Edenred and Pluxee

The government deregulated the whole sector to break up the old monopoly led by Edenred and Pluxee along with Alelo and VR Beneficios. Because of this, investment bank BTG Pactual and the JP Morgan-backed fintech C6 are jumping in.

With the new rules, the market is moving to open-loop networks (system runs on universal payment rails like Visa or Mastercard, allowing the cards to be accepted almost anywhere) meaning lower fees and faster payments. BTG is using this chance to push deeper into corporate HR services for businesses of all sizes. The traditional players aren't giving up easily, though. They've taken the issue to court, and the Brazilian Supreme Court is currently deciding the final outcome. Still, the new entrants seem confident that these changes are here to stay.

Expert Opinion:
Both stocks bounced over the last 5 months. Yet we would stay away from both. What happens in Brazil is bad news, and we expect other countries could take the same stance, enabling banks to enter this market to capitalize on their existing commercial relationships and structure. Probably more importantly, at a time when governments are financially squeezed, arbitrage on tax savings schemes like vouchers could be considered. While valuation is low (especially for Pluxee), we would not commit capital into that sector. 


For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu