La Derecha Diario Virtual Wallets: Mercado Pago and Ualá Aim for Total Control of Digital Money
The main virtual wallets seek to advance in the financial business and compete head-to-head with banks
Competition in the world of fintech is intensifying and it's no longer just between companies in the sector, but also against traditional banks. The main goal of the year is to offer debit cards and gain prominence in users' daily lives.
So far, Ualá and Mercado Pago have been issuing prepaid cards, but the new regulation that allows payments in dollars with debit restricts this possibility only to banks with CBU. This leaves them at a disadvantage compared to traditional entities.
How does the new regulation impact Mercado Pago and Ualá?
The government established that payments with debit cards in dollars can only be made from bank accounts. Additionally, it modified the conditions for payment accreditation to businesses and reduced the commissions that fintechs receive.
According to analyst Ariel Setton, this creates extra pressure on virtual wallets, which depend on financial intermediation to sustain their businesses.
Ualá vs. Mercado Pago: who has the advantage?
Ualá starts with a key advantage. In 2021, it bought Wilobank, the country's first digital bank, which allows it to issue debit cards and operate with CBU in pesos and dollars.
Meanwhile, Mercado Pago doesn't yet have a banking license, but there are rumors that it could move in that direction. In Brazil, it has already launched a dual card that functions as both credit and debit at the same time, and it could replicate this in Argentina.
Virtual wallets vs. banks
Beyond the fight between fintechs, the main battle is against banks. The key for wallets is to become the user's first choice in their daily financial life.
In times of crisis, consumers are less loyal and seek the best benefits: discounts, interest rates, and exclusive promotions. In this context, wallets are betting on a superapp model, offering multiple services in one place.
The strategy of Ualá and Mercado Pago to gain users
Both fintechs aim to capture salaries, which would allow them to compete directly with traditional banking. Ualá already offers a credit card at no cost for those who credit their salary. On the other hand, Mercado Pago provides discounts similar to those of banks.
Additionally, they could develop innovative financial services, such as financing for cars or properties, leveraging their digital ecosystem.
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