Good evening. My name is Kyle. I'll be your conference operator today. At this time, I would like to welcome everyone to PagBank PagSeguro's Earnings Conference Call for the second quarter of 2021. This event is being recorded, and all participants will be in listen-only mode during the company's presentation. After the speaker's remarks, there will be a question- and- answer session. At that time, further instructions will be given. Should any participant need assistance during the call, please press star zero to reach the operator. This event is also being broadcast live via webcast, and may be accessed through PagBank PagSeguro's website. At investors.pagseguro.com, where the presentation is also available. Participants may view the slides in any order they wish. The replay will be available shortly, after the event's concluded. Those following the presentation via webcast, may pose their questions on PagBank PagSeguro's website.
Before proceeding, let me mention that any forward statements. Included in the presentation or mentioned on this conference call. Are based on currently available information in PagBank PagSeguro's current assumptions, expectations, and projections about future events. While PagBank PagSeguro believes that their assumptions, expectations, and projections. Are reasonable in view of currently available information. You are cautioned, not to place undue reliance on these forward-looking statements. Actual results may differ materially, from those included in PagBank PagSeguro's presentation. Or discussed on this conference call for a variety of reasons. Including those described in the forward-looking statements, and risk factors sections of PagBank PagSeguro registration statement. On Form 20-F, and other filings with the Securities and Exchange Commission. Which are available on PagBank PagSeguro's investor relations website. Finally, I would like to remind you that during the conference call. The company may discuss some non-GAAP measures.
For more details, the foregoing non-GAAP measures, and the reconciliation of those non-GAAP financial measures. To the most directly comparable GAAP measures, are presented on the last page of this webcast presentation. Now, I will turn the conference over to Ricardo Dutra, Chief Executive Officer. Please, Mr. Dutra, you may begin your presentation.
Good evening from São Paulo, everyone. Thanks for joining our second quarter results conference call. Tonight, I have here with me Artur Schunck, our Chief Financial Officer, and Eric Oliveira, our Head of Investor Relations. First, we hope you, and your families are well, and safe. Before we proceed, let me share a quick update. About the current situation related to the pandemic, and its impact in Brazil. Last quarter, we shared our improving confidence that it seemed the worst was over. Vaccination continues to take place. Currently, approximately 70% of the population. Took at least one shot, and around 30% took two shots already. The contamination death ratios have been decreasing. Which has been encouraging authorities, to ease the social distance measures, in several regions of the country.
The ongoing secular shift from cash to electronic, and digital transactions continues. Reinforcing that the consumer behaviors, are changing despite the reopening. We have seen millions of people, be included into the financial system. We also see, across the world. Several companies embracing the digital banking strategy. To explore this unique opportunity. For example, in this quarter, we were honored to see PayPal, and Square. Announcing their initiatives to expanding into financial services. Which is the move we have done in May 2019, with the launch of PagBank. In addition, as the regulators in Brazil continue to foster competition. Players with tech- DNA, a strong execution, and robust balance sheet. Have the chance to explore new verticals, cross-selling strategies, and close existing loop. Between merchants, and consumers while optimizing the gross profit generation per user.
Having consistently invested during the last years, in our two-sided ecosystem has been paying off. In June 2021, the number of PagBank clients surpassed 11 million, a nd engagement continues to increase. As the number of logins only in our app per workday. Reaches 10 million or one login per user per workday. Another example is the credit expertise. After more than three years, the combination of sophisticated data analytics. An incredible team, a banking license, and unique active merchant base. Gave us the diligence, to decelerate the underwriting amid the pandemic. To warm up the engines for the reopening. We are delighted to announce, that our credit performance surpassed the mark of BRL 1 billion. With an increasing origination for the coming months, and controlling the NPL ratios. In payments, the scenario also looks brighter.
Our Acquiring TPV, continues to grow strongly. Giving us the confidence to review upward, our payments volumes guidance for 2021. Compared with Q2 2020, PagSeguro was the company in the Brazilian market. With the highest Acquiring TPV growth, among the top five Brazilian acquirers. 89% year-over-year, and probably the highest total net revenue growth, 75% year-over-year. Our strong brand, superior logistics infrastructure, and complete banking offer to our merchants. Among other strengths, allowed us to keep growing in the long tail, and to roll out our Hubs faster than expected. Our Hubs results have been impressive, reinforcing our thesis. That it's easier to go up in the pyramid, than to go down. And that even SMBs, are underserved in the country.
With this new TPV mix, as we commented last quarter. Our take rates are stable, and we expect this take rate level for the rest of the year. Finally, we continue to pursue for the optimum capital allocation, and the best balance between growth and profitability. We reduced the CapEx per sale ratio, from 25% in Q2 2020 to 17% in Q2 2021. A positive surprise, leading to a guidance review for CapEx in 2021. Driven by lower POS acquisition, since we took the right decisions last year. To prepare the inventory levels. Which reinforced our massive scale, and purchasing power. Improving the unit economy of our cohorts. Investments in technology, have been helping us to maintain. Our strategy to grow organically, and we are happy to highlight four new products. First, cell phone insurance, our fourth insurance product distributed by Pag.
We also launched an exclusive investment fund, PagBank All Seasons. Which gives the options to our clients, to diversify their investments. We will also launch Brazilian Treasury Bonds trade platform. Our Pag Invest vertical already counts with five CDs, and 50 investment funds. With several asset allocation strategies s uch as equities, corporate bonds, FX, gold, even cryptocurrencies. Finally, we are launching an overdraft loans product. Initially, offered only to our best cohorts. Which will expand the credit options for our clients. All the positive impacts we have been producing in our society. Will be shared next month, in our first sustainability report. Where all the stakeholders, will have the opportunity to follow closer. Our initiatives to serve better our clients, measured by the highest standards available in the market.
Also, we plan to have our first Investor Day in November. A brand-new initiative to discuss the strategic plans, for the company for the coming years. Where Luiz Frias, our Founder and Chairman, and part of the Pag senior management team. Will share their thoughts about the trends, the future of finance. And how we are preparing the company to keep consolidating its leadership in financial services, and payments? I'm very encouraged, by the recovery trajectory. And pleased with the momentum, in both businesses PagSeguro and PagBank. Finally, nothing of this would have happened, without the confidence of our shareholders. The commitment of our suppliers, and the best, and most committed team. Working hard every day to promote our mission. Being part of the financial life cycle of every Brazilian citizen. Promoting massive financial inclusion in our country. Thank you very much, PagBank, PagSeguro team.
That said, Artur and I will present some slides, and we'll have a Q&A session at the end. On slide three, we highlight the achievements of the second quarter. Record total revenue of BRL 2.4 billion, up 75%. With Acquiring revenue reaching BRL 2.2 billion, and PagBank revenue of BRL 182 million. All-time high consolidated TPV of BRL 102 billion. Up 154%, with Acquiring TPV growing 89%. With Hubs TPV, and online TPV maintaining the strong growth trends observed in the past quarters. And PagBank TPV growing 341%, both in comparison to the same period of last year. Adjusted EBITDA of BRL 629 million, up 64%. With Acquiring adjusted EBITDA reaching BRL 730 million. And PagBank adjusted EBITDA reducing losses, as a percentage of PagBank revenue. Gaining traction to reach the break-even, in the coming quarters. Non-GAAP net income of BRL 245 million, up 12% year-over-year.
