Comparing payment space: $DLO, $FOUR, $FISV, and $GPN

The payments space has lost a lot of value and generated a lot of noise, which makes it a good moment to slow down and actually compare the businesses. $DLO, $FOUR, $FISV, and $GPN are all different despite operating in a similar space. I chose not to include $XYZ because, in my view, management quality is unacceptable and I don’t care about the potential, if I don’t like or trust the management it’s an automatic pass. There are other players such as $TOST $SHOP $PYPL etc….

What $DLO really is:

$DLO is not a payments company in the merchant sense. It does not win by selling, installing, or servicing merchants one by one. It wins by sitting in the middle of cross border payment flows into difficult markets.

Its value comes from:

-regulatory relationships

-local banking integrations

-compliance complexity

Once those rails and system are built, incremental volume is extremely cheap to handle. That is why returns on capital are high and why cash generation scales without needing constant reinvestment.

$DLO grows when global commerce grows. It does not need to convince a merchant to switch terminals. It just needs volume to flow through its rails.

What $FOUR really is:

$FOUR is a very well run execution business. But it is merchant facing and earns lower returns on capital.

That means:

- sales efforts and integrations never stop

- operations, customer churn, etc must be actively managed

- hardware, software, and service require constant effort

It has operating leverage, but it is also operationally more heavy. Growth requires execution but cash flow still improves when execution is good.

What are $FISV and $GPN:

$FISV and $GPN are closer to $FOUR than $DLO.

They are also merchant facing, scale driven payment processors that win through distribution, integration, acquisition, and execution rather than structural complexity. They benefit from size, relationships, and embedded workflows, but growth still requires continual effort, sales, and capital allocation decisions such as acquisitions.

They are durable businesses with strong cash generation, but like $FOUR, their economics depend on activity and execution, instead of passive volume flowing through hard to replicate rails.

The structural difference:

$DLO compounds by position.

$FOUR, $FISV, and $GPN compound by Managment.

$DLO moat is complexity that others do not want to deal with.

$FOUR, $FISV, and $GPN moats are execution quality, scale, and distribution albeit in competitive markets.

Is $DLO the better business?

Structurally, yes.

Valuation wise, not necessarily.

$DLO earns higher returns on capital, needs less reinvestment to grow, carries less operational friction, has a pristine balance sheet. That usually deserves a higher multiple, and it gets one.

$FOUR, $FISV, and $GPN are cheaper because the market knows execution risk never goes away. The reward is cash flow growth, but the risk is constant effort.

The honest conclusion:

$DLO is the cleaner business.

$FOUR, $FISV, and $GPN are the more tangible ones.

$DLO is easier to compound if things go right.

$FOUR, $FISV, and $GPN can surprise if execution stays good.

None are risk free. $DLO has regulatory and concentration risk. $FOUR, $FISV, and $GPN carry competitive, integration, and capital allocation risk.

So yes, I do think $DLO is the better business. But an investment in $FOUR, $FISV, or $GPN can work well because the price to value is attractive and as long as management executes.

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