Contxto – Not too long ago, a group of some of the largest banks in Argentina stated they would launch a joint app. Through it, they hope to attract users who’ve been opting for the likes of fintechs like Mercado Pago.
More recently, the app’s developers disclosed just what users can expect from it. And it certainly does have its advantages, which can only further heat up the competition with Mercado Libre’s fintech app.
Modo payment app: “Not an e-wallet”
We’d talked about this up-and-coming app called “Dimo” a little over a month ago. But a lot has changed since then—including its frigging name. Apparently now it shall be called “Modo” and its creators want to be very clear as to what it isn’t.
“We want to offer users the chance to pay however they want,” says Rafael Soto, CEO at Play Digital, the company that’s tasked with developing the app. “We aren’t making an e-wallet because it doesn’t have its own funds. The customer uses it [the Modo app] to see the funds on their bank accounts.”
Correspondingly it will work more as a payment aggregator. Users just register their bank accounts and related payment tools like debit cards onto Modo.
Likewise, participating parties had stated they hoped to unleash the app by September of October of this year. However, they’ve recently gone on to say that it shall hopefully be done during the final quarter of 2020.
I guess they don’t want to jinx it by giving out a date.
In any case, it would be strategic that Modo is available before or around the holiday season. With Covid-19 still running amuck, e-commerce businesses will have a holly jolly Christmas, and banks don’t wanna miss out on all that transaction action.
The brains behind Modo will make payments via QR code its first feature. And that’s also where it shall go toe-to-toe with Mercado Pago.
Banks’ Modo versus Mercado Libre
With all that being said… who has the upper hand?
In terms of building consumer trust, users might opt for Modo because it’s backed by familiar, big-name banks like Santander and BBVA. Meanwhile, Mercado Libre can be mistaken as “just” an e-commerce platform.
Moreover, banks tend to offer rewards programs and discounts when using their products. And they intend to bring these perks to the Modo app. When users complete a payment with Modo, the transaction will still be valid for the bank’s corresponding promo.
So another point for Modo.
Last but not least, app users won’t reportedly need to add in the related bank account information—referred to as a CBU—if they want to send money to a friend. They can just find their contact on their address book and send it away.
Quite convenient. Bonus points for that.
On the other hand, Mercado Pago’s app has been in the market for a longer time. Wisdom comes with age after all. So points for Mercado Pago who’s accumulated more overall experience in these types of apps.
Likewise, Mercado Pago can connect with potential new users and vendors via its marketplace platform—through which it can offer its own set of discounts and goodies. That’s a double win.
Moreover, payments via Mercado Pago can easily be sent as links through popular social media apps like WhatsApp. So kudos for that.
So who will win? Drumroll, please...
Bringing home the gold
From what I’ve read about the Modo app, I’d give Mercado Pago the win—for now. It’s a close race, but Mercado Libre has been investing heavily into other fintech-related verticals.
Earlier this year, for example, it bought Lagash, a software development startup that specializes in all things financial, banking, and insurance. If anything, this makes me think it wants to become a one-stop-shop for fintech needs.
And because of that, I’m declaring Mercado Pago the victor.
But you’d be mistaken to think this is a one-on-one showdown between banks’ Modo and Mercado Pago in Argentina. According to iProup, in terms of app downloads, Mercado Pago is actually bested by BNA+, an app built by Banco de la Nación Argentina, a state enterprise.
Didn’t see that one coming now did ya?
But that’s just in Argentina. Beyond its native country, and within the Latam region, Mercado Pago dominates.
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