CapEx per sales went down from 25% in Q2 2020 to 17% in Q2 2021. In June, our PagBank active clients surpassed 11 million. Driven by an outstanding 2.1 million net addition quarter. While active merchants continued to be healthy net addition pace above 220,000. Reaching 7.6 million active merchants. Next slide, we present PagSeguro's highlights. While in Q2 2021 versus Q2 2020, the total cards industry in Brazil grew 52%. Our Acquiring TPV grew 89%, driven by the secular shift to electronic payments. Combined with our successful go-to-market strategy, to serve not only long-tail merchants. But also, sellers larger than long tails to our Hubs. Our active merchants reached 7.6 million.
Although our metric for active merchants, consider at least one transaction in the last 12 months. And it may differ from other players. In chart below, we can see our dominance in number of merchants. When compared with other players in the industry. In Q2, we had 226,000 merchants net adds. It is a strong number, it wasn't better because we saw a higher churn in April 2021. Related to the business mortality from April 2020. During the peak of pandemic, and lockdowns in Brazil. As for active merchants, we consider at least one transaction in the last 12 months. Businesses that closed in April 2020, and did not generate any TPV. Since then, only affect our churn rates in April 2021. Important to say, we did not observe higher churn in May and June. And we had healthy net adds in these two months.
Moving to the right side of the slide. TPV trends observed in July, and first day of August are also encouraging. Despite the hard comps, due to the Corona Voucher Program distributed last year. Volumes grew 55% year-over-year in July. Additionally, during last week, the Saturday before Father's Day in Brazil. We reached a new all-time high daily TPV. Bottom right, we see that in the first seven months of the year, Acquiring TPV grew 70%. Moving to slide five, Acquiring revenues grew 77%. In comparison to the same period last year, or 35% on a two-year CAGR basis. The growth was due to a better TPV mix. Toward credit cards volumes, and our successful strategies to serve larger merchants. Which supported Acquiring net take rate of 2.24%, stable in comparison to the first quarter.
Bottom right, our adjusted EBITDA reached BRL 730 million. Almost a 60% growth, in comparison to the second quarter of 2020. Important to mention that last year, there was a tax provision reversal in the amount of BRL 84 million. Which we excluded for a better comparison. Despite the high investment to roll out our Hubs, and continuous improvements in our payment services to our merchants. We were able to gain market share, consolidate our position, and increase EBITDA. Moving to the next slide. Taking the opportunity exploring the previous slide, I want to share the results of our Hubs. Hubs TPV grew 4x year-over-year, outpacing best estimate of our models. Due to the economy reopening, and a disciplined execution to serve larger merchants. Combined with a powerful competitive advantage, which is PagBank.
We are the only payments company in the market, with a complete digital account. And without any conflict of interest, with controlling shareholders or partners. Which allow us to look for the best combination. To serve merchants, and leverage gross profits per clients. Exploring both money flows, the cash in, and the cash out. We are targeting merchants on average 4x- 5 x larger, than our average long-tail seller. By the end of 2021, we are expecting to cover more than 80% of the Brazilian GDP. With approximately, 300 Hubs throughout the country. Backed by a strong sales culture, which means young professionals. With seasonal sales professions for other sectors. We are creating a unique relationship model, driven not only by client activation, but also by client engagement. We are also observing a larger number of software subscribers. Which was 801,000, already, represent 11% of PagBank's active merchants.
Finally, PagBank continued to be the best strategy. To engage merchants, and increase cross-selling opportunities. In June, we reached 82% of active users. PagBank's merchants that used payment, and digital banking within the last 12 months. A growth of 54 percentage points in comparison to Q2 2019. Moving to slide seven, we give some infos about our online, and omni-channel volumes. Bottom left, online TPV grew 104% year-over-year. Driven by web checkouts, cross-border transactions, and link of payments. Omni-channel volumes, which considers volumes from merchants. That accept not only POS transactions, but also use online payment solutions. Double their share in comparison to Q1 2020. Last quarter before the outbreak of COVID-19 in Brazil.
We continue to take advantage of wide platform. Increasing barriers against competition, and potential pressures on yields. Once its anti-fraud system guarantees, the best approval rate in the market. And split payment solution is highly customizable for e-commerce, marketplaces, and other payment methods. On the bottom right, although it represents a small portion of our total TPV, Boa Compra. Our subsidiary focused on providing cross-border transactions for merchants, is growing steadily. Moving to slide eight, another grateful surprise. We had a record net addition of 2.1 million new PagBank clients. Surpassing the mark of 11 million PagBank active users. Being 45% of these clients composed by consumers. Combined with the increase in product per user ratio, which went from 2.6 products. In Q2 2020 to three products in this quarter. Accelerated PagBank TPV, which grew 341% year-over-year.
PagBank revenues continue to present healthy trends. Reaching BRL 182 million, up 89% year-over-year, with the better trends in adjusted EBITDA losses. Which had a negative margin of 80% in Q2 2020, versus negative margin of 55% in Q2 2021. Moving to slide nine, going to share some additional information about engaging metrics. The number of active cards indexed, to 100 increased 4x in comparison to Q2 2019. While card spends doubled in comparison to Q2 2020. PagBank app logins reached an incredible mark of 783 million, three times more than the same period of 2020. Which is similar to say that, every PagBank client logged in our app on average one time every workday.
The number of payroll portability skyrocketed, increased 7x. Backed by our cashback incentive to clients with formal paychecks. To make the portability to PagBank, being able to receive up to BRL 600, or $120 in the next 36 months. Finally, PagInvest Assets under Custody. Almost reached BRL 5 billion, up 85% year-over-year. Driven by our increasing number of registered clients. With access to CDs, and investment funds offers. In July, registered clients were 647,000, and we are offering almost 50 investment funds on our platform. Which has been key to deepen our relationship with our clients, as well to attract new ones. As I said in my initial remarks, we're happy to launch o ur Brazilian Treasury trades platform in the next week. Now, I would like to turn the conference over to Artur, our CFO. Who will talk about our credit portfolio, and our financial results for the quarter.
Artur, please go ahead.
Thanks, Ricardo. Good evening, everyone. I also hope all of you, and your family are well, and in good health. Following our presentation in slide 10. The performance of our credit portfolio is improving every day. Based on efficient credit models, our experienced team, and several learnings from the last three years of operation. June ended with a total credit portfolio surpassing BRL 1 billion. Being 56% of working capital loans, 41% of credit cards, and 2% of other credit products. I would like to reinforce that credit underwriting in Brazil, is not a 100-m sprint race. It is a marathon where learnings from the experience, patience, and preparation make all the difference. We have been preparing the company since day one. And now we already achieved more than three years, of credit underwriting to micro-merchants.
The portfolio is 100% booked in our balance sheet. Which provided us the awareness, and diligence to decelerate in the past, and to speed up now. Additionally, we see the registry of receivables. As an opportunity for tech companies, which provide financial services. Even though markets should not assume the registry, as a parachute for poor credit underwriting. On the right side, our cash position remained very strong with a positive balance of BRL 8.2 billion . Reinforced by the issuance, of PagBank CDs to fund the credit disbursements. Loans to deposit ratio was 62%, guaranteeing stamina to grow. Our credit portfolio in a healthy, and sustainable way. Moving to slide 11, we present our quarterly financial results.
