Narayan AmmachchiWith MercadoLibre and Nubank fiercely competing to dominate Latin America’s fintech market, some analysts worry that this intense rivalry might stifle the emergence of new players in the industry.
MercadoLibre leverages its extensive online retail transactions data to identify new customers, while Nubank focuses on the unbanked population.
The Argentinean retail giant, MercadoLibre, operates in 18 countries across the region. In contrast, Nubank operates in only three, including Brazil and Mexico.
MercadoLibre boasts a market capitalization of $94 billion, compared to Nubank’s $57 billion.
As a retailer, MercadoLibre has greater access to small and medium-sized businesses and has been offering consumer loans for a long time. However, consumer banking is a different arena, and MercadoLibre lacks experience in it.
While lending might be straightforward, loan recovery poses a significant challenge. Nevertheless, MercadoLibre’s strength lies in its data mining capabilities.
Nubank attributes its success to its ability to use data on financial transactions to determine creditworthiness and offer new products, such as mobile phone plans.
Both companies are products of Latin America’s growing fintech scene. Their rivalry is intensifying competition in the fintech market, making it more challenging for new entrants.
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