Unless otherwise indicated or the context otherwise requires, all references in this annual report to: (1) “PicPay Netherlands” are to PicS N.V. (formerly known as Picpay Holdings Netherlands B.V.); (2) “PicPay,” the “Company,” “we,” “our,” “ours,” “us” or similar terms are to PicPay Netherlands (or, when applicable, its predecessor for accounting purposes PicS Ltd.) together with its consolidated subsidiaries, including its indirect subsidiaries PicPay Brazil and PicPay Bank; (3) “PicPay Brazil” are to PicPay Instituição de Pagamentos S.A., a privately-held company (sociedade anônima fechada) incorporated in Brazil, and its consolidated subsidiaries; and (4) “PicPay Bank” are to PicPay Bank – Banco Múltiplo S.A. (formerly known as Banco Original de Agronegócio S.A.), a corporation (sociedade anônima) incorporated in Brazil.
In addition, in this annual report, except where otherwise indicated or where the context requires otherwise:
| ● | “Articles of Association” means PicPay Netherlands’ articles of association. |
| ● | “Banco Original” means Banco Original S.A., a Brazilian financial institution duly authorized by the Brazilian Central Bank and wholly-owned subsidiary of J&F Participações. |
| ● | “BX” or “BX Blue” means BX Negócios Inteligentes Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil. BX is a wholly-owned subsidiary of Guiabolso. |
| ● | “Class A common shares” means Class A common shares in the capital of PicPay Netherlands, with a nominal value of EUR0.01 per Class A common share, whereby each Class A common share confers the right to one vote per share at the general meeting. |
| ● | “Class B common shares” means Class B common shares in the capital of PicPay Netherlands, with a nominal value of EUR0.10 per Class B common share, whereby each Class B common share confers the right to ten votes per share at the general meeting. |
| ● | “common shares” means, collectively, Class A common shares and Class B common shares. |
| ● | “conversion shares” means conversion shares in the share capital of the Company, with a nominal value of EUR0.09 per conversion share, whereby each such share confers the right to nine votes per share at a general meeting. Conversion shares are introduced to facilitate a 1:1 conversion of Class B common shares into Class A common shares under Dutch law. If a conversion share is held by anyone other than the Company, such shareholder shall be obliged to offer and transfer such conversion share to the Company unencumbered and for no consideration. For more information see “Item 10. Additional Information—B. Memorandum and Articles of Association—Conversion.” |
| ● | “Crednovo” means Crednovo Sociedade de Empréstimo entre Pessoas S.A., a corporation (sociedade anônima) incorporated under the laws of Brazil. Crednovo is a wholly-owned subsidiary of PicPay Holding. |
| ● | “EUR” or “€” means the Euro, the lawful currency of the European Economic and Monetary Union. |
| ● | “FIDC FGTS” means Fundo de Investimentos em Direitos Creditórios PicPay FGTS, a Receivables Investment Fund (Fundo de Investimento em Direitos Creditórios) (FIDC) that began operating on December 17, 2024, with the purpose of acquiring receivables generated from FGTS consumer loans made by us. Such fund consists of a total of 825,674 quotas, of which 128,022 (approximately 16% of the total quotas) are subordinated quotas held solely by PicPay Bank and 697,652 senior quotas are held by accredited investors (third parties), including financial institutions, hedge funds and others. |
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| ● | “FIDC Somacred Vega Sicilia Assistência Financeira” means a Receivables Investment Fund (Fundo de Investimento em Direitos Creditórios) (FIDC) with the purpose of acquiring receivables generated from Financial Assistance (Assistência Financeira) as defined by Article 2 of SUSEP Rule 600, of April 13, 2020. On December 22, 2025, PicPay Bank invested R$100.0 million in FIDC Somacred Vega Sicilia Assistência Financeira. FIDC Somacred Vega Sicilia Assistência Financeira invests in receivables arising from the financial assistance product, which is an advance taken by customers on future withdrawals from their pension plans, originated by Kovr Previdência. PicPay Bank holds approximately 85% of the total outstanding equity capital (quotas) of FIDC Somacred Vega Sicilia Assistência Financeira, represented by senior quotas. The subordinated quotas, equivalent to approximately 5% of the total outstanding quotas, and Mezzanine quotas, equivalent to approximately 10% of the total outstanding quotas, are held by third parties. |
