This Isn’t a Bank vs Fintech Story Anymore. Nubank’s Real Fight Is with Mercado Pago.
Traditional banks are losing ground. Fintechs are growing. But only two players: Nubank and MercadoPago, are shaping the future.
For the past decade, there's been an ongoing debate in Latin America about whether Nubank will ultimately win against traditional banks or not. The Brazilian Neobank was positioned as the consumer-friendly alternative to traditional giants like Santander, Itaú, and BBVA. What people don’t see is that traditional banks have lost already. The war is over.
With over 118.6M customers across Brazil, Mexico, and Colombia, and 4.5M new users in Q1 2025 alone, Nubank is now the largest digital bank outside Asia. It has reached 59% of Brazil’s adult population, largely through product-led virality and a world-class user experience (Reuters).
Its financial performance backs that up: Q1 2025 revenue hit $3.2B USD, with an adjusted net income of $606.5M USD, up 37% year-over-year. Its operating efficiency is unparalleled: its cost-to-income ratio is under 35%, while legacy banks average 60–70%. Customer acquisition costs remain under $1/month per user (Nubank).
On the other hand, traditional players, by comparison, are stuck. Their cost structures are bloated, their tech stacks fragmented, and their brand relevance among Gen Z is practically nonexistent. Nubank is on track to surpass Santander Brazil in total retail customers by 2028.
The Real Threat: Mercado Pago
While Nubank may have outgrown its banking rivals, the real competition is emerging from an entirely different category: Mercado Pago.
What started as a payment processor for Mercado Libre has become one of the most powerful embedded finance ecosystems in the region. As of early 2025, MercadoPago serves over 64M monthly active users, a 31% increase year-over-year (PYMNTS).
In 2024, it processed over 11.3B transactions, with its credit portfolio growing by 75%. Unlike Nubank, which must compete for every new user, MercadoPago already lives inside Latin America’s dominant e-commerce platform. Users don’t need to download it, they inherit it through behavior.
Its edge lies in distribution and integration. Payments, credit, savings, insurance, all embedded into one seamless consumer journey. Meanwhile, Mercado Pago is actively pursuing banking licenses across Brazil, Mexico, and Argentina, quietly building a full-stack challenger that looks nothing like a traditional bank, and isn’t regulated like one either.
A Glimpse of 2030: Platforms, Not Banks
By 2030, Latin American financial services will no longer be dominated by traditional banks or isolated neobanks. Instead, we’ll see a three-tier structure:
At the top: Nubank and MercadoPago; technology-first platforms with massive reach, brand equity, and product breadth.
In the middle: regional fintechs like Ualá (Argentina), Albo (Mexico), and Clip; serving specific verticals or demographics with local agility.
At the bottom: traditional banks, surviving through sheer asset scale and regulatory compliance, but declining in relevance.
The real shift is not only about who offers the best mobile app or credit card. It’s about who can own the most financial moments in a user’s life, from first payments to investments, loans, and insurance, delivered frictionlessly and invisibly.
And right now, only two players are executing at that scale.
What Nubank Must Do Next
To keep pace, Nubank must double down on ecosystem expansion. That means deeply integrating services as lending, wealth management, and insurance into its core user experience. It also needs to secure regulatory flexibility in new markets like Mexico and Colombia, ideally before Mercado Pago completes its own full-stack journey.
Strategically, Nubank may need to consider some possible acquisitions. Startups like Ualá offer localized user bases, operational licenses, and cultural fit, all of which could accelerate its reach faster than organic expansion.
But most importantly, Nubank must shift its mindset. It’s no longer the challenger. Instead, it’s the incumbent in a new arena, where the real threat isn’t a bank, but an ecosystem that customers never consciously log into, because it’s already embedded in their lives.
Conclusions
The central question is no longer “Can Nubank beat Santander?” Because that has already been answered.
The real question is: Can Nubank evolve fast enough to outbuild a competitor that never wanted to be a bank to begin with?
In Latin America, the future of finance won’t be decided by account types or card designs. It will be decided by who owns the infrastructure of trust, seamlessly integrated into the lives of 200+ million digital-first users.
And right now, the race is down to two.
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