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FINTECH REGULATIONS | 12 Months Ended
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Dec. 31, 2024
Cash and Cash Equivalents [Abstract] |
FINTECH REGULATIONS | FINTECH REGULATIONS New regulations issued by the Central Banks and other regulators of the countries where the Company operates its Fintech business are described below. Brazil In March 2022, the Central Bank of Brazil announced new rules for payment institutions based on their size and complexity and raised standards for required capital. The new framework, which was effective starting in July 2023 with full implementation by January 2025, will extend the application of the rule regarding proportionality of regulatory requirements (currently applicable to conglomerates of financial institutions) to financial conglomerates led by payment institutions. The new rules require a gradual increase, between 2023 and 2025, in the regulatory capital requirements applicable to the Company’s regulated Brazilian subsidiaries based on the following schedule: from July 2023 onwards, 6.75%, from January 2024 onwards, 8.75% and from January 2025 onwards, 10.50%. On January 2, 2024, article 28 of Law 14,690 came into force, which caps the total amount that may be charged to a credit card holder in the form of interest and financial charges at the value of the original debt. The BACEN also adopted rules in Resolution CMN N° 5,112 that provide guidance and define criteria for calculating the original value of the debt in card revolving and invoice financing operations. To comply with the new regulation, we reduced the duration of the credit card invoice financing plans beginning in January 2024. On June 28, 2024, Law No. 14,905 was enacted, modifying Decree No. 22,626, known as the "Lei da Usura". The law came into force on August 28, 2024, resulting in operations undertaken with institutions authorized by the BACEN, such as Mercado Pago Instituição de Pagamento Ltda., no longer being subject to the previously imposed interest rate cap. Argentina On May 18, 2023 and May 30, 2023, the CBA enacted new regulations establishing that (i) QR codes must be interoperable with credit card payments, effective as from May 1, 2024; and (ii) digital wallets that allow credit card payments by reading QR codes must be interoperable, effective as from July 29, 2024. These regulations also expanded the payment services providers (“PSP”) registry and established that certain entities that accept, acquire, aggregate or sub-acquire payments must be registered. Under these regulations, MercadoLibre S.R.L. was registered as a Payment Aggregator in the "Registry of Payment Service Providers" of the CBA on June 24, 2024 and as a Payment Accepter in the "Registry of Payment Service Providers" of the CBA on April 10, 2024. Mercado Pago Servicios de Procesamiento S.R.L. was registered as an Acquirer in the "Registry of Payment Service Providers" of the CBA on February 23, 2024. On September 14, 2023, the CBA established that starting on December 1, 2023, DEBIN (debit immediate), the main and simple funding source of Mercado Pago users’ accounts, will be suspended and replaced with a pull transfer method that requires the consent of the client outside of Mercado Pago’s environment before the first use. After several extensions of the application of the rule, on April 30, 2024, the CBA approved a new method of pull transfer that no longer requires the consent of the client outside of Mercado Pago’s environment. On June 6, 2024, the CBA established that PSPOCP are no longer required to distribute the returns generated by their clients' funds. However, financial institutions are still required to set up a reserve of 100% of the customer funds deposited by Mercado Pago and may invest up to 45% of those funds in Argentine bonds. On June 4, 2024, Mercado Pago Inversiones S.R.L. was established. After its registration in the General Inspection of Justice on August 9, 2024, on September 2, 2024, this subsidiary requested a Comprehensive Settlement and Clearing Agent license to the Argentinian National Securities Commission, which was authorized on February 5, 2025. In addition, the subsidiary initiated the registration as a Comprehensive Investment Fund Placement and Distribution Agent (“ACDI”), which is still pending approval. On June 4, 2024, Mercado Pago Asset Management S.A. was established. After its registration in the General Inspection of Justice on August 5, 2024, on September 2, 2024, this subsidiary requested a Product Administration