By Brazil Stock Guide — Brazil’s payment companies are heading into a second quarter marked by an apparent contradiction: transaction volumes are beginning to recover, but that improvement is unlikely to translate into comparable growth in revenue and earnings. The reason lies in the changing mix of payments, with Pix accounting for a larger share of transactions and putting pressure on acquiring profitability.
That is the main conclusion of a BTG Pactual preview of second-quarter results for Stone (NASDAQ: STNE) and PagBank (NYSE: PAGS). The bank expects both companies to report earnings about 5% below its own estimates and market consensus, mainly because of continued pressure on take rates — the revenue earned on each transaction processed.
According to BTG, World Cup-related spending should support total payment volumes during the quarter. The problem is that much of the additional activity is coming from lower-yielding transactions. At Stone, the continued expansion of Pix is reducing the relative importance of card payments. At PagBank, stronger activity among restaurants and other lower-monetization merchant segments is also expected to weigh on margins.
For Stone, BTG forecasts net income of approximately R$580 million, up 6% from the previous quarter but down 3% from a year earlier. Although total payment volume is expected to accelerate from the first quarter, card transactions should remain below year-earlier levels, while Pix continues to gain share across the company’s payment mix, reducing overall monetization.
Credit remains Stone’s main medium-term growth opportunity. BTG expects the loan portfolio to reach about R$3.6 billion, supported by working-capital lending and BNDES-backed credit lines. Even so, the bank believes asset quality will remain under pressure in the quarter, with an increase in loans more than 90 days overdue and higher provisions for potential losses.
At PagBank, BTG expects net income of around R$550 million, up 1% from the previous quarter and 3% from a year earlier. Payment volume should return to low-single-digit growth, helped by World Cup spending and sports-betting activity, but revenue growth is expected to remain limited to about 1.5%, failing to keep pace with the increase in transactions.
PagBank’s credit portfolio should continue to grow above the company’s 25% to 35% guidance range, although at a slower pace than in the first quarter. At the same time, the cost of risk is expected to rise above 5%, reflecting both a shift in the portfolio mix and upfront provisioning on new loans. Products such as private-sector payroll loans and Pix Finance are expected to gain relevance during the second half of the year and become more meaningful growth drivers in 2027.
For BTG, the challenge facing both companies is structural. The expansion of Pix has changed the economics of Brazil’s payments market: companies are processing a growing number of transactions, but an increasing share of those payments generates less revenue. This weakens the link between volume growth and earnings growth and makes credit and other financial services increasingly important sources of profitability.
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