MercadoLibre, Bind announce online investment platform

Regional e-commerce giant MercadoLibre is strengthening its foothold in the financial services sphere.

The Argentina-headquartered company is developing a digital platform that allows users of its digital wallet MercadoPago to invest in short-term debt instruments such as lebacs, issued by the central bank.

MercadoLibre founder and CEO Marcos Galperin (pictured) announced the platform – dubbed MercadoFondo – but did not give a launch date, local paper La Nación reported.

MercadoLibre is working on the initiative in partnership with local lender Banco Industrial, or Bind as it is known.

About half of Argentine adults do not have a bank account and financial services initiatives launched by the company tend to target these potential users.

"This initiative will allow those who use our digital wallet to generate, with their balance, returns similar to those obtained from lebacs," Galperin was quoted as saying.

The service is due to launch in Argentina first before being rolled out in Brazil and Mexico, MercadoPagoVP Osvaldo Giménez was quoted as saying by Reuters. "Initially we're going to create a very conservative fund, which is going to invest in fixed-income instruments, lebacs, fixed-term, so that there's no investment risk."

Platform users will be able to instantly access invested funds if they need to, he added.

The MercadoPago digital wallet allows users to make and receive payments online. The company has also launched a prepaid card in partnership with MasterCard and offers loans to qualifying merchants who sell through the site.

In addition, MercadoLibre clients in Argentina can make payments via QR codes in participating retailers. The payment is debited from the user's MercadoPago account. Linked credit or debit cards can also be used.

MercadoLibre Merchants, meanwhile, can purchase mobile phone-mounted card readers to facilitate card present payments.

"We see many hurdles that today impede many people from accessing products and services, above all in the area of payments and financial services. We want to democratize payments," Galperin was quoted as saying.

At the end of March, MercadoLibre, present in 18 countries in Latin America, had 223mn registered users, up from 182mn a year earlier. Gross merchandise volume in Q1 was US$3.13bn, up from US$2.33bn. Total payment volume through MercadoPago in Q1 was US$4.18bn, up from US$2.61bn.

The firm posted net revenue for the three-month period of US$321mn, up from US$270mn, and a net loss of US$12.9mn compared with a profit of US$48.5mn in 1Q17.