In the top left, our consolidated net take rate reached 2.42%. 2 basis points higher in comparison to first quarter 2021, and 13 basis points versus fourth quarter 2020. Driven by better TPV mix with more credit, lower debit transactions, and helped by a larger PagBank revenue. In the top right graphic, we share our non-GAAP total costs, and expenses. Which totaled BRL 1.9 billion in the second quarter of 2021, up 87% year-over-year. Cost of sales, and services represented 67% of total costs and expenses. Increasing 63% year-over-year, at the same level of TPV growth. Driven by higher interchange, and card scheme fees. Higher depreciation, and amortization related to our solid active merchants a dditions. During the past quarters, and expenses to implement new products, and services.
Selling expenses rep,resented 26% of total costs and expenses. And increased 155% year-over-year due to the headcount. The expansion for Hubs, and PagBank teams. And higher marketing expenses for new campaigns. Financial services jumped from a share of 2% in second quarter of 2020, to 7% in the second quarter of 2021. Mainly, due to a TPV mix improvement, requiring additional working capital volumes, to prepare our merchants. On top of that, the increase of the Brazilian basic interest rate, and the exchange rate valuation. For international transactions for BoaCompra, also pushed the expenses up versus last year.
In the bottom left chart, the adjusted EBITDA went from BRL 384 million, in the second quarter of 2020. Excluding the benefit of BRL 84 million, related to a tax provision reversal last year. To an adjusted EBITDA of BRL 629 million this year. With a growth of 64% versus the same period of 2020. Finally, in the bottom right, we share our capital allocation. During the second quarter of this year, we invested almost BRL 407 million. Being 50% in POS acquisitions, and almost another 50% in R&D. To develop new products, features, and services. As a percentage of revenues, CapEx decreased 80 percentage points. Reaching 17% versus 25% in the second quarter of 2020. Moving to slide 12, the last one of this conference call.
As Dutra said in his initial remarks, the positive trends of the first semester. Led us to review our Acquiring TPV growth guidance. From above 40% to above 45% in 2021. We also project a reduction of, capital expenditures in BRL 200 million. Setting a new level of BRL 1.8 billion for this year, optimizing the cash flow generation. Now, we end our presentation, and we can start the Q&A session. Thank you. Operator, please.
Thank you. We'll now begin the question- and- answer session. To make a question, please press star one. To remove yourself from the queue, press star two. Our first question comes from Mariana Taddeo with UBS. Please, Mariana, go ahead.
Hi. Good evening, everyone. Thanks for the opportunity of asking a question. My question is related to net adds in the Acquiring space. In this quarter, it decelerates. Is there any impact of business mortality from COVID-19 one year ago, the second quarter last year? Could you also talk a bit on the competitive scenario, and your expectation for net adds going forward? Do you think that Pag will be able, to accelerate the pace of net adds again? Thank you.
Hi, Mariana. This is Ricardo, g ood to hear. Thank you for the question. Let's talk first about the net adds in Q2. We saw a increase in business mortality, from merchants in April 2020. As our active merchants metrics, considered at least one transaction in the last 12 months. The business that were closed or shut down in April 2020. They generate churn in April 2021. If you remember well, in Brazil, April 2020 was the worst month. In terms of the pandemic, and lockdowns. That's why we had a impact in churn, related to business mortality from one year ago. It's also worth to say that, these merchants they were not transacting since May 2020. We didn't have any TPV from them since then. It's the metric for the churn they impacted, TPV, we didn't have this TPV since May 2020.
That's why we saw this 236,000, which is a very decent number. It could be better if you didn't have this mortality from last year. Regarding the competitive scenario, what you see here. As we've been talking in past quarters, some of the acquirers, from the incumbents from the banks. They decided not to play in the long tail market anymore. Some of them, they were vocal saying they will not play. Some of them just increased the price by 5 x or things like that. It is a way not to work in this market. You don't say no, but you just increase the prices. It's a way for not to play anymore. We keep seeing some competition, from the same players that we had one year ago. Everyone knows about the natural competitor is Mercado Pago. We keep adding thousands of merchants every month.
We saw some of, our competitors increasing prices this week. Some of them increased the prepayment rates. Some of them made a different price for different card schemes. Mainly, the local card schemes such as Elo and Hipercard. We saw more rationality in pricing, not crazy movements. The scenario is similar, to what we had. In the past quarters or even better. We didn't give this year a guidance for net adds, but we keep talking to some of you. That we expect to have 1 million net adds in the year. We had more than 530 in the first semester. We keep saying it's feasible, to have this 1 million or even more. Let's see the following months, and then we can give you more color. The best information could be keep thinking, about 1 million net adds in this 2021.
That's good. Thank you.
Thank you.
Our next question comes from Craig Maurer with Autonomous Research. Please, Craig, go ahead.
Yeah. Hi, t hanks. The take rate in the quarter, held up better than my expectation. Can you talk about? You just addressed pricing in general, but can you talk about how we should think about that trend? As the SMB Hubs continue to grow, and that that will have a dilutive effect on take rate, I would imagine. Secondly, if you could talk about the progress in lending products. Specific to PagBank, and how that will drive take rate there? Just a last modeling question, how we should think about financial expense going forward? Thanks.
Hi, Craig, t his is Ricardo. Also good to hear, and thank you for the question. I'm going to start, and then Artur can help me here. Regarding take rates, we have these different moving parts. Or so to say, the tailwinds and the headwinds. The tailwind would be, if we had the consumption coming back. In Brazil, we are having a high inflation. Pandemic is still here. We are not 100% back in the office. People are not traveling. The consumption is not happening, because of COVID-19. And because of also the inflation that is kind of.
Preventing some consumption. That would be the tailwind. What you saw in this quarter, we already saw a slightly better net take rate in long tail. For instance, because the mix is getting better. In the headwind, which I would say it's not really a headwind, but in terms of take rate. It's because we are having better, performance in Hubs than we expected. We are exceeding our expectations. You know that our merchants from Hubs, they have usually 4x- 5x larger TPV than long tail, and of course they had a lower take rate. If you look at the percentage, it's going to be lower. But in absolute terms should be better, because they have a TPV. That's 5 x larger than the long tail.
That's why we talked, in the call before here. That we expect to be, flat or a little bit higher than that looking forward. A few basis points here, and there, let's see how it's going to be. The recovery here, and then we can give more information for you. Those are the moving parts that we have. Consumption that could be back and, on the other hand. We are increasing, and growing faster in our Hubs operations, to serve SMBs. Regarding the lending products, we've been working in these models for, let's say, three years. We learned a lot. We were supposed to have, an increase in disbursement last year. But because of COVID-19, we just decided to stop, not to give any credit. The same movement, that we saw other banks doing in Brazil. We are giving some credit again in this year.
The NPLs are under control. We see some of our merchants, having better TPV recovery. It will help our take rate. It could help our take rate, the lending. It is also worth to say that, I guess Artur can give more numbers here. But I'm going to finish, and Artur can complement, and talk about financial expenses. Worth to say, that we use here IFRS Nine. So, when you give some credit, we need to make the provision right at the beginning. To some extent, we are, let's say, making the provision. At the beginning, and then the results going to happen in the future. That's why, if we increase the credit. It could be even, let's say, not to help that much in short term. Because of this IFRS Nine, that we follow here. About financial expenses, I guess Artur can also help us.
Thank you.
Okay. Craig, thank you for your question. Good talk to you again. Regarding to our financial expenses, the two big impacts in this quarter. Was related to the TPV growth, that is higher than our expectation. And also impacting a larger working capital needs, related to the advances, of receivables to our clients. Also, the increasing of Brazilian basic interest rate. That is increasing the cost of PagBank CDs, and also the advances of receivables with bank issuers. Going forward, we expect that the basic interest rate, will achieve 7% in the end of this year. Obviously, we will increase our expenses. What I can tell you is that Q3, will be higher than Q2, and Q4 will be higher than Q3.
