Citi Perspectives 2024 E-commerce Edition

40 | Services Citi Perspectives Best Practice and Innovation During 2020, Mercado Pago experienced exponential growth in digital transaction volume — partly driven by COVID-19— rising from 20.5 million transactions (from January to August 2020) to 198 million (from January to August 2021). In response to this unprecedented e-wallet transaction volume, Citi completely reengineered the existing internal process in order to better support this substantial increase driven by shifting market demand. The Results Citi played an instrumental role in enabling MELI to advance its digital journey in the Argentinian market, allowing the business to effectively manage massive growth in transaction volume. As a result of the strong partnership between MELI and Citi, the company is well positioned to meet the future needs of the marketplace. Key benefits of the Citi solution include: • Implementation of innovative and robust structure, allowing MELI to stay ahead of market trends • Online, real-time payment processing through 24/7 instant payments • Interoperability between e-wallets and bank accounts • Payment traceability • Improved straight-through processing • Enhanced client experience • Increased operational capacity, reducing turnaround time • Minimization of manual intervention • Account validation features and minimization of rejected transactions • Avoidance of significant operational costs and increasing scalability to support future growth The Challenge As far back in 2018, the local economy in Argentina had already begun transitioning to a cashless marketplace, however the arrival of the pandemic in 2020 caused transaction volumes to skyrocket at MELI, as customers increased their reliance on e-commerce. This exploding demand created unique challenges for the company’s treasury team. To address this burgeoning growth, MELI turned to long- time banking partner, Citi, to help implement an innovative and collaborative project, connecting MELI’s banking and e-wallets ecosystems to ensure a leading customer experience. The solution MELI partnered with Citi to implement instant payments with 24/7 availability, allowing Mercado Pago to achieve a straight- through, real-time processing with the company’s cash-in and cash-out flows. Additional functionality of the Citi solution included: • Interoperability in QR payments • Request to Pay • Online real-time wire transfers from bank account to e-wallet, e-wallet to e-wallet, and e-wallet to bank account