MELI

I know some of you on this board follow $MELI. Last earnings report they started to make a major emphasis within the report re: their payments capability (MercadoPago). If you look at their CEO’s Twitter page ---- he almost exclusively speaks to their payment capability as opposed to their traditional e-commerce capability.

https://twitter.com/marcos_galperin

Have a look at his most recent Twitter post ---- which shows a one day challenge and a 30’ish second video. A bit of marketing by Marcos at play yet given the large uptick in MercadoPago payments, and his repeated Twitter messaging re: payments, it’s almost like he’s telegraphing what the next earnings report will be centered on.

Speaking of earnings, in his opening paragraphs from the last earnings report:

So let’s begin this time with a fintech progress report as it has become a growing area of focus for our organization. Quarterly TPV reached $4.5 billion, a growth of 74% year-on-year on an FX neutral basis, excluding Venezuela. During the quarter, off-platform TPV explained 80% of the total incremental total payment volume as we increasingly focus our efforts on our growing online to offline payments offerings, successfully expanding the financial services we offer our merchants and growing the markets we are currently in.

During the month of September, for the first time ever, not only MercadoPago processed more total payment transactions off-platform than it did on MercadoLibre marketplaces, but total payment transactions surpassed the 100 million mark in a single quarter. This is a testament to the stride we’ve made growing our fintech ecosystem over the last few quarters. This growth has been driven in large part by our mPos business, which continues to fire on all cylinders. During the quarter and on a consolidated basis, FX neutral total payment volume from mobile Poss grew 636% year-on-year.

Going forward, we’ll remain focused on merchant signup as we look to continue growing the number of net new ads to our mPos solution, which is already robust and forming a large and growing installed base of active merchants, processing payments through us. We see this segment as a still underserved and very large total addressable market that is also going to be key to the distribution of most financial product and services we would develop in our fintech portfolio.

We’re also very pleased with the progress we’re seeing in our mobile wallet initiatives, which have reached an important milestone this quarter, crossing the 1 million monthly active payers mark in a single month. In line with that, active payers grew triple-digits in Brazil, Argentina and Mexico during this quarter.

Through the MercadoPago wallet, an individual can set up our mobile wallet within minutes and be able to send peer-to-peer payments, top up his mobile device, pay for utilities, store money, and pay physical world merchants via our growing QR payment network.

As we continue to build greater ubiquity and add more usage cases to our two-sided network, total payment volume from the mobile wallet on an FX neutral basis should also continue to grow triple-digits year-on-year in Brazil, Argentina and Mexico as it did during the third quarter of 2018.

Their off MercadoLibre marketplace (meaning buying at local shops, etc.,) TPV was up 163% YoY and sits at $US1.6Bn in TPV.

I get the whole Amazon competition question on the marketplace product but even w AMZNs announcement of more product this week, I think MELI enjoys first market mover on the marketplace product. Buyers are already there. Anyway, that’s a bit of a tangent as I now see Marcos shifting much more focus on payments. Could be a similar situation to what EBAY did w PYPL some years ago ---- spin-out.

Anyway, some fodder for thought. Appreciate hearing both sides of the coin.

Disclosure ---- $MELI is about 1.98% of my portfolio.

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