By Brazil Stock Guide — Stone and PagBank are entering the third quarter with weaker operating momentum as sluggish economic activity and the continued expansion of Pix put pressure on payment volumes and margins, according to a BTG Pactual report written by analysts Eduardo Rosman, Ricardo Buchpiguel and Antonio Pascale.
The bank expects both Brazilian payments companies to report third-quarter results below market expectations, raising the risk that their 2026 guidance may need to be revised. TPV growth should remain in the low-to-mid single digits for both players, while revenue is expected to grow more slowly than volumes as the payments mix becomes less favorable.
Pix is one of the main sources of pressure. Brazil’s instant-payment system continues to take share from credit cards, diluting take rates, while competition is intensifying as organic growth becomes harder to find. BTG said some players are resorting to targeted promotions in selected products and customer segments to gain market share.
The warning comes as BTG itself expands into the acquiring market. The bank began operating BTG Pay on September 11, offering companies its own payment terminal alongside payment, credit and financial-management tools. The platform gives BTG a direct presence in a market where Stone and PagBank are already established players.
Stone faces churn and credit pressure
For Stone, BTG expects gross profit, EBT and net income to decline both sequentially and year over year in the third quarter. Earnings could come in more than 10% below both the bank’s own estimate and market consensus.
Stone is also dealing with customer churn and credit-quality pressure. The company has identified above-market pricing and product complexity as factors behind customer losses and is cutting prices and simplifying its offering.
Churn among micro-merchants is already approaching normalized levels, according to BTG, but the SME segment has yet to show the same improvement. Some of Stone’s new offers are taking a longer-term view of customer lifetime value, putting additional pressure on pricing in the short term.
Credit remains another concern. While Stone’s automated working-capital portfolio is performing well, its dedicated credit desk still holds larger loans originated in 2025, with more company-specific problem cases emerging during the third quarter.
BTG expects cost of risk to remain close to second-quarter levels rather than falling as previously hoped, with a clearer improvement taking longer as those older loans run off.
PagBank growth loses steam
PagBank is also tracking below expectations. BTG expects TPV growth to fall below the 3% year-over-year pace recorded in the second quarter, mainly because of weaker economic activity, while revenue is likely to decline sequentially.
A heavier Pix mix and a shift toward larger merchants are squeezing PagBank’s take rate. Gross profit is expected to fall quarter over quarter, potentially putting the company’s gross-profit guidance at risk of a downward revision.
Credit growth should remain within PagBank’s 25% to 35% guidance, but a rising share of unsecured lending is expected to push both cost of risk and non-performing loans higher.
BTG sees a sequential decline in net income as the more likely outcome, with earnings potentially coming in 5% to 10% below consensus.
BTG turns more cautious
The broader issue is that growth in Brazil’s acquiring industry is proving softer than expected. Stone and PagBank have responded by putting greater emphasis on banking and credit as gaining share in their core payments businesses becomes increasingly difficult.
BTG remains skeptical about that transition. Although both companies’ core payments operations continue to generate attractive returns, their investment cases are becoming increasingly dependent on lower interest rates to bring down funding costs.
The bank kept its Buy rating on Stone and Neutral rating on PagBank, but acknowledged an unusually blunt point in the report: in hindsight, it said it should also have downgraded Stone when it cut PagBank to Neutral earlier this year.
BTG said Stone’s operating trends have become weaker and less predictable, even though its valuation remains low.
Stone trades at 4.6 times estimated 2026 earnings, while PagBank trades at 5.8 times.
Low multiples, however, are increasingly competing with a tougher operating backdrop: weak economic activity, Pix eating into card economics, rising credit risks and intensifying competition — now including a deeper push into acquiring by BTG itself.
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