MercadoLibre Joins Discussions to Apply for Mexican Banking License

MercadoLibre is reportedly in talks to get a banking license in Mexico.

The Latin American eCommerce/FinTech is in discussions with Mexico’s central bank, finance ministry and banking regulators to apply for a license, Osvaldo Gimenez, president of Mercado Pago, the company’s FinTech operation, told Bloomberg News Tuesday (May 21).

“The opportunity is phenomenal. We see in Mexico what happened in Brazil over the last decade, where there was a huge increase in access to banking, electronic payments and credit,” Gimenez said in an interview. “We want to be protagonists on this, and this will allow us to launch more products.”

The process could take 12 to 24 months, he added, noting that the company considered buying a banking license but ultimately decided against it.

While MercadoLibre has a FinTech license in Mexico, a banking license would let it receive payroll deposits, remove a cap on the amounts held, and more quickly approve and issue credit cards, the report said.

“The banking license will make a lot of things easier, from how we offer credit to users to how we can offer investment products,” Gimenez told Bloomberg. “With the scale we already have and the ambition we have to be the largest digital bank in Latin America, this move is going in the right direction.”

As Bloomberg noted, Mexico has become an attractive place for FinTech startups, as less than half of the country’s population has a bank account. British FinTech Revolut obtained a banking license last month, while the Brazilian company Nubank has just applied for one.

There’s also a wealth of opportunity for merchants in that country to step up their game by adding digital features and making those already available in the market more apparent, PYMNTS wrote on Monday (May 20).

That’s because, as that report said, more and more consumers in Mexico are “turning to digital shopping features that offer savings and improve convenience while shopping in the store.”

At the same time, they enjoy visiting brick-and-mortar locations, but they also want the ease of using digital commerce features, a concept known as Click-and-Mortar shopping.

According to PYMNTS Intelligence research, nearly 40% of Mexican consumers use the Click-and-Mortar resources merchants already have available.

“This hybrid shopping model combines the benefits of in-store experiences with the savings and convenience of digital aids,” PYMNTS wrote. “For example, consumers in a physical store might use mobile apps for checking prices or product information.”