Ualá, the Buenos Aires-based fintech backed by George Soros, Steve Cohen and Tencent Holdings, will begin offering no-fee credit cards Friday to its five million customers in Argentina.
Six years after the company’s founding, its credit card service will be gradually rolled out to users in Argentina, following a launch of a similar product in Mexico earlier this year, Chief Executive Officer Pierpaolo Barbieri said in an interview.
While the move to introduce a credit product comes with risks as Argentina confronts 143 percent inflation and some of the world’s highest interest rates, Barbieri said he remains determined to continue expanding in the company’s home territory. About 60 percent of Argentines don’t have a credit card, central bank data shows.
“We’re very bullish about our Argentina operations,” the executive said. “Despite the macroeconomy, which always gives you excuses not to do things, we’re confident that this is a product that people are going to want, and that is part of the path to becoming the largest financial player in the country, which is our goal.”
With 1,500 employees, Ualá has seen “hundreds of thousands” of customer sign-ups per month for its credit card in Mexico this year, Barbieri said, declining to provide a total figure. He expects “millions” of registrations in Argentina since its customer base already makes up roughly one fifth of the country’s economically active population.
Ualá’s biggest competitor in Argentina is the fintech arm of e-commerce giant MercadoLibre Inc, which has over eight million users. As of September, Mercado Pago held US$1.4 billion in its customers’ peso-denominated wallet accounts, through which it also provides a physical debit card to users.
Ualá’s Mastercard-operated credit service, which won’t charge any opening, maintenance or renewal fees, will be rolled out via its subsidiary Uilo, formerly known as Wilobank.
Barbieri emphasised that the new product will provide instant global push notifications on its mobile app that will let users see the exchange rate they received when making purchases abroad or in foreign online merchants. Given Argentina’s several different exchange rates, that characteristic will be key to users, he said.
Despite Argentina’s economic volatility, Barbieri confirmed the company is still on pace to reach break even in its home market by the end of this year.
“That’s still the target and we’re on track,” he said.
by Patrick Gillespie, Bloomberg