Agent of Collective Investment - Common Investment Funds license and requested the creation of a Money Market Mutual Fund ("Mercado Fondo Ahorro") to the Argentinian National Securities Commission. Both authorizations were granted on February 5, 2025. In addition, this subsidiary requested the replacement of Industrial Asset management S.A. as Management Agent of “Mercado Fondo”, which is still pending approval. As of the date of this filing, Mercado Pago Inversiones S.R.L. and Mercado Pago Asset Management S.A. have not yet begun their operations. Chile On October 12, 2022, the Chilean Congress approved the Fintech and Open-Banking Law Project, which was published on January 4, 2023, and came into effect on February 3, 2023. This law established a regulatory framework for certain technological financial services that did not have their own legal framework. These services are: (i) Alternative Transaction Systems, (ii) Crowdfunding Financing Platforms, (iii) Financial Instrument Intermediation, (iv) Order Routing, (v) Credit Advisory, and (vi) Investment Advisory. Pursuant to this law, in January 2025, Mercado Pago Crypto S.A. submitted the license application to the Chilean Commission for the Financial Market (“CMF”) within the legal deadline for its ruling, which is still pending approval. On April 8, 2024, the Chilean Congress published the Cybersecurity Law. Although Mercado Pago Chilean entities already comply with the law’s main obligations as a result of being regulated entities, pursuant to this new law, such entities will be subject to a new regulator and must comply with certain reporting requirements for cybersecurity incidents. We expect that the Mercado Pago Chilean entities will be required to comply with these new reporting requirements sometime during 2025 or 2026. On May 30, 2024, the Chilean Congress passed Law 21,673, amending Law 20,009, which, effective as of June 1, 2024, establishes a limited liability regime for users of prepaid cards in case of loss, theft, or fraud. Pursuant to Law 21,673, there may be instances in which an issuer may suspend a refund in the event of fraud or serious fault on behalf of the user claiming such refund on account of allegedly fraudulent charges. Mercado Pago Emisora S.A. completed the implementation of these measures for its compliance. Colombia In June 2023, MercadoPago S.A. Compañía de Financiamiento obtained a license issued by Colombian Financial Superintendence to operate as a financial institution in Colombia, enabling it to offer credits, digital accounts, investments and prepaid cards. As a financial company it is subject to minimum capital, reporting, consumer protection and risk management requirements. On April 22, 2024, MercadoPago S.A. Compañía de Financiamiento started operations initially offering only the “Ordinary Deposit” product. In accordance with regulations, customers' funds are now subject to regulatory liquidity, reserve, and solvency requirements to ensure their protection. Uruguay On April 12, 2024, MercadoPago Uruguay S.R.L. initiated a process with the Central Bank of Uruguay (“BCU”) to be authorized to act as a payment acquirer with transfers, as an activity related to electronic money issuances, in compliance with new regulations that came into effect on March 1, 2024. On July 3, 2024, MercadoPago Uruguay S.R.L. received authorization from the BCU to offer payment with transfers acquiring services. On April 17, 2024, MercadoPago Uruguay S.R.L. was approved as a participant in the automated clearing house managed by Urutec S.A. This approval allows MercadoPago Uruguay S.R.L. to participate in the fast payment system and offer a new payment method to its users: interoperable QR transfer payments. In September 2024, the BCU announced that they approved the release of the interoperable QR transfer payment feature of the payment system. Peru On November 10, 2022, the Central Reserve Bank of Peru (“BCRP”) enacted regulations related to the card payment processing system that applies to issuers, acquirers and payment facilitators. On January 27, 2023, MercadoPago Perú S.R.L. was registered by the BCRP as a payment facilitator entity, allowing it to (a) affiliate merchants to the card payment system, (b) offer POS, and (c) transmit or process card payment orders and /or participate in the process of settlement to the merchants affiliated. On February 20, 2024, the Register of Entities with Payments by Card agreement form was completed, in accordance with BCRP requirements.

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