According to Moody’s Ratings, financial services have become the main drivers of growth and profitability for MercadoLibre and StoneCo, fundamentally reshaping their risk profiles. As both firms evolve into full-scale financial platforms, their strategies increasingly center on credit expansion — particularly in Mexico — where SME financing represents just 1% of GDP. While proprietary real-time payment data offers a key edge in risk assessment, deeper exposure to regulated markets is raising compliance demands and sensitivity to credit cycles.
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Financial services have emerged as the primary drivers of future revenue and profitability for both MercadoLibre (MELI) and StoneCo, according to a new issuer in-depth report from Moody’s Ratings. While both companies maintain distinct business models and geographic footprints, they are simultaneously accelerating their fintech strategies to deepen customer engagement and enhance long-term enterprise value.
Growth Potential
For MercadoLibre, currently the leading online marketplace in Latin America, credit and fintech operations have already reached substantial scale. In 2025, fintech activities — comprising payment acquisition and credit services — accounted for approximately half of the group’s total revenue. This ecosystem-driven model leverages deep integration with MELI’s e-commerce platform, enabling superior data-driven risk pricing and more efficient customer acquisition compared with non-integrated fintech competitors.
The growth opportunity in Mexico is particularly pronounced due to a significant credit gap. Moody’s notes that SME credit in Mexico represents only about 1% of national GDP, a stark contrast to the 9% observed in Brazil. This disparity underscores a substantial untapped market, largely underserved by traditional banks that remain cautious toward segments exposed to economic cycles and lacking formal credit histories. To capitalize on this, MercadoLibre is actively pursuing digital banking licenses in Mexico and Argentina to expand its product suite and strengthen its regional competitive positioning.
StoneCo, while focused entirely on the Brazilian market, is following a similar trajectory by repositioning itself from a payments provider to a broader financial services platform. This strategic shift is critical for maintaining competitiveness against bank-affiliated rivals. Although its credit revenue currently accounts for only 5% of total income, Moody’s expects this segment to represent a growing share of Stone’s revenue mix as its lending operations scale.
Data-Driven Risk Management
The expansion into credit services inherently reshapes the credit profiles of both firms by increasing leverage and elevating asset risk as a central factor. However, both Stone and MELI hold a significant informational advantage over traditional lenders: access to real-time transactional data.
By utilizing sales activity data to inform credit models, both companies can monitor asset quality with a level of precision that surpasses conventional underwriting approaches. Furthermore, both firms employ contractual repayment structures in which loan installments are automatically linked to a percentage of a merchant’s sales, facilitating collection and mitigating default risk.
The report highlights key differences in their credit portfolios:
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StoneCo: Primarily targets small and medium-sized enterprises (SMEs) with working capital loans secured by future receivables. Its portfolio is characterized by an average loan size of approximately US$7,000 and an average duration of eight months.
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MercadoLibre: Operates at a larger scale with a focus on unsecured consumer loans and credit cards, resulting in structurally higher delinquency rates relative to Stone. Its average loan is significantly smaller, at US$356, with a short duration of 3.6 months.
To mitigate these risks, both companies maintain adequate capital buffers and strong margins. As of December 2025, credit loss provisions as a percentage of gross loans stood at 25% for MELI and 14% for Stone.
Diverging Funding Strategies
A critical component for the sustainability of these fast-growing credit businesses is funding diversification. While both companies hold licenses to accept deposits in Brazil, their approaches to deposit utilization differ materially.
Stone is increasingly relying on granular customer deposits to replace institutional funding, which is often sensitive to market confidence. This shift is viewed as credit-positive by Moody’s, as it provides a more stable and resilient funding base across economic cycles. By December 2025, deposits accounted for 16% of Stone’s total assets.
Conversely, fractional-reserve banking is not central to MercadoLibre’s funding model. Instead, MELI allocates deposits gathered through its digital wallets — which primarily support user engagement rather than core balance sheet funding — to conservative assets such as foreign government debt and money market funds.
To finance its fintech growth, MELI relies heavily on the securitization of credit card receivables and loans through special purpose entities (SPEs) in Brazil, Mexico, and Argentina. This dependence on market-based securitization increases sensitivity to investor risk appetite and underlying asset performance.
2026 Outlook
Despite strong growth prospects, both firms face headwinds from a cooling macroeconomic environment. Slowing economic activity in Brazil and Mexico is already impacting total payment volumes (TPV) in the retail and service sectors where Stone and MELI’s clients operate. Elevated interest rates are also expected to pressure borrowers’ repayment capacity over the next 12 to 18 months.
Furthermore, as these companies transition toward more traditional banking functions, they face increased regulatory complexity. Operating in more heavily regulated environments will likely raise compliance costs and operational risks. For MercadoLibre specifically, obtaining digital banking licenses in Mexico and Argentina will bring its operations under stricter regulatory scrutiny, particularly regarding capital requirements, provisioning standards, and risk management frameworks.
Ultimately, the ability of these technology-driven financial platforms to sustain their superior profitability — which currently exceeds that of traditional Latin American banks — will depend on their capacity to balance credit expansion with disciplined risk management and consistent access to diversified, low-cost funding sources.
