Kylie Madry
MEXICO CITY (Reuters) – Latin American e-commerce giant MercadoLibre Mercado Pago’s (NASDAQ:) fintech unit has more than doubled adoption of its slim mobile credit card readers over the past year, outpacing rival options from banks and Clip, according to an executive.
Mexico is still ruled by cash and, as Latin America’s No. 2 economy, it still lags far behind Brazil in terms of digitalization, Brigitte Brousset, head of merchant finance in Mexico at Mercado Pago, told Reuters.
Brazil found itself in a similar situation, but credit cards were adopted quickly 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 from third parties such as Mercado Pago and Clip, a Mexican digital payments platform, were 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’s and print paper receipts, has stagnated, while third parties have issued more than 4 million, the firm said.
Percentage growth in Mercado Pago’s readership in Mexico over the past year has been in the “low triple digits,” Brousse said, “which is actually quite fast.” She declined to share comparisons with other countries where the firm operates.
Purchasing a traditional reader at a bank may require a lengthy visit to the branch where merchants have an account, Brousse says. She touted the ease of ordering online at Mercado Pago, where the price for readers is only 149 Mexican pesos ($8.07).
In addition to credit card readers, Mercado Pago in Mexico also offers loans, credit and debit cards, and transfers from abroad.
The company issued more than 1 million loans to small businesses in the country last year and hopes to exceed 2 million in 2024, Brousseau said.
Mercado Pago is set to apply for a banking license in the country in the next few months, which will allow it to provide services such as savings and checking accounts, certificates of deposit (CDs), commercial loans and mortgages.
Brousseau said it was too early to discuss how the license would impact merchants’ options.
($1 = 18.4540 Mexican pesos)