Rather than taking part of the pie from the big traditional players, it is about enlarging it by adding the population that is currently unbanked.
Almost two months ago, Mercado Pago, which today operates under the figure of Electronic Payment Fund Institution (IFPE) in Mexico, announced that it will seek a license to operate as a bank. According to directors of the entity, the expectation is to submit the request to the National Banking and Securities Commission (CNBV) at the end of the summer and before the current government ends.
Ramiro Nández, commercial director of Mercado Pago, explained that the institution of Argentine origin is ready for this, as it sees greater benefits from being a bank, which implies a broader regulatory burden under that figure.
“At the end of the day, the benefits are greater than the burden of having more regulation,” he stressed.
Within the framework of the presentation of the Finnosummit 2024 that will take place at the end of September in Mexico City, the director of Mercado Pago detailed that the advantages would be being able to offer more products to users (such as payroll), in addition to that would change the way of communicating with them, and that they would operate with the ecosystem in a simpler way.
Ramiro Nández considered that the entire process to obtain the banking license could take up to two years, during which time Mercado Pago will prepare to be able to live up to the regulatory commitments that being a bank implies.
“We have a couple of years to adapt our operation, to strengthen certain areas that today perhaps we do not have the need to have as robust or as large. Yes, we are going to have to strengthen certain capacities, but the truth is that we are very well prepared, in part because at the regional level we have some experience, and I think we are also focusing and have a very solid team on this project," argument.
He added: “So we know that in the coming months we are going to understand where we have certain gaps, where we have to strengthen a little more, what we have to adapt from our current operation and we are going to build.”
Big enough to already operate as a bank
He highlighted that the authority has been receptive in this regard, and, for their part, they understood the message that they are already large enough and with a more complex operation, to become a bank.
“So I think there was a certain wink in terms of the regulator feeling more comfortable with us operating as a bank (...) I think this transformation will allow us to give much more certainty to the regulator and also to the users,” he emphasized. .
He pointed out that although today the ecosystem is very safe, for the regulator everything regarding supervision will be much simpler and more transparent.
“To be the number one digital bank in Mexico”
The Mercado Pago manager expressed that the institution's objective, if the license is granted, is to be the number digital bank in Mexico, since there is still a large area of opportunity to bank the population, since 50% are not. .
“We believe that we can add many millions of clients to Mercado Pago once we carry out this process, and we believe that there are precisely certain products that are limited to the banking license, such as payroll, which is an enabler to capture this opportunity,” he stated. .
In fact, he added, Mercado Pago users have asked them to migrate their payroll to the platform.
By stating that they are ready to compete on a one-to-one basis with banks like BBVA, and ensuring that in fact they already do so, Ramiro Nández specified that it is not about taking part of the pie from these players, but rather about enlarging it by adding precisely to the population. which today is not in the banking system. “That's the real fight.”
