Mercado Pago, Órama team up in investment platform

Mercado Pago — the digital wallet that was born in Mercado Libre and is now a big provider of several types of financial services — has teamed up with investment manager Órama to create an investment platform. The commercial agreement — there is no equity participation involved — has a minimum term of five years and provides for exclusivity. The offering will start for a small slice of the 34.5 million user base next week, but the idea is to scale up quickly, replicating the success that Mercado Pago had when it offered the option to buy cryptocurrencies late last year.

Known for working with classes C, D and E, Mercado Pago says there was demand from its customers for investment products. The offer will start with simpler options, and then will be expanded. The debut product is a certificate of bank deposit (CDB) from the group’s financial institution, with investments starting at R$1, which delivers yields of 150% of the CDI (the interbank short-term rate), in a promotional yield valid for those who make the investment in May and limited to R$5,000. The strategy is very similar to what other investment platforms are doing, such as XP, Toro and Genial, which advertise on social networks CDBs with eye-popping returns.

“Even today we still have almost R$1 trillion invested in savings, with a very low yield, and that from all social classes. We already have the cryptocurrency offer and the interest-bearing account, but our users were asking for more investment options, with better returns and even longer terms,” says Túlio Oliveira, vice president and country manager of Mercado Pago in Brazil. “We seek to promote real democratization, with accessible investment, without fine print. It will be a simple and safe experience,” he says.

Habib Nascif, CEO of Órama, says the partnership marks the beginning of a complete and integrated investment platform. “We specialize in creating solutions so that more people have access to quality investments. But besides offering good products, we also have to democratize the distribution channels. With this in mind, the Mercado Pago marketplace puts the financial market in people’s day-to-day lives,” he says.

He says that the management company was one of the first financial institutions to be born totally in the internet cloud and that it is fully prepared, from an operational and technological point of view, to serve Mercado Pago users. “We were the first to offer zero fees, investments with no minimum values, and to adopt a less formal language in marketing campaigns. The democratization of investments, including financial education, is very important to us, and that’s why we had such a good connection with Mercado Pago,” he says. Today, the management company has more than 3,000 partners in its “white label” platform and 370,000 accounts.

Later this quarter, Mercado Pago will offer a solution to help users with financial planning. “With our investment marketplace, we will have options so that Brazilians can concentrate their lives in one place, as well as organize their finances, keep emergency reserves or have a savings account with defined life goals,” says Mr. Oliveira. For Mr. Nascif, Mercado Pago’s user base has a huge potential for investments and, with financial education and the possibility of designing specific products for them, the expectations are very positive. “They need to start investing, get into the habit. It is a short, medium and long term construction.”