| ● | “FIDC PicPay I” means Fundo de Investimentos em Direitos Creditórios Não-Padronizados PicPay I, a Receivables Investment Fund (Fundo de Investimento em Direitos Creditórios) (FIDC) that began operating in May 2019 in order to facilitate our offering of installment payments to consumers. Currently, 100% of FIDC PicPay I’s senior quotas are held by PicPay Bank and 100% of FIDC PicPay I’s subordinated quotas are held by PicPay Brazil. |
| ● | “general meeting” means the corporate body of PicPay Netherlands consisting of holders of Shares and all other persons with a right to attend and address a general meeting or, as the context requires, the physical meeting of holders of Shares and other persons with a right to attend and address a general meeting; |
| ● | “Guiabolso” means Guiabolso Finanças Correspondente Bancário e Serviços Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil. Guiabolso is a wholly-owned subsidiary of PicPay Brazil. |
| ● | “Guiabolso Pagamentos” means Guiabolso Pagamentos Ltda. (formerly known as Just Correspondente Bancário e Serviços Ltda.), a limited liability company (sociedade limitada) organized under the laws of Brazil. Guiabolso Pagamentos is a wholly-owned subsidiary of Guiabolso. |
| ● | “J&F International” means J&F International B.V., a private limited liability company incorporated under Dutch law. As of the date of this annual report, J&F International directly owns 100% of our Class B common shares, which represents approximately 95.2% of the combined voting power in our general meeting. J&F International is a wholly-owned subsidiary of J&F Participações. |
| ● | “J&F Participações” means J&F Participações S.A., a corporation (sociedade anônima) incorporated under the laws of Brazil. J&F Participações is jointly controlled, pursuant to a shareholders’ agreement, by our ultimate controlling shareholders. For more information about the shareholders’ agreement of J&F Participações, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders—Shareholders’ Agreement of J&F Participações.” |
| ● | “Kovr Seguradora” means Kovr Seguradora S.A., a corporation organized under the laws of Brazil. Kovr Seguradora will be, upon closing of the Acquisition, a wholly-owned subsidiary of PicPay Participações. |
| ● | “Nosso Time iGaming” means Nosso Time iGaming Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil and which is a subsidiary of Picpay Participações. |
| ● | “PicPay Holding” means PicPay Holding Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil and which is a subsidiary of PicPay Netherlands. |
| ● | “PicPay Invest” means PicPay Invest Distribuidora de Títulos e Valores Mobiliários Ltda. (formerly known as Liga Invest Distribuidora de Títulos e Valores Mobiliários Ltda.), a limited liability company (sociedade limitada) organized under the laws of Brazil. PicPay Invest is a wholly-owned subsidiary of PicPay Brazil. |
| ● | “Picpay Participações” means Picpay Participações e Investimentos Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil which directly holds approximately 100% of the shares of Nosso Time iGaming. |
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| ● | “PicS Ltd.” means PicS Ltd., a Cayman Islands exempted company with limited liability. Effective as of December 30, 2023, J&F International, at that time the beneficial holder of 100% of the Class B common shares of PicS Ltd. (representing 99.615% of the total issued and outstanding common shares of PicS Ltd.), contributed the beneficial entitlement to these common shares to PicPay Netherlands, by way of a share premium contribution on the shares in the capital of PicPay Netherlands. The legal transfer of the Class B common shares of PicS Ltd. to PicPay Netherlands was effected on March 14, 2024. As of the date of this annual report, PicPay Netherlands directly holds 100% of the Class B common shares of PicS Ltd. (representing 99.615% of the total issued and outstanding common shares of PicS Ltd.) and indirectly owns the beneficial entitlement to 100% of the Class A common shares of PicS Ltd. (representing 0.385% of the total issued and outstanding common shares of PicS Ltd.). |
| ● | “PicS Holding” means PicS Holding Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil, which directly holds 100% of the shares of PicPay Brazil, PicPay Bank and Crednovo. |
| ● | “Shares” means, collectively, the Class A common shares, the Class B common shares and the conversion shares. |
| ● | “Stichting ACC Family” means Stichting ACC Family, a foundation (stichting) incorporated under Dutch law. As of the date of this annual report, Stichting ACC Family directly owns 7.4% of our Class A common shares, which will represent approximately 0.4% of the combined voting power in our general meeting. Mr. Anderson Chamon, PicPay Brazil’s co-founder and its executive vice-president of new businesses has been appointed as beneficiary of Stichting ACC Family, and as such holds the beneficial entitlement to the shares in PicPay Netherlands held by Stichting ACC Family. |