We are following very close, what the market is doing related to that. Because we can adjust the prices for SMB, and larger clients. That is used to have the prices paid to this, a relation to this basic interest rate. Also for long tail, as Dutra said, some players in the market increased the prices. We don't have this plan for now. But we are very close, to this movement in the market. And we'll take an action if necessary.
Thank you very much, guys. Appreciate it.
Thank you, Craig. Take care.
You too.
Our next question comes from Mario Pierry with Bank of America. Please, Mario, go ahead.
Good afternoon, everybody. Congratulations on your results. Let me ask you two questions as well. The first one is on your credit portfolio. As you just talked about, last year you were being cautious. Now you're accelerating lending, at a time that we're hearing from some of your peers. That they're having problems, with the credit product. Because of problems at the chambers of receivables. What makes you comfortable to start accelerating your credit growth now? And why aren't you having the same problems as some of your peers? The second question, is about your appetite for inorganic growth. About a month ago, there was some news or some rumors. That you were interested in making an acquisition for BV. If you could, you know, tell us a little bit about. What happened? What is the strategy? How do you look at inorganic opportunities?
Thank you.
Hey, Mario, it's Artur speaking. Thank you for your two questions. I will take the first one related to credit portfolio. After this, Dutra will continue with the inorganic question. As Dutra said, last year, and you mentioned too. Last year we stopped our operations. Related to the pandemic, and the crisis that we have in the world. This year, what encouraged us to disburse more than last year. Was related to the NPL cohorts, that are improving every time. Now we have three years of experience, a more sophisticated credit models. Those models does not taking care of the Chamber of Receivables, okay? We are not considering, the Chamber of Receivables helping us to collect. I would say that our models need to work, without the Chamber of Receivables.
Obviously, we know that the Chamber could help us, k now the credit products. But we are not considering at this point, okay?
Mario, regarding the rumors that you mentioned. We made this communication in the same day, I here confirm. That there is no intent to acquire, a big bank or BV bank to name here. There are no related signing agreements to do so. We reinforce that, during the call here. We do talk to many players in the market. We need to be aware of, what's going on in the market? It's my duty to be here to understand, what's going on in our fintech environment? Of course, we cannot follow everything. The big deals or the hot deals. They came to us through advisor or people, just get in contact with us. To talk about opportunities, and we need to talk. Understand what's being sold? What's the price, and so on.
We did talk to many players, but it was a rumor nothing more than that. Our mind for inorganic growth is to look for targets. That can speed up our initiatives here, our ecosystem. Just to give some examples, we bought Yamí, and Moip in the online payments. We bought Biva, and BoletoFlex for a faster deployment for credit. We bought R2TECH, and NETPOS, and Zygo for software features. To ecosystem, and things like that. That's why, we usually look for. I would say to you that every week. There is a sub-acquirer coming to us, trying to sell volumes. We don't buy volumes. We know that it's a niche. At some point, the sub-acquirers need to be, let's say, consolidated or they will consolidate. With someone else or with another sub-acquirer.
We had this opportunity, to buy volumes. And we don't have that in mind, because at some point the price is not competitive. The main idea here is to speed up our ecosystem, and to have the same culture. Because you know better than me. You know out of 10 M&As, at least eight of them don't go well. Because of the day after. We need to be very careful, w hat we are Acquiring? And if the culture there's going to be fit, and it's going to be easy to integrate. And have a better services for our clients. That's what we have in mind here. To have let's say companies, to speed up our ecosystem.
Very clear, guys. Thank you.
Thank you, Mario.
Our next question comes from Jorge Kuri with Morgan Stanley. Please, Jorge, go ahead.
Hi, good afternoon, everyone, and congrats on the numbers. Great results. I have two questions, please. The first one is on your CapEx guidance, that is a tad lower. I know it's not a lot, but it is lower. I'm wondering if, what should we read into it? Could we maybe start to think, that expense growth is going to slow down as well. Given that you already have built, enough of the infrastructure for the new businesses. Or is this just related to POSs? My second question, sorry to go back to this. But I wanted to understand a little bit better that. The answer to the receivables chamber. What does it mean, that your underwriting models don't consider that? I mean, don't you need to make sure that, credit card receivables are not being used. As a guarantee elsewhere for you to leverage them.
I'm just trying to understand exactly, what the comment from Artur was? Thank you.
Hi, Jorge. This is Ricardo, g ood to hear you. Thank you for the question. I will start with the Chamber of Receivables, and Artur can come back, and talk about the CapEx. I guess, what Artur was trying to say is that, our model. When you look to our models, we consider, the behavior we have with our clients with us. The way they behave with us, and the transaction history that you have from them. How much they sell, if they are growing or not? What is the mix, and so on? Today, as the Chamber of Receivables is not 100% working. It's not even possible for us to go there, and look. If this merchant is making transactions, in another acquirer. Or if they have some, other players that are serving them.
That's why, when Artur said it's just like? We are looking for the behavior, that you have in our database. There was no Chamber of Receivables until June, and we keep collecting these clients. That's why the Chamber of Receivables is going to be, an additional way to collect. But we don't count only on Chamber of Receivables to, let's say. To collect the money from the lending or for the working capital loans. That we offer for our clients. I would just take advantage of your question. Just to give an overview, about the Chamber of Receivables. It's a complex project. You know that Central Bank, and all the industry is working hard to make it work.
Although it's not 100%, we've seen lots of progress in the past weeks. It's going to work, let's say, in the next weeks. Because there is some integration, that is happening between the registrars, and so on. We do believe, that it's going to be very good for credit. We see an opportunity there, because today we have 9% market share in the Acquiring business. There's 90%, 91% that is making transactions. Through other players that we can go there, and even offer credit. Through a very effective way, to collect if the Chamber of Receivables is working 100%. I guess, what Artur was trying to say that? Today, we don't go there to see if the merchant is using another player. And we don't consider, that to collect the money. As today, we are not using the Chamber of receivables, because it's not working 100%.
I don't know if it's not clear, just let me know.
No, that's clear. T hank you. Thanks, Ricardo.
Okay. Thank you, Jorge, for your question. Related to CapEx, and good to talk to you again too. What we consider for our CapEx? Is that, we will support the growth of the company for the future. There is two big points inside the CapEx. One is POS, and the other is R&D. Both we consider to support the growth of the company. We changed the guidance to BRL 1.8 billion, because now we have a better view of the year. Compared to, what we projected in the beginning of this year? We have a lower currency rate right now, versus also what we projected. Related to mix of clients, changes are a little bit versus, what we projected too? We are always looking forward to be more, efficient in the investments that we do in the company.
Now we can say, that BRL 1.8 billion is more fair for this year. Also, as the last point is related to the expenses. That we don't have any relevant change for now. If we have any movement in terms of expenses, depreciation, or amortization. We will communicate to the market.
Great. Thank you, Artur, and congrats again to everyone. Thank you.
Thank you, Jorge.
Our next question comes from Bryan Keane with Deutsche Bank. Please, Bryan, go ahead.
