M&A boom in Brazil’s betting market, sparked by hefty regulatory costs.
Patterson, an economist and partner at Redirection International, specialises in M&A and has colleagues working in Brazil. He expects M&A such as Nuvei’s agreement with Pay2All to start occurring more frequently.
“We see great potential for a boom in M&A in the sports betting sector, a universe where Brazilian passions for sports and technology are combined,” Patterson declared.
“The trend towards M&A activities is driven in part by the substantial regulatory costs associated with the licensing process, including authorisation fees that can be as high as BRL30m, technical certifications and tax obligations. Collectively, these factors pose a significant challenge to the economic sustainability of small betting operators.”
Brazil on the home straight to a legal market
It’s been a long and winding journey, but Brazil is close to launching legal gambling.
Last week, the SPA published the final ordinances of the four-stage rollout set out in April, with the anticipated launch date of 1 January 2025 looking achievable.
Operators wishing to go live on that date have until 20 August to submit applications to Sigap, Brazil’s betting management system. The 20 August date will mark the end of the 90-day initial window of preference. Applications made during that timespan will be prioritised and guaranteed to be processed by the market’s predicted launch date.
At the time of writing, just seven operators have applied. KTO became the latest to do so on Monday (5 August).
However, local operators expect this to accelerate in the coming weeks.
With Normative Ordinance No 1,207 published last Wednesday (31 July) with favourable terms for operators covering casino games such as Fortune Tiger, a flurry of applications is likely. Local experts suggest at least 20 and as many as 60 operators will be licensed in time for market launch.