| ● | “Stichting AGR” means Stichting AGR, a foundation incorporated under Dutch law. As of the date of this annual report, Stichting AGR directly owns 2.5% of our Class A common shares, which will represent approximately 0.1% of the combined voting power in our general meeting. Mr. Aguinaldo Gomes Ramos Filho, a nephew of Messrs. Joesley Mendonça Batista and Wesley Mendonça Batista and a cousin of Mr. José Antonio Batista Costa, has been appointed as beneficiary of Stichting AGR, and as such holds the beneficial entitlement to the shares in PicPay Netherlands held by Stichting AGR. |
| ● | “Stichting ECS” means Stichting ECS, a foundation incorporated under Dutch law. As of the date of this annual report, Stichting ECS directly owns 2.5% of our Class A common shares, which will represent approximately 0.1% of the combined voting power in our general meeting. Mr. Eduardo Chedid Simões, our chief executive officer and executive director, has been appointed as beneficiary of Stichting ECS, and as such holds the beneficial entitlement to the shares in PicPay Netherlands held by Stichting ECS. For more information about Mr. Eduardo Chedid Simões, see “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management.” |
| ● | “Stichting JAB” means Stichting JAB, a foundation incorporated under Dutch law. As of the date of this annual report, Stichting JAB directly owns 9.9% of our Class A common shares, which will represent approximately 0.5% of the combined voting power in our general meeting. Mr. José Antonio Batista Costa, our chairman and one of our non-executive directors, has been appointed as beneficiary of Stichting JAB, and as such holds the beneficial entitlement to the shares in PicPay Netherlands held by Stichting JAB. For more information about Mr. José Antonio Batista Costa, see “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management.” |
| ● | “ultimate controlling shareholders” means Messrs. Joesley Mendonça Batista and Wesley Mendonça Batista. |
| ● | “Zem Collection” means Zem Collection Ltda., a limited liability company (sociedade limitada) organized under the laws of Brazil and which is a subsidiary of PicPay Participações. |
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Glossary of Technical Terms
The following is a glossary of certain industry and other technical terms used in this annual report:
| ● | “ABECS” means the Brazilian Association of Credit Card Companies and Services (Associação Brasileira das Empresas de Cartões de Crédito e Serviços), a trade association that represents participants in the Brazil credit card market. |
| ● | “acquirer” means a payment institution that, without managing payment accounts, provides the following services: (1) accreditation of receivers (usually merchants) for the acceptance of payment instruments issued by a payment institution or financial institution participating in the same payment scheme; and (2) participation in the settlement process of payment transactions as a creditor with respect to the card issuer and a debtor with respect to the accredited merchant, in accordance with the rules of the payment scheme. The acquirer receives the transaction details from the merchant’s terminal, passes them to the card issuer for authorization via the payment scheme, and completes the processing of the transaction. The acquirer arranges settlement of the transaction and credits the merchant’s bank account with the funds in accordance with its service agreement with the merchant. The acquirer also processes any chargebacks that may be received via the card issuer regarding consumer transactions with merchants. The relationship between the acquirer and the merchant is governed by an accreditation agreement, which contains clauses about operational transaction rules, payment of fees and tariffs, confidentiality, intellectual property, prevention of money laundering and combating the financing of terrorism, use of brand and securitization of receivables. Brazilian acquirers include GetNet, Stone, Rede and Cielo. |
| ● | “ANBIMA” means the Brazilian Financial and Capital Markets Association (Associação Brasileira dos Mercados Financeiro e de Capitais), a trade association of participants in the Brazilian financial market that, among other activities, publishes certain statistics regarding the Brazilian financial and capital markets. |
| ● | “APIs” means application programming interfaces, a set of clearly defined methods of communication between different software components that enables developers and resellers to create apps that can easily connect and integrate with our platform. |