Hi, guys. Solid results here. Two questions, if I may. On the Hub strategy, it sounds like it's coming in better than anticipated. Wondering about the volume trends. I think last quarter you indicated, maybe the top end of the range of 6%-11%. Given the growth in the Hub strategy. Does that still hold? Are we now maybe even going to push, above that range for 2021 volumes? Secondly, the net income margin was 14.6% I think in the quarter. I know you're making a lot of investments in the business. I'm trying to figure out going forward. Should we be at, or a little bit below that margin level or any guidance on that? Thanks so much.
Hi, Bryan, t his is Ricardo. Thank you for the question. Good to hear you. Regarding Hubs, you're right. We are exceeding our expectations in terms of volumes. In terms of the performance, even the production of the people, the salespeople in the street. It's getting better, than what we had in our assumptions. It will be probably higher than 11%. That's something that will surpass this 11%. It's a combination of the execution we are having here. Better efficiency in sales force, and probably will be higher than that. We are in half of the year. It's hard to give you the number right now, but it seems going to be higher than the 11%. The top of the range, which is good news. We were, let's say, conservative when we thought about the volumes from Hubs, and we're going to get more.
We saw that even the SMBs in Brazil are underserved. The majority of our SMBs, not to say 100%, they already have another player. It's different than long tail, that we are bringing new merchants to the system. In the SMBs, we need to go there to talk, and to get clients from competitors. We use a lot the strategy to talk about PagBank. The digital bank, that is 100% free. And they can use for daily tasks, financial daily activities. Such as paying suppliers, and so on. We are being successful there. Going back to your question, it will be probably higher than 11%.
Hi Bryan, Artur speaking. Good to talk to you, and thank you for your question. Regarding to net income margin, as we have been sharing in the last calls. We are not obsessed by margin right now. Our focus is continuing to deliver healthy, and positive nominal results. That means positive nominal results for adjusted EBITDA, and net income. Our intention is to create a larger company for the future, and 2022, 2023 increase our margins. Regarding to the next quarters, I can say that. We expect a slight improvement versus Q2. Q3 probably will be better than Q2, Q4 better than Q3. And for the full year, we are expecting something above 15%.
Also excluding interchange, and fees from the schemes. Our net income margin should be above 23%, or something above 23%.
Just to be clear here, Bryan, Artur is saying that the net income margin. As we are reporting, is going to be higher than 15% this year. It's going to be better in Q3, Q4. When he talks about 23%, when you use the same methodologies of other players? That they discount interchange, and card scheme fees from net revenues. That's going to be close to 20%-24%. If we exclude interchange, and card scheme fees from the revenues.
Got it. Thanks again, and congrats.
Thank you, Bryan.
Thank you.
Our next question comes from Marco Calvi with Itaú BBA. Please, Marco, go ahead.
Hi, good evening. Two questions here. The first one on the Acquiring's net take rate of 2.24%, that you guys disclosed during this quarter. We saw a growth quarter-over-quarter. Or a flattish quarter-over-quarter, and a growth over the fourth quarter. Can you guys share with us, the trends of this Acquiring net take rate. Given that you guys are moving towards a larger client, and even so. At least comparing to the last two quarters, the net take rate on the Acquiring business. Either stayed flattish or increased? My second question is on your software business. You guys mentioned that, you guys ended the quarter with roughly 100,000 clients. And a penetration close to 11% of the active merchants. I was just wondering, what sort of software are you referring to? And if you can, share the average ticket specifically on the software product.
Thank you, guys.
Hi, Marco, this is Ricardo. Thank you for the question. Good to hear you. Regarding net take rate in the Acquiring business. As you could see in Q4, we have 2.06%, then 2.23% in Q1, 2.24% in Q2. Looking forward, we see at least two big moving parts here, or the headwinds or tailwinds. The tailwind, we see the better consumption. Or increasing consumption in the country. You know we are having high inflation. Unemployment is still here. Pandemic is still here. We're not 100% back to our normal lives, that's the tailwinds. The people start consumption more, getting some business trips. Or even the trips with the family, and so on. That's the tailwind. In the headwind, in terms of take rate, is because we're having better performance in the Hubs. We are changing the mix of our TPV.
The Hub describes, they have TPV 4x- 5 x larger than the long tail. When you bring this larger merchant, the SMB, they impact net take rate. In absolute terms, it's a good business. Because the volume is much higher, than the long tail. Even with a lower net take rate. If you look specifically, net take rate, we have this headwind. That's why, we prefer to say that it's going to be flattish looking forward. There are these two moving parts. The one is the consumption is going to help the net take rate. The headwind is the performance of the Hub is going to, let's say, decrease the net take rate.
Regarding the software business, we consider here usually the point-of-sale. That people can go there, use for managing their businesses at the end of the day. Take some reports, such as how many coffees did I sell? How much they sell through cards? Through debit cards, credit cards, and cash. Usually a small, let's say, software that helps people to manage their businesses better. We also consider here R2TECH, our reconciliation business. That some of the clients use to make this match. Between the sales, and the money that goes to their bank accounts. At the end of the day, they can see. How much they sold, and if the money is coming to their bank account? Those are the two main software.
We also have some other software, that smaller merchants using Minizinha. And to make this point-of-sale to work, the example that I gave about the reports. Usually, we don't charge for software. They're very simple. They don't require implementation. They don't require someone, to go there to install anything. We don't sell licenses. You just need to download the app, and next, next, few clicks, you can use the software. Usually, we don't charge for the software. We see that as a way, to give a better service for the client. Increase their loyalty, and keep them working with our Acquiring solution for a longer time.
Great. Thank you.
Thank you, Marco.
Our next question comes from Eduardo Rosman with BTG. Please, Eduardo, go ahead.
Hi, everyone. Congrats on the numbers. Two questions here. We just saw SEBRAE publishing a survey, saying that. More than 50% of small merchants in Brazil, they're still not accepting cards. Just want to get your feedback on the ground. What can we expect, like an idea for maybe next year? If you think adding 300,000 merchants per quarter is still doable. If you think, you can grow more than 30% TPV. In the Acquiring segment still for another couple of years. It would be interesting to see, and just have a qualitative view. About what to expect for the coming years on your segment? The second one is on PagBank. You mentioned, that you expect breakeven to come in the next few quarters. EBITDA was still kind of BRL 100 million negative this quarter. Can you elaborate?
You have a, should we expect that, you know. To break even the second part of next year, 2023? That's it. Thanks a lot.
Hi, Rosman. Thank you for the question. Good to hear. Regarding the SEBRAE survey, you're right. They said many businesses in Brazil, the small businesses don't accept cards yet. I would say, there are no other companies in our industry more prepared to. Let's say, to take advantage of that or to surf this wave. With all the history, that you have. The expertise that you have to serve long tails. Distribution channels to average UOL audience, and all the ecosystem. That we have been building all these years, all these quarters. That's why, we keep adding 1 million net adds per year. That's what I expect to keep adding in the following quarters? There's still many opportunities out there. I would say, that we are the company more prepared to serve those. That are out of the financial system.
We've been doing that, since 2006 in the online world. And since 2012 with the POS. You're right, it's a great information. Just reinforce, what we've been saying for many quarters? That there's still many businesses in Brazil, that don't accept cards. Some of these merchants, they start accept debit, and then. After a while, they start accept credit. We see it as an opportunity, and the survey from SEBRAE just reinforce our view. Regarding PagBank, I'll just introduce, and Artur can help me here. But you're right, the margin in absolute terms increased. But, as a percentage of the revenues, we decreased it from 80% to 55%. The business is growing. We need to dilute fixed costs, we keep investing in the business. That's why to some extent, t he absolute terms. The absolute numbers are growing here.
