Mercado Pago Applies for Banking License in Mexico

Mercado Pago, the FinTech arm of MercadoLibre, reportedly applied for a banking license in Mexico earlier this month.

The firm sent the application to the Mexican regulator, the National Banking and Securities Commission (CNBV), Reuters reported Wednesday (Sept. 25).

Mercado Pago is the second-largest digital wallet in Mexico, offering credit and debit cards, international transfers, interest on funds stored in the digital wallet, and personal and small business loans, according to the report.

With a banking license, the company would be able to add savings and checking accounts, certificates of deposit, commercial loans and mortgages, per the report.

Mercado Pago said in a May 21 press release that it planned to seek a banking license, had initiated meetings with regulators and would officially submit the application within months.

The company added in the release that the process will not impact the current operation of the digital account, and that it will continue to add to and improve its current products.

“Today we offer services similar to those of traditional banks in a digital, inclusive and efficient manner,” Pedro Rivas, general manager of Mercado Pago, said in the release. “Our millions of users see us as their digital bank. Now we want to formalize this and become the largest 100% digital bank in Mexico.”

Gaining a banking license in Mexico will allow Mercado Pago to “compete head-on and become the largest digital bank in the region,” Osvaldo Giménez, president-FinTech, MercadoLibre and CEO of Mercado Pago, told PYMNTS CEO Karen Webster in an interview posted Aug. 16.

Giménez added the broader range of services the company would be able to offer with a banking license includes salary accounts and deposit-funded lending.

It was reported Thursday (Sept. 19) that MercadoLibre secured $250 million in financing from JPMorgan to grow the business of Mercado Pago in Mexico.

The company will use the new resources to finance more businesses and individuals in the country, with a focus on Mexican small- to medium-sized businesses (SMBs).

Over the past year, the company doubled the number of its mobile credit card readers in the country. It also expanded its loan portfolio in Mexico to $1.5 billion as of the end of the second quarter.