| ● | “API calls” means requests by one software system to another to retrieve or send data. In the context of our operations, API calls represent the number of times our systems interact with third-party systems to authorize payment transactions through our account aggregator infrastructure. |
| ● | “Applicable Anticorruption Laws” includes any laws, decrees or regulations aimed at preventing and combating corruption, administrative misconduct, fraud, bribery, money laundering and conflict of interests including, without limitation, Brazilian Federal Law No. 12,846/2013, Brazilian Federal Decree No. 11,129/2022, Brazilian Federal Law No. 14,230/2021, Brazilian Federal Law No. 14,133/21, Brazilian Federal Law No. 9,613/1998, the U.S. Foreign Corrupt Practices Act of 1977 (FCPA), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997, the UK Bribery Act (UKBA) or any other applicable laws, whether domestic or foreign. |
| ● | “BNPL” means buy now, pay later, which is a short-term loan product made available for certain PicPay consumers as a source of funding for purchases or other transactions in our ecosystem. |
| ● | “boleto” (bank slips) means a printable document issued by merchants that is used to make payments in Brazil. Boletos can be used to pay bills for products or services, utilities or taxes. Each boleto refers to a specific merchant and consumer transaction, and includes the merchant’s name, consumer information, expiration date and total amount due, plus a serial number that identifies the account to be credited and a barcode to enable the document to be read and processed by a Brazilian ATM, as well as by the mobile apps of many Brazilian banks. A boleto can be paid in cash at a bank teller, at an ATM or by bank transfer. Our payment platform can be used by our consumers to pay boletos. |
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| ● | “Brazil” means the Federative Republic of Brazil. |
| ● | “Brazilian government” means the federal government of Brazil. |
| ● | “Brazilian real,” “Brazilian reais,” “real,” “reais” or “R$” means the Brazilian real, the official currency of Brazil. |
| ● | “Brazilian Central Bank” or “BACEN” means the Banco Central do Brasil. |
| ● | “CADE” means the Conselho Administrativo de Defesa Econômica, the Brazilian federal authority responsible for the prevention and suppression of violations of the economic order, as established by Brazilian Federal Law No. 12,529/2011. |
| ● | “CAGR” means compound annual growth rate. CAGR is equal to the final amount divided by the initial amount, raised to the power of 1 divided by the number of years minus one and multiplied by 100 to convert the result to a percentage. Our historical growth rates do not guarantee future results, levels of activity, performance or achievements. |
| ● | “cardholder” means a holder (either an individual or an entity) for a credit or prepaid card. The cardholder may use the card at any merchant accredited by an acquirer or sub-acquirer for the acceptance of that type of card. |
| ● | “card brand” means the name of the payment scheme settlor that is printed on the issued branded credit and/or prepaid cards (for example, Mastercard, American Express and Visa). |
| ● | “card issuer” means a payment institution or a financial institution that acts as issuer of cards and administrator of prepaid/postpaid payment accounts or deposit accounts operated by such institutions in a certain payment scheme and that meets the brand qualification requirements to issue branded credit and/or prepaid cards. Card issuers are also responsible for collecting amounts spent with branded credit and/or prepaid cards from cardholders. |
| ● | “cash-in” means to add funds to the balance of a digital wallet account from outside our platform via transfers from other financial institutions (wire transfers), including via the Brazilian Central Bank’s instant payment system (Pix), via boleto (bank slip), through the receipt of funds via P2P payments, payroll portability, contracting loans or pulling funds from other banks in app through Open Finance (PicPay operating as a payment initiator). |
| ● | “cash-out” means to remove funds from a digital wallet account on our platform via transfers to other financial institutions (wire transfers), including via the Brazilian Central Bank’s instant payment system (Pix), PicPay prepaid card or cash withdrawal. |
| ● | “CDB” means Certificate of Bank Deposit (Certificado de Depósito Bancário), which is a fixed income security that represents a loan a consumer makes to the financial institution. The financial institution subsequently remunerates the consumer with interest on the amount invested. |
