Sunday, July 12, 2020

Uphold users in Venezuela will be able to pay bills in dollars and euros with bitcoin

Key facts:
Cryptocurrencies can be exchanged for dollars at Uphold and then make local purchases.
In the course of July the service could be enabled in two Venezuelan establishments.

A new alternative of payments with dollars plans to make an appearance in Venezuela, after the Uphold platform recently agreed to an alliance with the Agile Fintech app.

Local merchants will now be able to accept foreign currencies for the purchase of products, just by scanning a QR code from the Agile mobile application. In addition to this service, each of the payments made on the new platform may be financed from Venezuela with bitcoin and those cryptocurrencies enabled at Uphold. This is how Robin O ’Connell, Uphold's chief revenue officer, comments exclusively for Crypto News.

O ’Connell states that, in a near stage of this project, Agil and Uphold plan that bitcoin also become a payment alternative enabled for residents of Venezuela. In this way, Uphold users will be able to directly access their cryptocurrency savings and make national purchases.

In a first stage, users will have access to their balance in dollars and euros. Also, cryptocurrency users will be able to finance their dollar account through an exchange operation at Uphold. We are already analyzing for a next stage, the possibility that users directly access from Agile their cryptocurrency balances and make payments.

Robin O ’Connell, Uphold’s chief revenue officer.

Uphold has been studying the Venezuelan market for more than a year to introduce a payment solution that can be useful for its citizens, who must deal daily with a hyperinflationary economy. Likewise, the financial services platform anticipates that Venezuela will be the first country of many in Latin America that will benefit from the association with Ágil Fintech, says Robin O ’Connell.

Venezuela pays in dollars and euros with Uphold

Agile Fintech is described on its website as a digital payments platform that has a license to operate granted by the authorities of the United States, the United Kingdom and the European Union (EU).

The platform is active in 35 countries, turning smartphones into points of sale for the payment of goods, services and payroll cancellation. Merchants only have to join Agile to receive a QR code adapted to their business, which will allow them to accept payments in foreign currencies.

The startup works through an application, which can be downloaded by Google Play and the Apple App Store. It also indicates that users can receive transfers of dollars and euros without the need for an account abroad, which would facilitate the use of these currencies in Latin American countries.

                                                                                   Uphold decided to partner with this startup to offer a payment solution in the Caribbean nation because it has an infrastructure that can adapt to the needs of this market. "Venezuela is going through a special situation in the region and Agile is taking advantage of that opportunity to offer and test this new service model," said Robin O 'Connell.

                                                                                   The alliance agreed by both companies will be based on “a synergy” between services, since Agile will allow users to access their dollar balance in Uphold and carry out P2P transactions at the moment. In addition, each merchant who joins the solution will receive a product tailored to their needs, describes the chief revenue officer:

                                                                                    The Agile team will tailor the solution to each merchant, so each teller will receive a notification, which is much less cumbersome than the current process. It will have a very easy system for payments in premises, at the time of collecting. The client will only have to register in our URL (web app), which will be launched soon, and link their Agil account to their Uphold account. Currently in Venezuela, there are no alternatives with these characteristics and benefits.

Robin O ’Connell, Uphold’s chief revenue officer.

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O ’Connell describes Agile as“ a service stratum ”, since it connects the balance in foreign currencies that is held in Uphold with the possibility of making physical payments. In this way, users can use their dollar savings to cancel goods and services.

People who own bitcoin and other cryptocurrencies in their Uphold account will be able to make an exchange to dollars to take advantage of this payment service in Venezuela. Already with an active balance in dollars, the user only has to scan the unique QR code of the store and enter the amount to transfer.

Once the payment is finished, the cashier of said business will receive a notification of the transfer, which allows to generate a receipt. The company may register said receipt in its data source and deliver the merchandise to the client. "We estimate that this process will take between 7 and 10 seconds," says O ’Connell.

An unprotected population

Dollars, euros, bitcoins, a kilo of rice? All of these are payment alternatives that Venezuelans have begun to use on a daily basis as a substitute for the bolívar, the national currency.

Venezuela Uphold bitcoin
Robin O ’Connell is the chief director of revenue and alliances for Uphold.
The lack of cash and the hyperinflationary economy leads the citizens of the Caribbean country to have to cope with foreign currencies, which allow them to protect the value of their properties and wages against the constant devaluation of the bolivar.

The dollarization of the market brought with it another problem: dollars and euros are also scarce physical goods. Furthermore, in Venezuela there is still no stable and inclusive infrastructure that allows the transfer of foreign currencies, which further limits the payment of goods and services with dollars.

As if that were not enough, it is an essential requirement for the safe transfer of these currencies that their owners have a foreign account where they can insure their savings. As a result, a large part of the population is left without access to alternative payment methods other than the bolívar and cash dollars.

Faced with the emergence of the dollar as the strong currency in Venezuela, services such as Zelle began to be used with increasing frequency, which caused a congestion of transactions that led to the suspension of its operations. On the other hand, alternatives such as Paypal and Payoneer have failed to penetrate common use, although they are widely used by freelancers.

In the midst of this conjuncture, Robin O ’Connell points out that Uphold saw an opportunity to introduce a new payment solution in Venezuela that can solve this problem.

The Venezuelan economy faces a problem of hyperinflation and the local payment system has moved towards the dollar. Most of these transactions are done in cash, which creates many problems for consumers and businesses. We have been working on this for more than a year. It was clear to us that there was a need there, and the mass adoption of Zelle was unfeasible and with little scalability. The subsequent developments of Zelle had nothing to do with our launch, although they represent a clear opportunity.

Robin O ’Connell, Uphold’s chief revenue officer.

Uphold has been in negotiations with two Venezuelan retail chains for the adoption of this payment application, and they hope to have satisfactory results with two other companies with whom they have also discussed the use of this platform.

"We hope that in mid-July 2020, customers will make purchases with their Uphold balances using the Agile application," says the chief director. In addition to these plans, Uphold hopes that in the near future the payment solution will achieve independence from the Venezuelan market and bet on other Latin American countries.