MercadoLibre Payment Volumes Leap 33% as Platform Reaches 100M Buyer Milestone

MercadoLibre’s fourth quarter results showed double-digit growth in unique active buyers and items sold across the company’s marketplace, along with momentum in its credit card business.

The most recent earnings supplementals, released after the markets closed on Thursday (Feb. 20), detailed that during the fourth quarter, gross merchandise values (GMV) were up 8%, to $14.5 billion, items sold gathered 27% year over year to 525.5 million, and the total payments volumes soared 33% to $58.9 billion.

In a nod to eCommerce momentum, same-day and next-day shipments gained 21%, and the company disclosed that 49% of shipments were delivered in this time frame.

Drilling down into the country-by-country activity, MercadoLibre’s GMV growth, year over year, was 28% in Mexico, 32% in Brazil and 141% in Argentina.

The company’s credit portfolio was up 74% year over year to $6.6 billion.

Unique buyers gained 24% to 67.3 million individuals and items sold per buyer gained 3% year over year, to 7.8. Within FinTech Services, monthly active users surged 34% to 61.2 million. Within that segment, credit cards are the largest portfolio, at 40% of the total credit portfolio, up from a 32% contribution a year ago. For the full year, the company’s credit card business jumped by 118% to $2.6 billion.

Credit Metrics Improve

Overall credit metrics improved, where past due percentages of non-performing loans — defined as being past due between 15 and 90 days — stood at 7.4%, down from 7.8% in the third quarter, and down from 8.2% last year. Monthly active sellers with credit were 24.6%, up from 14.2% in the fourth quarter of 2023.

For the full year, the company logged a significant milestone, notching 100 million unique buyers on its platform, adding 18.8% through the year.

Shares were up 13% in after hours trading on Thursday.

During the conference call with analysts, CFO Martin de los Santos said that, in discussing the credit card business, “having a solid credit card offering is critical to our ambition of being the largest digital bank in Latin America, and leveraging our unique competitive advantages in underwriting and distribution. So we’ll continue investing in our platform to capture these opportunities even if some time they put short-term pressure on margins.”

All cohorts of the card portfolio are becoming profitable, the CFO said, who added that “the pillars of our long-term growth strategy are based on the relatively low penetration of eCommerce in our region. There is a huge opportunity to offer better financial products to large segments of a population that have been underserved by traditional banks and a digitalization of cash for merchants and individuals.”

During the question-and-answer session with analysts, management noted that credit quality has remained strong, with no deterioration — and in fact, in Brazil the credit card business had the lowest first payment default metrics on record as of the end of last year.

“Essentially, we’re being a little bit more cautious. Nonetheless, we are very comfortable with the level of risk we are taking,” the CFO said. Elsewhere, management commentary on the call noted that eCommerce volumes in categories such as groceries and consumer electronics are performing well.