| ● | “CDI rate” means the Brazilian interbank deposit (certificado de depósito interbancário) rate, which is an average of interbank overnight deposit interest rates in Brazil. |
| ● | “chargeback” means a claim where the consumer requests a reversal of the transaction amount from the card issuer on the basis of a commercial claim (for example, if the goods are not delivered, or are delivered damaged), fraud or error. |
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| ● | “CMN” means the Brazilian National Monetary Council (Conselho Monetário Nacional). |
| ● | “CNSP” means the National Private Insurance Council (Conselho Nacional de Seguros Privados). |
| ● | “Consumer Acquisition Costs” means the sum of marketing expenses such as performance media and member-get-member (MGM) expenses. |
| ● | “cohort” means a selected group of consumers that we follow over time to analyze their behavior from different perspectives, such as retention and engagement. |
| ● | “CVM” means the Brazilian Securities Commission (Comissão de Valores Mobiliários). |
| ● | “deposits” mean the balance of the payment account and/or piggy banks (cofrinhos) held by consumers that have a payment account on our platform. |
| ● | “digital wallet” means the tools and services made available to users of the PicPay app in connection with the payment services offered by PicPay. |
| ● | “digital wallet account” means the payment account made available to consumers and merchants in connection with the payment services offered by PicPay. |
| ● | “digital wallet business” means our business in connection with our digital wallet product. |
| ● | “Exchange Act” means the United States Securities Exchange Act of 1934, as amended. |
| ● | “e-wallet” means an online prepaid payment account (conta de pagamento pré-paga) available to users of the PicPay app mainly used for e-commerce payments. |
| ● | “FGTS” means the Severance Indemnity Fund for Employees in Brazil (Fundo de Garantia do Tempo e Serviço). Under current legislation, employees in Brazil can opt to receive part of their FGTS on an annual birthday basis and/or in specific situations, such as dismissal without just cause, retirement, acquiring a home or serious illnesses. |
| ● | “FGTS loans” means loans made through our app under which consumers can drawdown in advance up to seven annual payments of their FGTS. We receive repayment of these installments and interest directly from the FGTS. |
| ● | “FIDC” means a Receivables Investment Fund (Fundo de Investimento em Direitos Creditórios), an investment fund legal structure established under Brazilian law designed specifically for investing in credit rights receivables. FIDCs (and quotas representing interests therein) are regulated by the rules and regulations of the CMN and the CVM; in particular Resolution No. 2,907/01 of the CMN, and CVM Resolution No. 175/22, as amended from time to time. |
| ● | “Financial institution partners” means partner financial services entities that are integrated into our app to distribute their products and services to our consumers. |
| ● | “Financial transaction” means any payment, transfer, cash-in or cash-out in our ecosystem. It includes, without limitation: (1) P2P and P2M payments, bill payment (including boleto and utility bills) and purchases at the PicPay Shop or financial marketplace using our app or the PicPay Card; (2) money transfers between accounts; (3) any kind of cash-in, including via wire transfer from financial institutions, boletos, PicPay Cards or any credit card issued by other financial institutions, or loans issued by PicPay or third-party partners; and (4) any kind of cash-out, including via wire transfer to other institutions or cash withdrawals. |
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| ● | “GMV” means gross merchandise volume, which is the total amount of sales from the PicPay Shop, including all taxes, fees and shipping costs. |
| ● | “IBGE” means the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística). |
| ● | “Income leverage ratio” means the credit limit exposure of each consumer cohort over their monthly income. |
| ● | “interchange fee” means a fee paid to the card issuer for transactions established in the scope of a payment scheme. |
| ● | “licensed merchants” means merchants that can receive payments through POS devices registered with our partner-acquirers. We have entered into agreements with the Brazilian acquirers GetNet, Stone, Rede and Cielo. |
| ● | “lifetime value” or “LTV” is an estimate of the average revenue that a consumer will generate over their lifetime. |
| ● | “merchant” means any entity or organization that accepts electronic payment transactions for the payment of goods or services. |
