MercadoLibre readies launch of prepaid cards in Brazil, Chile

E-commerce giant MercadoLibre plans to launch branded prepaid cards in Brazil in the near future. 

During a Fitch webinar about the card acquirer market, the company's Brazil treasury manager André Ventura said MercadoLibre "will be able to do card issuing operations in the coming months, possibly in 2021."

The move is part of the group's strategy to expand the financial services of its fintech and payments operations.

In Brazil, MercadoPago, the company's digital wallet, received authorization from the central bank in March to operate as a card acquirer and issuer.

"We are in the testing phase with the [card] brands and we should soon increase the volume processed by the acquirer," Ventura said.

A similar process is advancing in Chile.

In July, MercadoPago received authorization from Chilean financial market commission CMF to become an issuer of prepaid cards.

The new operations will be launched once the company has complied with all the necessary CMF requirements,

MercadoLibre saw its market value double to around US$50bn in the wake of the COVID-19 pandemic.

Boosted by quarantine measures in several Latin American countries, the company's revenues grew 37.6% year-over-year in Q1, to US$652mn. 

Nevertheless, the company reported a net loss of US$21.1mn, compared to a loss of US$54mn in the fourth quarter.

The Q2 results will be released on August 10.