Artur, can you just complement here?
I will say, just more words related to PagBank. PagBank is a long-term project to us. We are succeeding, because we are adding millions of clients every month, every quarter. We are monetizing those clients. It's true that for consumers, normally consumers take more time to start to monetize. It's true, because the cash-in is not automatically. This is the biggest advantage that we have, in terms of merchants using PagBank. Because we have the caching automatically. As Dutra said, we are at the moment to invest a lot in the ecosystem. To have a more complete, offer of products in terms of PagBank. We are investing people, marketing campaigns, R&D, and everything. That's necessary to have a big digital bank in the future.
Hey, Rosman, t his is Eric. Thanks for the question. I'd just like to highlight here that, we don't have two CEOs. One for payments, one for banking. We have one CEO, one CFO taking all the decisions here. To maximize revenues per client. There's no conflict of interest, and we are traveling here. To increase revenues per user, and see the profitability better for the coming years.
Great. Thanks a lot.
Thank you, Rosman.
Thank you.
Our next question comes from James Friedman with Susquehanna. Please, James, go ahead.
Hi. Let me echo the congratulations. I'm glad to hear everyone's doing well. It's Jamie at Susquehanna. I just wanted to ask a couple of questions up front. The TPV per merchant continued to expand, right? Your TPV grew double the merchant growth roughly. Is that the Hubs or is that the COVID or something else? That's the first one. Historically, you've had some seasonality. Well, the industry has seen seasonality in the Q3. I wanted to ask about that. Do you expect any promotions, in the Q3 at an industry level? Because sometimes we see that at the Black Friday. That was the second one. The third one is, what are you going to talk about at Analyst Day?
Hi, James. Can you repeat just the last one? I'm sorry. It's because.
Oh, what are you going to talk, about at the Analyst Day?
Okay. Well, regarding, I'll start with the TPV promotion. We saw this Q2, of course, is an easy comp, James. Just to be clear here, guys, around the world. That was the worst quarter in terms of COVID, and lockdowns. And impact of the economy around the world. In Brazil was no different. The worst month for us last year was April 2020. Of course, we had impacts from COVID all over. Second quarter was the worst one. When we compare, we are growing a lot. Part of this growth is coming from every business that we have here, from different clients' size. The majority of the growth is coming from Hubs. We gave some information here. The Hubs TPV quarter-over-quarter grew 4 x. The company as a whole grew 89%.
The long tail also grew strongly, steadily. But not the same levels, that you saw in the Hub. Just going back to your question to be clear here. The TPV promotion increase, can be more explained. Because of the Hubs that help it. Because those are the guys that with more volumes, and improved 4 x year-over-year. Regarding Q3 seasonality, we don't think there's going to be any. Let's say, impact from the industry here. No big promotions we have in mind or so on. I'll just take advantage here. We plan to have a new marketing campaign, from PagBank in the following days. We see the opportunity here, that we have this window of opportunity to grow PagBank. We grew 2.1 million new clients in Q2.
We see the opportunity, to keep growing strong in Q3. We will start a new marketing campaign in the following days. Regarding the Analyst Day, the idea here is to have a meeting in November. We don't have still the details. We still have to decide the specific date. There's going to be a meeting with Luiz Frias. Our Chairman, and the Founder of the company, and some of the Pag senior management team. To give a more overview about we have in mind. What we see the future for our industry? What is going on in Brazil in terms of in financial marketing, in Fintech arena. To be more close to the investors, and of course. Share our ideas, and our future plans to many of you. That's the idea.
Great. Thank you.
Our next question comes from Tito Labarta with Goldman Sachs. Please, Tito, go ahead.
Hi. Good evening. Thanks for the call, and taking my question as well. A couple questions also. I guess, to go back on your margin, and sorry to harp on this point. Just want to make sure I understand, because if we look at your margin last year, it was 20%. I remember on the Q4 call, you mentioned if you take out COVID-19, and PagBank, your margin would have been 30%. Now you're roughly half of that, and your PagBank margin has improved. Is this mostly, because of the growth in the Hubs? I just wanted to understand the decline, and kind of what's driving that. Particularly, if PagBank is improving. I'll ask the second question.
Tito, it's Artur speaking. Thanks for your question, good to talk to you. Regarding to margin, all the things that you mentioned is right. And the impact of, what we are seeing today is related to Hubs? Because it's an operation that is not mature. Also, the investments that we are doing for PagBank. When we have a more stable company in the future? A larger company, we will leverage those investments. That we are doing right now. The expectation that we have today, is the margin grow again.
Okay. Thanks.
Go ahead, Tito.
No, I was just going to say, but your PagBank margin is improving, right? I get you're still investing, but revenues growing faster. Just to understand, the pressure on the margin. Wouldn't be coming from PagBank compared to last year, right? Is it more just the Hubs?
It's Hubs, and PagBank, as I said.
Remember also, Tito Labarta, this is Eric speaking. Higher depreciation amortization given that we had, BRL 2 billion in capital expenditures last year. Being BRL 1.5 billion of that related to POS acquisition. This year, remember, the previous guidance considered BRL 2 billion in capital expenditures for 2021. Artur just reviewed this information to BRL 1.8 billion, so higher depreciation amortization. Higher financial expenses, given the rising of interest rates. This is why we saw these impacts? Remember, if you remember in Q1. We had the digital account losses too, that impacted for the full year numbers. That we already sold this, okay? Basically, these are the reasons. Why we saw this impact in the short term.
Okay, perfect. Thank you, t hat's helpful. My second question, you mentioned earlier Boa Compra, and growing cross-border transactions as well. Is that something, that is significant for you? Do you see a lot of growth potential in that? Just kind of curious on that opportunity for you.
Well, Tito, to be sincere, it's a small part of our TPV. It is growing very fast. It's a small part of our TPV. We already had this company for a few years now. Some of the clients, the online clients. They ask us to serve them in other countries of Latin America. Then we use Boa Compra to serve them. It's something that we are always looking for the opportunity here. We know there is some countries, that are more developed in terms of cards industry than others. We keep looking to that, it's hard to compete with the opportunity that we have in Brazil. We are number one in terms of clients here. We have PagBank, we have UOL. We keep evaluating if there are some opportunities in other countries. To be sincere, it's a small part of our TPV. It helps.
It is important to serve some clients. At this point, it's not something that. Let's say, P&L transformation to be clear here.
Okay, great. That's helpful. Thank you very much, and congratulations on the result.
Thank you very much, Tito.
Our next question comes from Domingos Falavina with JP Morgan. Please, Domingos, go ahead.
Thank you. Hi, guys. Good evening, everyone. Also, thanks for taking the call. I just wanted to bounce off ideas, and get your point of view. As well on the debit side of the operation. Basically, ABECS, the card association. Put out the industry-wide figures, just not too long ago. What we saw is basically debit accelerating? It's really hard to exclude the COVID year, obviously. If we compare versus 2019, and see an average of CAGR 2019 over 2021, o r I should say 2021 over 2019. You know, April, May, and June actually accelerated. Even above credit card rate, 19%-20% year-over-year. Which given Pix, it came across as a surprise. When we look at the market share, we did see. Obviously, I think you guys mentioned that a lot. That it hurt you, the market share of credit.
It used to be in 2019, and before 63%, it came down to 59%. In this year is striking around 61% credit, and the rest being debit and prepaid. My question to you is, what else can you share? How are you seeing those debit volumes? How are you seeing Pix? And do you have any guess on, what's Pix substituting? And what you're seeing in your base? Congrats on the result as well.