| ● | “merchant discount rate” or “MDR” means the fee or commission paid by merchants to acquirers or sub-acquirers for the service of capturing, processing, transmitting and settling transactions. The merchant discount rate is applied to the value of each cardholder’s transaction and includes the interchange fee. |
| ● | “monthly active consumer” means a consumer who has opened our app at least once and/or made a financial transaction and/or generated revenues during the preceding month. Accounts that were voluntarily closed during the preceding month are included in the calculation of total active consumers. |
| ● | “non-earmarked credit operations” correspond to loans and financing contracts agreed with all terms, including interest rates, freely negotiated between financial institutions and borrowers. |
| ● | “NPL” corresponds to non-performing loans, which means loans that are in default because the borrower has not made a scheduled payment for a specified period. |
| ● | “NPL over 90 days” corresponds to the balance overdue by more than 90 days divided by the total credit portfolio. |
| ● | “Open Banking” means the exchange of data and services between financial institutions and third-party providers. |
| ● | “Open Finance” means the sharing of data, products and services between regulated entities, such as financial institutions, payment institutions and other entities licensed by the Brazilian Central Bank, at the consumer’s discretion, in connection with individuals’ or legal entities’ own data. Open Finance is an extension of Open Banking, going beyond the scope of data and services available at consumers’ banks, covering the entire financial footprint. The ultimate goal of the implementation of an open finance environment is to enhance the efficiency in credit and payments markets through the promotion of a more inclusive and competitive business environment, as well as preserving the safety of the National Financial System (Sistema Financeiro Nacional). |
| ● | “open platform” means a flexible platform that is open to be integrated to any external entity who complies with the platform’s terms of use. |
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| ● | “P2M” means person-to-merchant. We offer P2M payment solutions to our consumers. A P2M transaction occurs when a consumer pays an offline or online business affiliated with our PicPay network via QR Code, Pix or e-wallet or via licensed merchants. |
| ● | “P2P” means peer-to-peer or person-to-person. We offer P2P solutions to our consumers. A P2P transaction is a closed loop (origin and destination of the transaction are PicPay accounts), and it occurs when a consumer makes an electronic currency and instant transfer or payment to another person through an app. |
| ● | “payment institution” means a legal entity (instituição de pagamento) that participates in one or more payment schemes and is dedicated to executing, as its principal or ancillary activity, those payment services described in Article 6, item III, of Brazilian Federal Law No. 12,865/13 to cardholders or merchants, including those activities related to the provision of payment services. Specifically, based on current regulations, the Brazilian Central Bank (BCB) has opted to narrow the definition of payment institutions as set out in Brazilian Federal Law No. 12,865/13 to include only those entities that can be classified into one of the following four categories, according to Article 3 of BCB Resolution 80/2021: (1) issuer of electronic currency (prepaid payment instruments); (2) issuer of post-paid payment instruments (e.g. credit cards); (3) acquirers; and (4) payment initiator service provider (PISP). |
| ● | “payment scheme” means the collection of rules and procedures that govern payment services provided to the public, with direct access by its end consumers (i.e., payers and receivers). These payment services must be accepted by more than one receiver in order to qualify as a payment scheme. A payment scheme is established by and operated by a payment scheme settlor. |
| ● | “payment scheme settlor” means the entity responsible for the functioning of a payment scheme, for the associated card brand and for the authorization of card issuers and acquirers to participate in the payment scheme. Mastercard and Visa are major payment scheme settlors globally, including Brazil. |
| ● | “payment initiator” means the entity licensed by the Brazilian Central Bank, which enables consumers to access and transact in app, transferring funds from other bank accounts or digital wallets. |
| ● | “payroll portability” means the ability of consumers to receive their salary in the financial or payment institution of their choice. |
