Mercado Libre is committed to creating a digital bank

Mercado Libre is committed to creating a digital bank

According to figures from the Observatory of e-commerce, e-commerce moved in Colombia last year close to 14.6 billion pesos (4.571 billion dollars) and has shown growth of close to 14 percent. Although the balance is positive, for Jaime Ramírez, country manager of Mercado Libre, the penetration of electronic commerce is still low compared to other countries in the region.

To change this trend, the spokesperson of one of the leading platforms in the country in this category explained in Inside LR (format via La República streaming) how they will expand their business and the new services offered by their payment gateway, Mercado Pago. The main task: to turn it into a digital bank.

Mercado Libre has just received a green light in Brazil to offer financial services, will they also do it in Colombia?

Yes. Our Mercado Pago business unit is in charge of processing transactions. It not only provides services to Mercado Libre, we have more than 6,000 clients and we are the leading payment platform in the region. At the end of 2019 or the beginning of 2020, our star product will be credit, we will offer loans to buyers and sellers.

We will start with sellers and those credits can be used for working capital. For users, the idea is to offer credits for people who will buy depending on their consumption patterns. For now, they will only be for Mercado Libre, sellers and buyers, later we will see if we put them in other markets. They will be credits between 3 million and 5 million dollars.

What investments do you have for 2019 regarding technology and logistics?

For the next year, our main bet is logistics to accelerate deliveries and improve delivery rates, we already have our own warehouses in Brazil and Mexico and we are building in Argentina, which should be ready in a few months. We are seeing what we can do in Colombia to accelerate delivery. We know we want to deliver products faster and more reliably.

Where will the money come from to give loans? Will they make an alliance with banks?

What we want is to democratize money. Banks are expensive because they have very high defined charges, technology companies have lower costs and can transmit much of these savings to the user. In Argentina, we charge 0 pesos for transfers between users. In Colombia, the prices are very high, but we have not talked to any entity, the capital we are going to provide is ours.

Will they operate like Nequi does?

What we want is to return to Mercado Pago a digital bank.

How many transactions and money will e-commerce move this year and in 2019?

In terms of projection, it has been a good year and we expect to close 25% up on 2017. Electronic commerce has been growing, especially in recent years. Since 2016, we are seeing growth rates above 20%, so this year will not be the exception.

Is this figure low compared to other countries in the region?

At a regional level we are lagging behind and globally too. In Colombia, internally in Mercado Libre with some market figures, we estimate that penetration does not exceed 1.5%, which is supremely low. In other countries of the region, more developed at the level of this market, such as Argentina, Mexico, Brazil, and even Chile, exceeds between 3 and 4 percent.

How much will the arrival of Amazon impact the Colombian market?

When they enter Colombia they will accelerate the country's electronic commerce, which will make the cake grow and our participation.

How was the operation of the platform in Colombia in the global results?

We see a sustained growth. In the last 12 months that closed in September at regional level, we sold 330 million products throughout the region, which represented an annual increase of 37 percent.

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