Fintech
MercadoLibre’s fintech arm sees boom in credit card readers in Mexico From Reuters
By Kylie Madry
MEXICO CITY (Reuters) – Mercado Pago, the fintech arm of Latin American e-commerce giant MercadoLibre (NASDAQ:), has seen adoption of its slim mobile credit card readers more than double over the past year, gaining ground on competing options from banks and Clip, an executive said.
In Mexico, cash is still king and, as Latin America’s second-largest economy, it is still far behind Brazil in terms of digitalization, Brigitte Brousset, head of merchant financing in Mexico at Mercado Pago, told Reuters .
Brazil had been in a similar situation, but credit card adoption has been rapid and the central bank-backed Pix system now threatens to take over digital payments.
In Mexico, “we are still behind other countries,” Brousset said Friday, “but market penetration is accelerating.”
Five years ago, about a million credit card readers provided by traditional banks and another million by third parties such as Mercado Pago and Clip, a Mexican digital payments platform, were being used by merchants and stores in the country, according to the company.
Now, the number of bank-provided credit card readers, which are bulkier than Mercado Pago devices and print paper receipts, has remained stagnant while third parties have rolled out more than 4 million of them, the company said.
Mercado Pago’s readership percentage growth in Mexico has been “triple digits” over the past year, Brousset said, “which is really pretty fast.” He declined to share comparisons with other countries where the company operates.
Getting a traditional reader from a bank can require a long visit to a branch where vendors keep an account, Brousset said. She touted the ease of ordering one online from Mercado Pago, where readers are priced starting at 149 Mexican pesos ($8.07).
In addition to credit card readers, Mercado Pago in Mexico also offers loans, credit and debit cards, and foreign transfers.
The company signed more than 1 million small business loans in the country last year and aims to reach 2 million in 2024, Brousset said.
Mercado Pago will apply for a banking license in the country in the coming months, which would allow it to provide services such as savings and checking accounts, certificates of deposit (CDs), business loans and mortgages.
Brousset said it is too early to discuss how the license will affect options for merchants.
($1 = 18.4540 Mexican pesos)