summary of teh Article: Mercado Pago's⁣ Challenges & Competition

This article ⁤details the challenges⁢ Mercado Pago (the financial arm of⁤ Mercado Libre) faces ⁣as it tries to expand its payment capabilities and compete with traditional banks and other fintech solutions in Argentina. Here's a breakdown of the key points:

* Integration⁤ with Banks is Arduous: It's unlikely Mercado Pago will be ⁢able to integrate ⁢a full ⁣e-commerce marketplace within a traditional banking app due to⁤ strict security regulations imposed by the ⁣Central Bank of argentina (BCRA). Banks are⁢ hesitant to incorporate their own ⁣stores into their apps, preferring to keep them separate.

* NFC Payment Push: mercado Pago⁢ is focused on expanding NFC (Near Field Communication) payments - allowing users to pay with ⁢their⁤ phones instead ⁣of cards. However, adoption is slow due to limited compatible phone penetration (40-50%). Banks are resistant to providing the necessary credentials⁢ for Mercado Pago to enroll⁤ in NFC⁤ systems, mirroring their previous reluctance with QR code implementation.

* competition with MODO: The⁤ article highlights that MODO, a local payment system, is gaining traction in NFC payments and is partnering with Google and Apple. Banks⁣ are leaning towards MODO to compete with Google Wallet and Apple⁤ Pay.

* Card Network Dynamics: Visa is closely aligned with banks, while ⁢Mastercard has a stronger presence within the fintech space. visa⁢ is actively promoting NFC payments, ⁣even partnering with MODO, ⁣Google, and Apple.

* Mercado Pago's Current NFC ⁣Limitations: Currently,Mercado Pago⁤ only supports NFC payments with its own prepaid and credit cards.

* Seeking a License to Process Salaries: A major goal for Mercado⁣ Pago is to obtain a license that would allow it to process salary payments, something it already does for social welfare programs.

In essence, the article portrays a competitive landscape where Mercado Pago ⁤is striving to innovate in the payment space but is facing regulatory hurdles and strong resistance from traditional banks and established payment systems like MODO. The article suggests a power struggle between Mercado Pago⁢ and the ⁣banking sector, with card networks like Visa and Mastercard playing a key role in shaping the future of digital payments in Argentina.