Thank you, Domingos. Good to hear, t his is Ricardo. Well, let's start with Pix. We have the option for all our devices. We have 7.6 million merchants, active merchants. On average, we have more than one device per merchant. So, we have easily more than 7.6 million POS in the streets. All of them accept Pix. We see the penetration of Pix in our Acquiring business very, very small. We know there might be some merchants here, and there. Try to use Pix to avoid MDRs, but if you think that debit MDR is only 1.99%. It's so small that at some point. It's easy for the merchant even to accept debit, if they need to pay 1.99%. They know it's safe. They know the money is going to come, to PagBank account right after transaction. We don't see Pix penetrating our base.
We don't see Pix increasing the churn of the company. We do see Pix replacing TED, wire transfers. For those who are not familiar, with the names in Brazil. Because for obvious reasons, it works 24 hours a day, seven days a week. It's automatic. We see Pix, let's say, replacing wire transfers. In terms of debit, I know the debit growth. Has been strong, during all these years, and I would say that part of that is. Because also the people getting into the financial system. Our guess here is that debit is replacing cash. There is a lot of the economy in Brazil, that is still based in cash, and people are getting. Let's say, digital accounts, getting new cards. We saw this accelerating the pandemic. People that could not go to the banks, to withdraw money in ATMs.
They could not go to agency branches, because they were closed. Many millions of people opened their accounts. There are more, let's say, a larger base of debit cards throughout the country. That's our guess here. There is this secular, shift here happening in Brazil. From cash to cards that is still happening. It's different than other economies, that more developed people. Have this culture to have cards, and to use cards. But again, in Brazil, you have lots of the people still using cash. That's why, we have this strong tailwind for the industry as a whole. If you consider the whole industry, it grows 52% year-over-year. I know it's an easy comp from COVID, but anyway. It's 52% is a strong number. We grew 89%. I don't know if I answered your question here.
No, you did, especially when you said you're not seeing big Pix penetration. Just out of curiosity, when you say this total TPV on the acquirer side? Is that including or not including Pix?
It includes, but it's very, very small. Very small, Domingos. If we exclude, it's going to be probably the same 89%.
All right. I appreciate it, guys. Thank you.
Okay, thank you.
Our next question comes from Neha Agarwala with HSBC. Please, Neha, go ahead.
Hi. Thank you for taking my question. This is Neha Agarwala from HSBC. Congratulations on the results. I wanted to dig a bit on the PagBank revenues. Last quarter was depressed, due to the chargebacks from the digital account losses. This quarter, there was a small improvement. Not as strong, as what we saw in the fourth quarter of 2020. Could you explain a bit more, what was the composition of the PagBank revenues? How do you see it accelerating in the coming quarters now? That you are pumping up the growth of the credit book. Should we expect, an accelerated growth in the PagBank revenues. A bit more color on that. My second question is on the chargebacks.
If we look at the chargeback numbers, that you have in the costs. It picked up a lot in the first quarter of 2020, up 2021. Which was due to the digital account losses? It has gone down in the second quarter, but it still seems elevated versus the last quarter. If I understand, I think it's related to the credit book. Could you talk a bit more about that. Why the chargebacks are still a bit elevated versus same quarter last year? Thank you so much.
Hi, Neha. Thank you for the question. Good to hear you. This is Ricardo. I'm going to talk about PagBank revenues, and then Artur can give you more color about chargebacks. You're right about the credit boost here. The PagBank revenues, as you said, it is growing. Remember we added 2.1 million clients in this quarter, and the majority of these clients are consumers. What I mean by consumers, they don't have the automatic cash-in. Just like we have with the merchants. Because the merchants, when they have a sale in the POS. The money goes straight to the digital account, and they can make transactions there. They can use some services, in the digital account that we can monetize. Consumers take a while, to put the money there. And it takes a while, to start generating revenue.
We've been saying that, there's some lag between the client comes to PagBank, and starts to generate revenues. It is increasing, the revenues. That is true. We also made some promotions for some clients. Just to give an example, we have some withdrawal fees. If people go to ATM to withdraw the money. We have some fees that we charge. For some of the clients, we decided not to charge. In exchange to have more engagement from them. We made some research. Some of the clients, that we use here. They also use another bank, because of that. We decided to take it out, this charge. That's why we, at the end of the day, for some clients. We are exchanging short-term revenues for a higher engagement. And a longer-term relationship. It's growing. It's fine with us, the level that we have.
Acquire is growing fast as well. We are very happy, what we had in the country in this quarter, with the PagBank revenues? I'll pass the word to Artur, to talk to you about chargebacks.
Neha, it's Artur speaking. Thank you for your question. Good to talk to you. Related to chargeback, as we said last conference call. It's important to mention that, we did not have the same issues of Q1 2021. For digital losses, as we presented in the first quarter of this year. Also, in the Q2, when we compare to Q1 excluding digital losses. The chargeback over Acquiring TPV grew 6 basis points, okay? Due to more online transactions. That naturally, brings more chargebacks. And the growth of credit portfolio, as Dutra said. Related to credit portfolio, since we use IFRS Nine. The highest accounting standard procedures, for delinquency provisions. We book 12 months, of write-off in the first month of the cohort. That will present a new dynamic for our chargeback. As a percentage of Acquiring TPV going forward.
If we compare the credit portfolio, that grew 42% quarter-over-quarter, our TPV grew at 12%. This is the reason, that increased the chargeback as a percentage of the TPV. It's provisions at the end of the day, Neha. Provisions following the IFRS Nine rule.
Understood. Thank you so much, and congratulations once again.
Thank you very much, Neha.
Our next question comes from David Togut with Evercore ISI. Please, David, go ahead.
Good evening, and thanks for taking my question. This is Spencer Kennedy on for David Togut. Great to see, the continued strong momentum in the PagBank ecosystem. I wanted to better understand the monetization differences. Between your consumer, and merchant clients. You now have around 82% of your merchants as PagBank clients. Which implies the future client additions, will predominantly come from new consumers? Any stark differences between these two groups? Relating to credit, and interchange revenue or product usage? Thanks a lot.
Hi, David. Thank you for the question. What you see here is just in terms of dynamics is. Because when you are a merchant, and you use our POS. You already receive the POS in your cash card. Once we start making transactions, the money goes to your digital account. And you can have the cards in your hands. You start using, you start buying stuff. You start withdrawing money. We start generating revenues, because it's a closed loop, so to say. Because the money goes from the POS, to your digital account. You have the cards in your hand. So, it's very easy for you to use, and to generate revenues. When you are a consumer, and you ask for a card. Of course, we need to make some KYC checks here.
We are probably, the fastest company in terms of sending you the card in Brazil. It takes a while for you to send the money, and to start using. Usually, let's say, if you work in Brazil, you receive twice a month. The money doesn't go straight in the day, that you receive the card. You open your app, look at the balance. It's zero. There is nothing to do there. We cannot generate any revenue. We need to wait for you to put the money there, we start monetizing. Usually the consumers, they have a lower average cash-in. When compared with merchants, because the merchants, the cash-in is automatic. What you see here, is that it's just a lag of time. Between you opening the account, to start generate revenues.
Today, the main difference is that we don't offer.
