Mercado Libre Admit Testing Business Payments on WhatsApp in Brazil

Mercado Libre, the largest Latin American eCommerce platform and fintech, is working with Meta-owned WhatsApp messaging service to launch digital payments in Brazil, the region’s largest economy.

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What’s the scoop? In an interview with Reuters, Pedro Arnt, CFO of Mercado Libre, confirmed the project, “We are in the test phase as one of the partners that processes payments in Brazil.

“This could be an opportunity for us to leverage WhatsApp efficiently to generate more sales and better customer contacts.

“We have a very strong relationship with our consumers because we can solve both their financial needs and their commerce needs. That puts us in a very strong position.”

Why it matters: Meta has been struggling to find a payments partner in Brazil to launch its WhatsApp-based consumer-to-business (C2B) solution in the country, reported the Financial Times (FT) earlier this year.

The Brazil launch was intended as a test bed for the social media firm’s broader ambitions to boost revenue from eCommerce services globally as growth in its primary business units, Facebook and Instagram has slowed.

Furthermore, FT claimed negotiations between local payments groups and Meta had stalled over legal and financial disagreements.

“The problem isn’t technical,” a person familiar with the talks told the FT, who asked not to be named. “It’s contractual. The infrastructure is all ready.”

How would the service work? Through the integrated payments tool in WhatsApp, Brazilian users would be able to locate a company’s account using an in-app directory and then pay for digital purchases with their credit or debit card.

The goal here is that once the seller and buyer agree on the terms of the transaction, which they could negotiate through WhatsApp, the parties could proceed with the sale without needing to switch to another payments solution.

Simple, quick, and efficient digital commerce.

Mercado Libre & WhatsApp Syngergy

What’s Next? The partnership between the two companies appears to still be in the early stages.

Mercado Libre’s Arnt did not say how far along the two companies are in the testing phase or when this service could roll out to the public.

Nor did he offer any financial details or benefits the partnership would bring to Mercado Pago, the group’s payments processing business unit.

The market: Brazil is important to both companies. It is WhatsApp’s largest market, followed by India and Indonesia. 

For Marcado Libre, Brazil is the biggest revenue generator in Latin America — more than double of the next two countries combined, Argentina and Mexico.

The potential is there for both companies to profit from this partnership in Brazil, especially since it is a highly connected country with more than three-quarters of the 214+ million population having internet access.

Additionally, Marcado Libre has the infrastructure and know-how to move this project forward in Brazil, bringing C2B payments inside the WhatsApp messaging service.

Brazilians already can send Person-to-Person (P2P) payments from within WhatsApp since 2020, although the service ran into regulatory problems in 2021, which have since been resolved.

CB2 payments would finally turn WhatsApp into a complete payments tool for almost any transaction. No details have been announced yet on when C2B payments may become available to the public.