| ● | “PicPay Card” means our combo prepaid and credit card (i.e., the Banco Original issued co-branded credit cards that our customers have been able to contract through our app since 2020), which was transferred to PicPay from Banco Original in January 2024. |
| ● | “PicPay Card TPV” means the total payment volume generated from transactions made with our PicPay Card. |
| ● | “PicPay’s payment network” means our responsibility for processing electronic payments between consumers and businesses through our payment acceptance solutions, such as QR Code, POS terminals, payment links, among others. |
| ● | “PicPay Shop” means our open e-Commerce platform that allows businesses to offer a wide range of products and services to our consumer base, including online shopping in-app or through our affiliate model that directs our consumers to our partners’ websites, including Amazon, Shopee, AliExpress. |
| ● | “Pix” means the instant payments system launched by the Brazilian Central Bank in 2020, enabling consumers to make and receive instant payments and transfer funds to any bank or payment domicile instantaneously at any time. |
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| ● | “Pix Credit” means the tool available in the PicPay app that enables users to make an instant payment Pix transaction financed by their credit card, including in installments, registered with the PicPay app. |
| ● | “Pix Credit TPV” means the TPV from our Pix Credit product. |
| ● | “Pix key” means a key that every consumer that makes and receives instant payments and transfer funds to any bank or payment domicile instantaneously at any time, needs to register. This “Pix key” is linked to the consumer’s account and can be the consumer’s mobile number, email address, social security number or a random password. According to the Brazilian Central Bank, consumers can have a limited number of five keys per account, while businesses can register up to 20 keys per account. |
| ● | “PNAD” means National Household Sample Survey, which is a survey conducted annually by IBGE, which provides information on the insertion of the population in the labor market, associated with education and demographic characteristics, as well as for the study of socioeconomic development of Brazil. |
| ● | “POS” means a point of sale (merchant) where a transaction is completed. |
| ● | “POS device” means a device used to execute a card transaction, commonly known in Brazil as “maquininha.” POS devices registered with our partner-acquirers may also receive payments from the PicPay app via QR Code. In January 2021, we entered into agreements with the acquirers GetNet, Stone, Rede and Cielo to execute card transactions using their POS devices. |
| ● | “Principality” is the term we use to describe when PicPay becomes the primary financial services platform for its consumers. |
| ● | “public payroll loan” means a loan for which the payments and interest are discounted either directly from the consumer’s salary from the payroll of a government body or from their government pension or other benefit payments (empréstimo consignado). |
| ● | “QR Code” means Quick Response Code, which is an image that stores information, analogous to a two-dimensional bar code. |
| ● | “quarterly active client” means a client, which can be an individual or a business, who has opened our app at least once and/or made a financial transaction and/or generated revenues during the preceding three-month period. Accounts that were voluntarily closed during the preceding three-month period are included in the calculation of total active clients. |
| ● | “quarterly active consumer” means a consumer who has opened our app at least once and/or made a financial transaction and/or generated revenues during the preceding three-month period. Accounts that were voluntarily closed during the preceding three-month period are included in the calculation of total active consumers. |
| ● | “quarterly average cost to serve per quarterly active client” means the sum of transaction expenses, technology expenses, marketing expenses (excluding customer acquisition expenses), personnel expenses and administrative expenses, divided by the average number of quarterly active clients during the period. The average number of quarterly active clients is defined as the average of the number of quarterly active clients on the end date of the immediately prior three-month period and the number of quarterly active clients on the end date of the current three-month period. We exclude credit loss allowance expenses from this definition because these expenses comprise the cost of risk related to our credit operations, which means the expected losses in connection with the likelihood that our consumers default on their credit obligations to us. We exclude these expenses due to our focus on measuring our operational efficiency in terms of unitary costs of our transaction activities and other expenses related to the maintenance of our daily activities, such as personnel and technology expenses. Moreover, only a small portion of our active consumers have our own credit products; and, therefore, we believe that credit loss allowance expenses should not be included in the calculation of quarterly average cost to serve per quarterly active client, which includes all of our active consumers. |
