With inflation at 2,500%, Venezuelans have been quick to adopt alternatives to cash.
Struck by hyperinflation and cash insecurity, Venezuela is leading Latin America in the use of digital payments, according to new data shared with Rest of World by Colombian fintech company Treinta.
Out of 10 million transactions across 17 countries in Latin America over the course of a six-month time period, Treinta found that 28.6% were conducted digitally in Venezuela, compared to an average of 5.93% in the rest of the region.
Even as homegrown financial technology companies in the region like Clip and Addi try to shift countries like Mexico and Colombia away from cash transactions, the data shows that Venezuela is far and away ahead of the region in adopting digital tools. Treinta’s data breaks these into two main categories: transfers and card payments.
Part of the reason for digital payment adoption is the country’s ongoing economic crisis: The national currency, the bolívar, has collapsed with more than a 2,500% increase in inflation over the last year alone.
In 2019, Venezuelans began to adopt the U.S. dollar as their primary currency. The government of Nicolás Maduro facilitated the shift through banking regulation that allowed for dollar-based accounts. As of June of this year, nearly 70% of transactions were conducted in dollars, according to the economist Luis Vicente León.
Source: LEO SCHWARTZ | restofworld.org