Argentine e-commerce company Mercado Libre filed a complaint against the country’s leading banks for “concentration, cartelization, and coordinated practices aimed at harming the fintech industry and its users,” according to a press release published on Tuesday.
Mercado Libre has an electronic wallet, Mercado Pago, with 12 million users in Argentina. In 2020, 36 Argentine banks created their own e-wallet called MODO, which is regularly used by seven million people.
Both Mercado Pago and MODO allow users to pay by scanning a QR code with their cellphones, usually displayed on business counters. Users can link their bank or Mercado Pago accounts to the apps. Mercado Pago also offers the opportunity to invest and even buy U.S. dollars. The company is not registered as a bank.
The complaint, filed before the National Antitrust Commission (CNDC, by its Spanish acronym) claims that the banks being grouped in one e-wallet constitutes “a cartel” and they should “compete against each other.” Mercado Libre said that having the same e-wallet allows the banks to collude to grant discounts and other deals.
“It’s as if all supermarkets agreed to have a single brand to market products and set their discounts together so as not to compete with each other,” Mercado Libre said.
Mercado Libre cited an anti-trust case from 2018, when the CNDC investigated Prisma, a holding company created by a group of banks that offered a credit and debit card payment service. The banks were forced to sell their shares of that company.
“It is clear that their main motivation is to coordinate to hinder fintech companies at all costs using the same mechanisms of the past,” said Mercado Libre’s press release, which also claimed MODO never requested CNDC authorization to operate.
Meanwhile, MODO had filed a complaint against Mercado Libre in May for allegedly restricting payment options available to users via their QR codes. On May 30, the Central Bank issued a resolution allowing the “interoperability” of the QR codes, meaning that every e-wallet should read every QR code.
A communiqué by MODO accused Mercado Libre of trying to distract from that complaint. They also said Mercado Libre is “attacking MODO and the banks’ discounts which today benefit millions of costumers and businesses.”
Sources in the banking sector told the Herald that Mercado Libre’s move is ironic, considering that the company is “a monopoly” that provides financial services without a license to do so. They also claimed that the company received state subsidies for US$35 million in the first half of 2024, thanks to a law protecting the software industry.
“Mercado Libre kept its QR payment closed for years, forcing store owners and users to be customers of its e-wallet to receive or make QR payments,” they added. They stressed that the company’s complaint is false since different banks offer separate deals through MODO and do not always act in concert.