MercadoPago, the payments division of MercadoLibre — a Latin American eCommerce giant akin to Amazon — is now one of the company’s most profitable units, the Financial Times (FT) reported Thursday (April 28).
MercadoLibre launched in 1999 as a second-hand marketplace in Argentina and has since expanded as a major eCommerce hub across the Latin American region. Its payments unit rolled out in 2004 and quickly gained traction, with as many as 50% of adults in the area underbanked and needing an alternative.
See also: Digitizing Payments in Latin America Playbook: Brazil Is Setting the Standard
MercadoPago processed $77 billion in app-based payments last year — a 55% hike from 2020, the FT reported. Company founder and CEO Marcos Galperin said the company’s payments division has escalated in popularity far more quickly than originally expected.
The company’s overall valuation has more than doubled during the pandemic to more than $50 billion by market cap, according to the latest FT-Statista ranking of The Americas’ Fastest-Growing Companies. Its compounded annual growth rate from 2017 through 2020 was 41.6%, per the report.
According to the International Monetary Fund (IMF), the Latin American region was hit by more economic devastation from the pandemic than any other region in the world. While the pandemic helped boost the adoption of MercadoLibre and MercadoPago, Galperin told the FT that COVID just held a spark to further plans and goals already in the works.
Read more: Report: 90% of Latam Millennials Have Access to Digital Payments
“My goal was to help small and medium-sized companies compete, moving away from the traditional urban centers and giving everyone access to the same kind of products,” he said, adding that he launched the company from the garage of his family’s leather business.
The report noted that MercadoLibre created over 4,000 new jobs in 2021, bringing the company’s total workforce in the country to 10,000.
Related: Mercado Libre Boosts Its Billion-Dollar Brazil Investment
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