Where cash is hard to find, therein lies boon and bumper crop for digital payments.
Reuters reported that in Venezuela, the economic crisis has fostered an embrace of electronic payments, done via mobile device. The newswire stated that everyone, “from vegetable sellers to taxi drivers,” has gotten on board with mobile phone applications to help ease payments from their customers, who find cash hard to come by. Hyperinflation has made hard currency scarce — at the same time, people are only allowed to withdraw 10,000 bolívars daily, which is worth all of four pennies, said the newswire.
Anecdotally, Reuters offered a scene where a car wash business stated that it accepts transfers and payment apps, including Tpago and Vippo, among others, with a source quoted as saying that “we don’t handle cash because our clients don’t have it. With the applications I use, I’ve [received] their money before they’ve even left the parking lot.”
Some numbers bear out the enthusiastic adoption of digital payments. The newswire noted that Nekso, an app that helps summon taxis, has seen a doubling of requests. Vippo, a payments app, has seen a 30-fold boost in the number of people who registered throughout the past year.
And yet, those frenzied requests and payments have a bit of a downside, as telecom infrastructure cannot handle the demand. Crashes (of the tech variety) abound, said Reuters.
Beneficiaries include the tech firms themselves, as developing new apps is not capital-intensive, due to the fact that salaries are relatively low for tech jobs that include coding, and utilities such as electricity are nearly free. Against that backdrop, 18 banks have launched payment apps for consumers.
The country’s central bank has also slowed down the rate of production for bank notes as inflation has risen to an annual quadruple digit rate, said Reuters.