Credit products or products, with credit risk for consumers. We only offer working capital loans, and credit cards for merchants. The consumers that we offer credit cards. We only offer if they have a collateral, if they make the salary portability here, or if they invest in a CD. If you don't pay us, we have this as a collateral. We have your salary or your CD. Usually, that's also another difference between generate revenues, b etween consumer, and merchants. We will start to generate some credit products, for consumers in the following weeks. We launched yesterday, the overdraft loans. Which is a very well-known product around the world, and also in Brazil. It's small tickets, it's small risk, good interest rate. We will start offering overdraft for consumers. We will also start making some pilots, and credit cards.
Once the consumers become more, and more important in PagBank. We expect to be able, to monetize them accordingly as well. That's the difference. We are building this company or building this ecosystem. With consumers, and merchants in parallel. You're right, it takes a little bit more to generate revenues from consumers.
Okay, got it. As my follow-up, I just wanted to better understand. The 2.1 million client additions, and just thinking through the sustainability of those additions. Because historically, you guys have talked about 1 million. New client adds per quarter, is kind of, how we should think about that? Are the factors that drove that this quarter, are those sustainable?
David, it's hard to give you this information, as going to be 2 million again. We'd rather say that we keep with our, let's say. Soft guidance between 1 million and 1.4 million per quarter. If we see the opportunity, to accelerate some niches. That we can make some partnerships, we can find thousands of clients, we will do it. It was exceptional Q2 for us. We saw some marketing channels working better, than we used to be. We made some new campaigns, that are working very well. Our product also getting more mature. People understood that. We would rather say there's going to be more than 1 million in Q3. Let's see. If we have more color on that, we can update you.
Okay, great. Thanks very much.
Thank you.
Our next question comes from Jeff Cantwell with Guggenheim Securities. Please, Jeff, go ahead.
Hi, can you hear me?
Yes.
Okay. Congrats on the results. Thanks for taking my question. Most of them have been asked. I thought a slide four of the presentation, has that interesting chart in the upper left corner. There is a clear progression there, which shows that you are clearly gaining market share, and Acquiring? Your shares increased by 250 basis points over the past year, and 200 basis points over the past two years. Ricardo, can you talk a little more about, what is driven that? Can you think back, and talk about where those share gains have come from? Why they come about? What you are seeing out of the market, that is different about PagSeguro? The crux of my question, as we look back at the strategy, and the execution of the company. What is really driven those share gains, in your opinion? Is it the PagSeguro approach to distribution?
Is it the product itself, the strength of the ecosystem? Where do you believe those share gains are coming from? Meaning, new businesses, competitive wins. Any kind of detail there would be very useful to hear about. What you've seen occur, as you gain share over these past two years? Thank you.
Hi, Jeff. Thank you for the question. You're right. We grew from 7.2% to 9.2% in one year. Part of the explanation here, of course, is because we started the Hubs, and we keep growing in long tail. As I said before, when we go to a Hub approach for an SMB? The majority of them, not to say 100% already, accept cards with another player. We see many, many SMBs unsatisfied or not satisfied. With their current provider, with their current player. We try not to go there, and just bid on price. Because that's not the smartest way, to gain these clients. We try to use PagBank as a differentiator. It is working. Of course, you need to negotiate. That's why we have the Hubs? Because if we were not able to negotiate. Just people could come here, and buy our POS through the website.
We know, that SMBs have better take rates. Than those that we offer in the website. That's the main idea, to talk to the right person, to the owner of the business, and get the deal done. We try, as I said, we try not to compete with price. We use PagBank as a competitive advantage here. There is no conflict of interest. We are under the same umbrella, the same parent company. We have the same targets. We are everyone looking for the same direction here. I don't have here in the top of my mind, to say you from this 2 percentage points. How much it was from new business, that we got in long tail? And how much from the Hubs? We can get this information later. Regarding our second question, I would say you here we are very hands-on company.
We try not to have distractions, and to make the best for our clients. I guess that's our DNA. That's what everyone here is committed to. We have a very committed team, looking for the best for the clients. We don't do things just, because we think it's cool. Or because we think that the market will like it. We will do things that really the clients will like it. We'll deepen relationship with PagSeguro, PagBank, and so on. We do believe, that technology also is a tool that you need to use. What brought us, since 2006 until today, the technology. The way that we have here to scale the solutions. The cost to serve going down as time passes by. That's why we believe.
To make the best for the clients using technology, and be hands-on. Taking very attention to details, because at the end of the day. These clients, they need to be very well served. Otherwise, they can move to another player. That's why, we try to do lots of focus on execution here. I would say, there is no secret sauce here. Just working hard every day, and taking attention details. Using technology in the best for the clients.
Okay, that's great color. Then separately, I want to ask you in PagBank, you're touching on this a bit. Can you talk a little more about your efforts right now? To get more PagBank cards into the hands of your users, and get them active? We can see that the 4x increase in cards, on slide nine over the past two years. You're now at 405,000. So, when we think about that 11.2 million active user base. The obvious question for us is, how many of them need cards? How many of them are potentially customers using PagBank cards? So how much further expansion, should we expect to see from that 405,000? Could you give us any thoughts there about execution, and the strategy? And how to continue to bring that number forward, within your customer base? Thanks.
Yes, Jeff. Well, when someone comes here to open an account, we din't know. I mean it's hard from the beginning, if they're going to be a good client. With lots of money coming to the digital account. Or if they will not put a lot of money here, if they're heavy user or not. We try to get some data from the market. We try to get some data, that we have here inside the company. To try to make the best offer for these clients. At the end of the day, I'll tell you that. The main, most used feature in our account, i s the wire transfers, and second is the cards. Those are the two tools, the clients have to move the money.
That's what they use more. Of course, they pay bills and so on. But the wire transfers to send money, from one account to another one. And also, the cards make purchase, and to withdraw the money. Those are the two most used features. If the client asks for a card, and they don't use it. We have a communication process here to send promotions. To make some incentives for them to activate the card, and to use the card. Our goal here is to have 100% of our clients using the cards, those that receive the card. It's key for us. It's key to make, the people to use PagBank as the main bank. We are not the main bank, for the majority of the clients at this point.
It's a decent percentage of our clients, say they use PagBank as their main bank. And it is getting better month after month. We are developing new features. We are putting new features in the account. So that people can use us as the main bank. The goal here is to have more, and more people using the cards. And see this TPV from cards increasing. It is still today linked with the TPV from the Acquiring. Because the majority of the cashing is coming from the Acquiring. If the Acquiring comes up, usually the TPV from card also goes up. When you have this Acquiring coming down, what we had in Q1. Because of seasonality, we saw also the TPV from cards with the same trend. Because the majority of the cashing is from the merchants.
Going back to your question, the idea here is to have. I would say, 100% of our clients using the cash card. We will start offering credit cards, for some consumers as a pilot, as I mentioned before. We will start, so it's hard to say how it's going to be the performance. We can, again, give you more color in the following quarters, the following calls.
Got it. Appreciate all that color. Thanks. Congrats on the results.
Thank you very much, Jeff. Take care.
That concludes our question-and-answer session for today. I would now like to turn the floor over, to Mr. Ricardo Dutra for final remarks. Please, Mr. Dutra, go ahead.
Hi, everyone. Thank you very much for the time. Thank you for the questions. Thank you for all the support through all these quarters. I hope to talk to you soon in person. For some of them, that we don't meet in person. We can talk in the next conference call next quarter. Thank you very much.
The PagBank PagSeguro's conference call is now over. Thank you for your participation. Have a great night, and you may now disconnect.