Mercado Libre counterattacked MODO’s complaint for the control of electronic transactions

Mercado Libre came out to respond to the private banks associated with the MODO digital wallet, after the complaint against Marcos Galperín’s company before the National Commission for the Defense of Competition (CNDC) accusing “anti-competitive behavior” due to a provision issued by the Bank Central of the Argentine Republic (BCRA).

This Tuesday, Mercado Libre issued a statement in which it responds to the accusations made by MODO, the virtual wallet made up of 36 private banks, in which it emphatically rejects the accusations of abuse of dominant position.

In the note, he highlights his history of investment and job creation through technological development to simplify the financial processes of Argentines. It also highlights that, thanks to Mercado Pago, millions of people in the country accessed financial products such as paid accounts and credits for the first time, which has contributed significantly to financial inclusion in the country.

“Users freely chose to use Mercado Pago’s products over those of the competition,” he states, adding that “over the years, Mercado Libre took risks, invested, generated employment, developed products and technology to eliminate bureaucracy and make simple what was previously complex: obtain a card, generate account returns and apply for credit, among other products.

Likewise, it claims to have complied with the provisions of the BCRA’s recent measure on the interoperability of credit cards with QR codes, despite the fact that “the banks refused to agree to commercial conditions.”

“Perhaps banks should compete with each other, innovate, develop products and remunerate balances, as banks do in the rest of Latin America; instead of cartelizing and baselessly accusing Mercado Pago,” the note reproaches.

This dispute takes place in a context of the expansion in the use of virtual wallets that Argentines make in their daily transactions, since these platforms facilitated the management of money, offering a fast, safe and convenient alternative to traditional payment methods. .

The banking entities, through their MODO virtual wallet, made a judicial presentation against Mercado Libre before the CNDC for abuse of a dominant position to the detriment of multiple market actors, accusing Marcos Galperín’s company of putting “barriers” to the entry of other wallets on the market.

However, Mercado Libre considers that these statements lack solid foundations and respond to a strategy by banks to protect their interests in an increasingly competitive market.

Even the Mercado Libre statement indicates that MODO is the application that is being investigated by the CNDC for alleged cartelization by “promoting practices that affect the fintech industry and millions of consumers; for limiting transfers from bank accounts (CBU) to accounts (CVU)”.

Likewise, Mercado Libre points out that the same entity had already considered similar practices as anti-competitive in the case of Prisma (“the most relevant in terms of competition in recent decades”), which is why it points out as “striking” that the entities have united again to “avoid competing with each other.”

On the other hand, Mercado Libre points out that it complies with all current regulations and that the CNDC has recognized the benefits of the integration between Mercado Pago and Mercado Libre for the efficient and secure operation of payments on its platform.

“The banks’ claim is as absurd as expecting a supermarket to offer own-brand products from a competing supermarket or expecting banks to offer Mercado Pago products and services in their branches and home banking,” the statement concludes.