Mercado Pago faces Argentina lawsuit over loan rates
Two consumers have sued Mercado Libre’s Mercado Pago unit in Argentine commercial court, alleging it charged annual interest rates above 1,300% on loans and seeking to halt the practice with an emergency injunction.
The case matters because it puts one of Latin America’s most important fintech lenders in the crosshairs of Argentina’s consumer-protection and class-action framework at a time when households are still leaning on short-term credit to bridge a weak economy. If the court allows the action to proceed as a class case, the dispute could extend beyond two borrowers to millions of users, with possible restitution covering charges collected over the last three years.
The complaint, filed by attorney Diego Espandín of the Asociación de Consumidores Financieros de la República Argentina, landed in Commercial Court No. 24 in Buenos Aires before Judge María Alejandra Doti. Espandín said the goal is to stop interest collection immediately through a precautionary measure, then pursue a broader refund of allegedly improper charges.
One example cited in the filing shows the scale of the dispute: a borrower who took out 8,000 pesos repaid 127,000 pesos. The consumer group said that implies an annualized rate above 1,300%, a level it argues is disproportionate even for Argentina’s high-inflation, high-rate environment.
For investors, the risk is not only legal but also economic. A ruling against Mercado Pago could pressure fee income, force recalibration of its credit product pricing and invite similar claims against other fintech lenders operating in a market where consumer borrowing has become a key revenue line. Mercado Libre has long used Mercado Pago to deepen user engagement and monetize payments and lending, so any curb on loan profitability would matter for margins.
The case also comes as Argentine courts have previously handled class actions against banks and some fintechs, which may improve the plaintiffs’ odds of getting the claim certified. If the judge grants the injunction, Mercado Pago could face immediate limits on interest collection while the broader case works through evidence, counterarguments and potential forensic accounting.
The next catalyst is the court’s first ruling on whether to accept the complaint and whether to freeze collections before the company responds. That decision will determine whether the lawsuit remains a narrow consumer dispute or turns into a broader test of fintech lending practices in Argentina.
| Entity | Gains | Losses |
|---|---|---|
| Borrowers/consumers | ▲Possible rate relief | ▼High loan charges |
| Mercado Pago/Mercado Libre | ▲None if injunction fails | ▼Interest income, legal risk |
| Argentine courts/regulators | ▲Consumer enforcement role | ▼Pressure to police fintech rates |
| Competitor lenders | ▲Relative pricing flexibility | ▼Sector-wide scrutiny |