What happened
Thursday's trading session was very kind to South American e-commerce company MercadoLibre (MELI 3.09%). Its share price shot more than 2% higher, trouncing the S&P 500 index's 0.8% gain, on news that it might soon be teaming up with a social media titan.
So what
In an interview with Reuters, MercadoLibre chief financial officer Pedro Arnt said that his company was in discussions with Meta Platforms (META 0.43%) to process payments for the latter's WhatsApp secure messaging service in Brazil. According to Arnt, MercadoLibre is in the testing phase to be one of the companies providing this type of fintech service for the app.
Meta, which also operates Facebook, said in November that it would allow WhatsApp users to directly contact and to buy products and services from businesses within the app's popular chat feature. Meta identified Mercado Pago, MercadoLibre's financial ecosystem, as one of the entities with the technical ability to provide in-app transaction services.
Arnt did not provide any estimates for how much revenue a potential WhatsApp tie-up could bring in for his company.
Now what
Landing the WhatsApp job for MercadoLibre, even if it ends up being one of several solutions providers, would be quite a win for the company. Brazil is by far the most populous country in Latin America, with more than 216 million souls living within its borders. Its citizens are also very active users of WhatsApp and very likely to take advantage of convenient in-app purchasing options. It's little wonder that investors were excited about this news.
