MercadoLibre may offer insurance in Brazil

Latin America e-commerce giant MercadoLibre is considering expanding its portfolio of financial servicesthrough payment arm MercadoPago to include insurance policies as it continues to make inroads in the fintech space.

Speaking at the company’s Meli Experience event in São Paulo on Thursday, COO Stello Tolda (pictured) said MercadoLibre may also offer new investment products besides Interbank Deposit Certificates (CDI), and continue to expand its credit portfolio.

The platform does not have to partner with banks after receiving a license from the Brazil’s central bank in November to operate as a payment institution.

With the license, MercadoPago began to offer financial services to its clients in Brazil. In Argentina it offers individual banking accounts, which can be used to pay bills, top-up public transport cards and mobile prepaid plans, and transfer funds to third parties, while earning 5% interest on the balance.

In Q2, the company reported a record US$545mn in sales, up 62% year-on-year in dollar terms and over 100% on a currency neutral basis.

One of the quarterly highlights was Mercado Crédito, the consumer credit business the firm launched in Argentina and Brazil last year and which it is starting to pilot in Mexico.

In Argentina, Mercado Crédito grants loans to consumers to purchase outside the company’s marketplace.

At the quarterly earnings call, CFO Pedro Arnt said that the consumer credit business was posed to become a relevant profit stream for MercadoLibre in the future and the objective is to expand it to other markets.

AZUL

In addition to the financial services plans, the company also announced a partnership with Brazil’s Azul airline to deliver goods by plane.

Under the commercial agreement, Azul Cargo Express will become the exclusive air-shipping partner for goods purchased through MercadoLibre in Brazil.

"To our customers, this partnership means faster deliveries through MercadoLibre's and Azul's extensive network, covering the entire country with almost 900 daily flights. With Azul, we expect to significantly increase both the number and speed of deliveries," Leandro Bassoni, VP of Mercado Libre's Latin America shipping unit Mercado Envios, said in a statement.

Azul's cargo business grew 44% during the first half of the year, said a release. E-commerce was the fastest source of revenue growth, increasing 314% over last year. 

Mercado Libre currently represents 10% of Azul Cargo Express' revenue.