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How MercadoLibre Is Helping Take Latin American Commerce Digital

By Motley Fool Staff – Jun 30, 2017 at 7:03AM

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The e-commerce game is just getting started in Latin America, and MercadoPago is helping smooth the transition.

MercadoLibre (MELI 2.75%) is quickly taking off as the Amazon of Latin America.

In this Industry Focus: Tech segment, Motley Fool analyst Dylan Lewis and contributor Danny Vena explain how the Latin America payments transactions market is different from the U.S., and how MercadoLibre is working to make e-commerce more accessible to consumers there.

A full transcript follows the video.

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This video was recorded on June 23, 2017.

Dylan Lewis: Looking at this market in particular, I think there are a lot of things to like. That's why I'm an investor -- I own shares of Mercado. I don't have the cost basis that you do. You bought into this company a long time ago. But this Latin American market is in a lot of ways behind the U.S. in the wave of e-commerce. When I look at how they're positioned here, I think there are a lot of really good-looking tailwinds that should help drive Mercado's business going forward.

Danny Vena: That's right. Actually, to give folks a little background, they're behind us in several ways that, if you're aware of it, it kind of makes sense. If you look at the Latin American market, many of the transactions that occur there between consumers and vendors are still paid in cash. Most of the people in Latin America don't have a credit card. Most do not even have a bank account. So they are still primarily a cash-based economy. MercadoLibre, when they first moved into the market and set up MercadoPago, and that has been key to their growth thus far because it provided a way for vendors and sellers to transact business that didn't include cash, which is key to them moving into the e-commerce arena.

Danny Vena owns shares of AMZN and MercadoLibre. Dylan Lewis owns shares of AMZN and MercadoLibre. The Motley Fool owns shares of and recommends AMZN and MercadoLibre. The Motley Fool has a disclosure policy.

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