Most investors would jump at the chance to go back in time and lay out some of their hard-earned cash for a life-changing investment. Sure, there's the occasional overnight sensation, but most successful companies do it the old-fashioned way, by making the right decisions over a period of years. Examples abound, including online store (NASDAQ:AMZN), digital payments specialist PayPal (NASDAQ:PYPL), e-commerce enabler Shopify (NYSE:SHOP), and merchant services provider Square (NYSE:SQ).

No one has invented a time machine, but what if I told you there was one company that provided many of those services, had a proven record of success, and still had the potential to make you a bundle of cash? Such a company does exist, and its name is MercadoLibre (NASDAQ:MELI). The Latin American e-commerce and payments providers stock has gained more than 2,000% since its IPO in 2007 -- and that could be just the beginning.

Hands holding credit card, typing on the keyboard of laptop.

Image source: Getty Images.

A Latin American e-commerce powerhouse

While that might sound like hyperbole, the company has been called the "Amazon of Latin America," and while its original business bore striking similarities, it has evolved into so much more. MercadoLibre is the largest e-commerce platform in Latin America, with sites in 18 countries in the region including Argentina, Brazil, Mexico, Colombia, Chile, Venezuela, and Peru. Based on unique visitors and page views, it's the market leader in each of the countries where it does business. It bears pointing out that this means MercadoLibre beats out Amazon in each of those 18 countries. 

The company was founded in 1999 and began life as an online auction platform, inspired by eBay (NASDAQ:EBAY), but over time added fixed-price merchandise (like Amazon), setting up online stores for merchants (like Shopify), providing point-of-sale payment devices and merchant financing (like Square), and creating a digital payment system (like PayPal).

MercadoLibre's growth has been astonishing. It has increased its registered users by more than 20% year over year in each and every quarter going back more than eight years. During the same time frame, the items sold on its platform have increased, on average, 29% year over year, while the number of payment transactions has grown more than 66%. MercadoLibre's payments business has recently accelerated, but more on that in a minute.

How would you like to pay for that?

One of the company's early challenges involved payments. Many of the countries in Latin America -- even now -- are largely cash-based. 70% of Latin Americans don't have a bank account and the majority of its residents don't have a credit card. To counter this stumbling block, MercadoLibre created a PayPal-like payment system called Mercado Pago, which allows customers to add funds to their accounts at a wide network of locations, including banks, pharmacies, and convenience stores. It also allows customers to pay cash for their purchase at any of these locations once the package arrives.  

What began as a way to resolve a customer pain point has become one of MercadoLibre's biggest businesses. As the success of Mercado Pago increased, the company marketed it as a payment solution to other digital merchants not doing business on its platform, and it eventually made the move to brick-and-mortar retailers. The payments business recently hit a tipping point, as payments generated off-platform exceeded payments made on its e-commerce site. In the third quarter, total payment volume reached $7.6 billion, up 66% year over year in U.S. dollars, and more than 94% in local currencies. Of that total, off-platform payments accounted for almost $4 billion. This has caused the number of payment transactions to soar, up 118% year over year, its second consecutive quarter of triple-digit growth.

A man sitting at the kitchen table typing on a laptop and smiling, while a woman puts a tea kettle on the stove in the background.

Image source: Getty Images.

MercadoLibre's payments success has been so extraordinary that it prompted a $750 million strategic investment from PayPal early last year, and the companies recently signed a far-reaching collaborative agreement. As a result, Mercado Pago will become an accepted payment method at PayPal merchants around the world and PayPal will appear as a payment option within Mercado Pago.  

Significant tailwinds

There are a number of societal and demographic tailwinds in the region that will drive MercadoLibre to even greater heights.

While e-commerce accounts for more than 10% of retail sales in the U.S., Latin America isn't nearly as far along the adoption curve, and digital sales represent just 3% of the region's total retail. Yet, Latin America is among the fastest-growing e-commerce markets worldwide, expected to increase by more than 21% year over year in 2019. This illustrates why e-commerce in the region still represents a huge opportunity.

A growing prosperity will also drive further sales. Latin America's middle class expanded from 33 million households in 2008 to 46 million households by 2018, growing to 26% of families. The economy is expected to continue its expansion in the region, which will likely expand the middle class even more. Greater prosperity leads to increased spending, and a growing number of those consumers are gravitating toward e-commerce -- right in MercadoLibre's wheelhouse.

Not without risk

It's important to note that investing in MercadoLibre isn't without risk. There have been a number of instances over the past decade when economic or political instability in the region caused a significant decline in MercadoLibre's stock.

Numerous countries in Latin America have endured political scandals, hyper-inflation, and even currency devaluation, and any of those risks could rear their ugly heads once again and represent a renewed threat to MercadoLibre's business.

A millionaire maker?

So, is MercadoLibre a millionaire maker stock? As with so many things, the answer is "It depends." Not only do I believe that MercadoLibre could easily double from its $33 billion market cap, but given its multiple demographic and technology tailwinds, the stock could eventually grow tenfold -- or more -- from its current level.

For most investors, that might not rise to the level of millionaire maker, but it could be a life-changing investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.