President and CEO of PayPal Dan Schulman announced on Monday this week that his company has signed an agreement with MercadoLibre to integrate their payment solutions and expand his company’s remittance service in Latin America.
“… I’m pleased to share that we have signed a wide-reaching commercial agreement that will meaningfully drive an increase in our international scope and scale. As part of the agreement, PayPal will be made available as a payment option in the Mercado Pago online checkout for people in Brazil and Mexico, which opens the door for PayPal’s 300 million customers to shop at hundreds of thousands of new merchant,” Schulman stated in a LinkedIn post.
MercadoLibre users in Brazil and Mexico will have access to PayPal services for cross-border purchases. Equally, PayPal will offer Mercado Pago as a payment method through its online portal, giving Mercado Pago’s over 48 million users in Brazil and Mexico access to merchants around the world.
“Additionally, we will expand Xoom’s presence by allowing Mercado Pago users to receive remittances into their Mercado Pago wallet initially in Mexico and Brazil,” the PayPal CEO added.
In March last year, PayPal announced an investment of US$750 million in MercadoLibre through the acquisition of common stocks. At the time Schulman reasoned that the tremendous growth of e-commerce in Latin America presented “great opportunities to integrate our respective capabilities to create unique and valuable payment experiences for our combined 500 million customers throughout the region and around the world”.
The Latin American payment solutions firm indicated then that it would use the proceeds from the acquisition to expand its e-commerce platform, strengthen its logistics infrastructure, and invest in solutions that “further solidify the company’s position as a powerful provider of inclusive end-to-end financial technology and payments solutions”.