Ricardo Dutra: Hi Sheriq, when you asked about market share, I assume you are talking about the TPV market share in the acquiring.
Sheriq Sumar: That’s right, yes.
Ricardo Dutra: Okay. Thank you. When you look at a yearly basis, when you compare 2022 with 2021, we gained 120 bps, 1.2% in market share. If you look at Q4 2022 versus Q4 2021, we are gaining 60 bps. In a quarter-over-quarter, comparison, which is Q4 2022 versus Q3 2022, we are losing around 30 bps to 40 bps. That’s the main €“ the big picture here. So overall, if you look in a more longer-term, we are gaining share. Quarter-over-quarter, we are losing this small percentage of share. Market share is a consequence of what we are doing, but it’s not our main target. We could increase our market share if we wanted to by decreasing prices and so on, but we want to have healthy levels of margins and work with clients that see the value proposition that we have in such a way that we have levels of profitability and reaching these record levels of net income that we saw in Q4.
If you look at the market overall, we also see some moving parts here that the players who benefit from €“ in Q4 were those from big banks, two of them from big banks from €“ they are incumbents. And as far as we know, they got some advantage, some tailwinds related to big chain hotels, airlines and these type of merchants that we have lower or low exposure. So, in the segments that we work, we are happy with the share that we have. We are working with these clients, increasing TPV per merchant, increasing our net income. So, we’ll keep working with the clients in a way that we think is better for the company. Market share is a consequence of what we’re doing, but it’s not our main target at this point. So, that’s the main idea of market share.
And related to PIX, we don’t need to do additional investments to increase our PIX share. As we saw in the presentation, 9.8% of the PIX transactions in the country. This is very important for us because people use PagBank as primary account. People leave the money here. People leave the money in their account balance, which help us to reduce cost of funding. So €“ but going back to your question, straight to the point, there is no additional investments in technology to be made in order to increase our PIX share in the country.
Sheriq Sumar: Thank you so much. That’s helpful.
Operator: Our next question comes from James Friedman, Susquehanna.
James Friedman: Good results here. I was wondering if you could share at least some high-level thoughts on the margins. Is there, say, any reason that the company structurally can’t return to the teens margins you enjoyed when rates were more favorable?
Ricardo Dutra: Well, James, it’s €“ definitely, we have this €“ we had actually this headwind related to interest rates in the country in 2022, although we were able to offset that by repricing our base. So, that’s the main picture. We had this headwind, and we repriced our base in such a way that it could offset this increase in financial expenses. Interest rate is important for us. It’s an important driver for profitability because, of course, it affects our cost of funding. So, if this rate goes down from 13.75% per year to a level below that, we’d take advantage. So, how big is going to be this advantage, how big is going to be our or benefit, it’s hard to say to you at this point. But definitely, if interest rate goes down, we should have better margins.
