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MercadoLibre pursues banking licence in Mexico

Wednesday 22 May 2024 14:06 CET | News

Ecommerce retailer and fintech firm MercadoLibre has initiated talks with relevant authorities to obtain a banking licence in Mexico.

 

The potential for expansion is notable, as evidenced by the considerable advancement in banking accessibility, electronic payments, and credit use observed in Brazil over the past decade. MercadoLibre aims to actively contribute to this progression within Mexico by introducing additional products. The licencing procedure is anticipated to span from 12 to 24 months, and even though the company contemplated acquiring a banking license, it ultimately opted against this route. 

Mexico has emerged as a pivotal market for startups in the financial services sector, with less than half of the population possessing bank accounts. Numerous fintech enterprises are pursuing banking licences to offer a comprehensive array of services. Notable instances include Argentina’s Ualá acquiring a licence through the acquisition of ABC Capital, UK-based Revolut securing a licence in April, and Brazil’s Nubank formally applying for one. Additionally, four local companies are in the process of obtaining licences at the time of writing. 

MercadoLibre operates in Mexico under an IFPE fintech licence, enabling the provision of various services, including a wallet app. A banking licence would offer the company the ability to accept payroll deposits, remove limits on held amounts, and streamline the approval and issuance processes for credit cards. 

The simplification of various operations, from credit provision to investment product offerings, is underscored by MercadoLibre officials, aligning with the company's ambition to become the premier digital bank in Latin America.

 

 

MercadoLibre’s future plans 

MercadoLibre does not possess a banking license in other operational countries and does not intend to pursue one, as it can deliver the desired services within existing frameworks according to contxto.com. The company intends to create 8,200 new positions in Mexico this year and allocate USD 2.5 billion towards its operations in the country. Noteworthy lending agreements have been established with Goldman Sachs Group Inc., Citigroup Inc., and JPMorgan Chase & Co. for approximately half of its credit origination. 

MercadoLibre officials expressed enthusiasm regarding the growth witnessed in Mexico, attributing it to the significant expansion observed across products, marketplace, payment options, and credit services, prompting investments, office expansions, and increased hiring.


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Keywords: expansion, fintech, ecommerce, banking
Categories: Banking & Fintech
Companies: Mercado Libre
Countries: Mexico
This article is part of category

Banking & Fintech

Mercado Libre

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