MercadoLibre is more than just an e-commerce company

MercadoLibre is more than just an e-commerce company
The Siliconreview
18 Febuary, 2020

MercadoLibre had introduced Mercado Pago, its own payments platform a few years ago. But today, the payment platform is one of the key highlights of the company and is the main reason behind its stock growth. MercadoLibre started over 20 years ago with a mission of “democratizing commerce”, but soon realized that the Latin American consumers weren’t quite capable of making online payments. This led to the introduction of its own payments platform. But the company’s core business is still reliant on e-commerce transactions where sellers list their wares and interested buyers flock to it.

One look at the total payments volume (TPV) of Mercado Pago is enough for any investor to assess its potential. TPV represents the amount of money that moved or exchanged hands using the payments app. This was possible only after the management realized the untapped potential the app had. The company introduced its app for merchants from such as grocery stores to gas stations to accept payments via Mercado Pago. To fulfill this vision, the company rolled out mobile point-of-sale (mPOS) devices for as little as they could, hence grabbing a big chunk of the market share. Earlier, it was used only to pay for purchases made on MercadoLibre’s e-commerce site. A few notable competitors to the company are PagSeguro and StoneCo.