Mercado Libre is studying applying for a banking license in Mexico to comply with the regulations imposed by the Government of that country. confirmed it Osvaldo Gimenezpresident of Mercado Pago, the unit fintech from Mercado Libre, to the Bloomberg agency.
“The opportunity is phenomenal. We see in Mexico what happened in Brazil during the last decade, where there was an enormous increase in access to banking, electronic payments and credit,” Giménez said in an interview with the US news agency. “We want to be protagonists of this and that will allow us to launch more products,” he added.
“The banking license will facilitate many things, from how we offer credit to users to how we can offer investment products,” said Giménez. “With the scale we already have and the ambition we have to be the largest digital bank in Latin America, this step is going in the right direction,” he said.
“We are very excited about what we are seeing in Mexico,” said the Mercado Pago executive. “We have seen great growth in our products, the market, payment options and credit. That is why we are making so much investment, we recently moved our office to a larger space and we are hiring,” he closed.
Until now, Mercado Libre has been operating in Mexico with a fintech license known as IFPE, which allows it to offer a number of services, including the company’s wallet app. But there are services that it is not authorized to provide and for which you need a banking license, such as receiving payroll deposits and the elimination of a limit on the amounts withheld.
The credit card approval and issuance process would also be faster.
“The banking license will facilitate many things, from how we offer credit to users to how we can offer investment products”
As Giménez himself declared to Bloomberg, the company does not have a banking license in the other countries where it operates and is not seeking to have one because it can provide the desired services under the current frameworks. That is to say: the lack of regulation in other countries, including Argentina, allows Mercado Libre and Mercado Pago to offer services for which they are not authorized.
Mercado Libre is registered with the BCRA but does not have authorization to raise and intermediate funds from the public. You could not do it without a Financial Entity License according to Law 21,526. However, since 2016, it has collected funds from the public through its payment accounts. Then it deposits them in different banks or refers them to the capital market through FCI (Common Investment Funds). This operation is irregular according to the Financial Entities Law. However, it has the tolerance of the BCRA.
In other countries where Mercado Libre operates, such as Brazil, Colombia and now Mexico, regulations are stricter and force Mercado Libre to compete on equal terms.