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| ● | “quarterly average revenue per quarterly active client” or “Quarterly ARPAC” means the total quarterly revenue and financial income of clients divided by the average number of quarterly active clients during the period. The average number of quarterly active clients is defined as the average of the number of quarterly active clients on the end date of the immediately prior three-month period and the number of quarterly active clients on the end date of the current three-month period. |
| ● | “quotas” means equity securities (similar to shares or units) in limited liability companies (sociedade limitada) formed under the laws of Brazil. Quotas represent the amount in money, credits, rights or assets the quotaholders contributed when forming the company or that the quotaholder subsequently contributed or that the company otherwise accumulated. Each quotaholder’s liability is limited to the equity amount of its respective quotas. |
| ● | “SEC” means the U.S. Securities and Exchange Commission. |
| ● | “secured loans” or “collateralized loans” include FGTS loans and payroll loans, together with loans secured by a specific form of collateral, including physical assets, such as property and vehicles, or liquid assets, such as cash. |
| ● | “Securities Act” means the United States Securities Act of 1933, as amended. |
| ● | “SELIC” means the interest rate established by the Brazilian Special Clearance and Custody System (Sistema Especial de Liquidação e Custódia). |
| ● | “sub-acquirer” means an entity that: (1) provides the service of accreditation of receivers (usually merchants) for the acceptance of payment instruments issued by a payment institution or financial institution participating in the same payment scheme; and (2) participates in the settlement process of payment transactions as a creditor with respect to the acquirer and a debtor with respect to the accredited merchant, in accordance with the rules of the payment scheme. Sub-acquirers act as intermediaries between acquirers and merchants, and also can be a payment institution which manages payment accounts. |
| ● | “SMB TPV” means the total payment volume related to our business ecosystem. It considers the acceptance volume from our merchant acquiring platform (QR Code, Pix transactions received, e-wallet transactions, processing of instant payments and bill payments made through our platform using third-party credit cards as a source of fund, payment links, and PoS terminals), our banking solutions for entrepreneurs with a registered PicPay account (including Pix transactions, bill payments, and prepaid and credit card transactions), and card transactions made through our corporate benefit solutions (including meals, food, transportation, and other flexible benefits to employees). |
| ● | “SMEs” means small and medium-sized enterprises. |
| ● | “SUSEP” means the Superintendence of Private Insurance (Superintendência de Seguros Privados), the Brazilian federal autarchy responsible for the control and supervision of insurance markets, open private pension plans, capitalization, and reinsurance activities in Brazil, as established by Decree-Law No. 73/1966. |
| ● | “total payment volume” or “TPV” means the aggregate amount of payments on-us (payments inside the PicPay ecosystem) and PicPay Card payments off-us (outside the PicPay ecosystem), outbound transfers (sending money) and cash-out, net of reversals, successfully completed on our platform. |
| ● | “unitary margin” means the contribution margin per consumer, which is the incremental result we generate from our consumers after deducting the costs we incur from their transactions on a cumulative basis. |
| ● | “U.S. dollar,” “U.S. dollars” or “US$” means U.S. dollars, the official currency of the United States. |
| ● | “Wallet and Banking TPV” means the total payment volume generated from our wallet and banking product (P2P, cash-out Pix, bill payment, money withdrawal, wire transfers and international remittance & exchange). |
| ● | “YoY growth” means the percentage of change in a financial or operational metric compared to the same period in the previous year. |
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