MercadoLibre's fintech arm targets digital banking in Mexico with license

Latin American e-commerce giant MercadoLibre's fintech arm, Mercado Pago, announced on Tuesday that it will apply for a banking license in Mexico in its bid to become the largest digital bank in the country.

The announcement makes Mercado Pago the latest online firm looking to expand its offerings in the increasingly crowded market.

Brazilian neobank Nubank NU, which already has 7 million clients in the country, applied for a license to operate as a multiple banking institution last year. Meanwhile, London-based Revolut obtained a license of its own in April.

The license would allow Mercado Pago to provide services such as savings and checking accounts, certificates of deposit (CDs), commercial loans and mortgages in the country.

In Mexico, Mercado Pago currently offers credit and debit cards, transfers from abroad, interest on funds stored in its digital wallet as well as personal and small-business loans.

"We already offer services similar to traditional banking but in a digital, inclusive and efficient way. Now we want to formalize it and become the largest completely digital bank in Mexico," said Pedro Rivas, Mercado Pago's country head, in a statement shared with Reuters.

Founded in 2003, Mercado Pago operates across Latin America and logs more than 15 million transactions a day.