“We accept Zelle.” That is the most repeated phrase in Venezuela and you can hear it at a hot dogs, a butcher shop or a night bar. Precisely because of that popularity, the rumor of a possible closure of the platform in the South American country, unleashed a wave of tweets and turned the application into a trend. It was true? Not that much.
On June 5, Wells Fargo bank announced to its clients in Venezuela that they would not be able to use the Zelle platform from June 26. This does not mean the end of this application in the country, simply for users of this banking institution, whose accounts are domiciled in Venezuela.
“As of June 26, @WellsFargo eliminates access to Zelle to customers with registered addresses in Venezuela,” Venezuelan journalist Arnaldo Espinoza, an expert on the source of technology, tweeted.
Espinoza told CNET in Spanish that “Zelle is a widely used tool in Venezuela for the payment of things in retail. Ecoanalítica [empresa de análisis económico en Venezuela] ensures that 12 percent of transactions made in the country are made through that platform, which is very high. However, in Venezuela there are people who have their accounts in institutions other than Wells Fargo. “
Espinoza consulted Wells Fargo about this measure and they responded as follows: “Wells Fargo conducts ongoing reviews of your account relationships to ensure that our products and services, including Zelle®, are used as intended.”
According to Espinoza, the banking institution could have made that decision because in Venezuela “the tool is not used as it should. Zellle, the same application says it, is for close people, friends, not to be paying in stores or pay off debts and that’s what’s going on here. “
CNET en Español sent several questions to Early Warning Services, Zelle’s network operator, about the service in Venezuela and received the following response: “Zelle® is a payment network based in the US In the that consumers can only sign up using a US mobile number or email address and a US bank account. “
For now, as you can read on the Venezuelan portal Efecto Cocuyo, only direct Wells Fargo customers in Venezuela are affected, since they cannot “mobilize the money in their accounts quickly and without paying associated commissions.” But another group of Venezuelans who used the bank account of their partner or a close relative to receive payments for the sale of their products and also for their services are also affected.
However, some Venezuelan professionals, such as the economist Asdrúbal Oliveros, fear that other institutions will follow this path. “For some time now I have been insisting on the possibility of this type of measure. It is probable that more banks will join,” wrote the also director of @Ecoanalitica on Twitter.
Why is it so popular in Venezuela?
“Here they accept Zelle even in supermarkets,” says Adriana Quintero, a housewife, mother of two daughters, who lives in the capital, Caracas, and survives Venezuelan hyperinflation, thanks to the fact that she opened an account at a bank in the United States. , in the year 2000. In this account, the relatives deposit money and she uses Zelle for the acquisition of daily goods.
It is a platform for making monetary transactions. To be possible, it requires that the sender and receiver have bank accounts in the United States and that both be registered with the service. The transfer takes a few minutes between users. This platform has its own app on Android and iOS. You can even enter the page and perform the operation from there.
“Zelle is already like a mobile payment in Venezuela. In our business, 40 percent of customers canceled with this platform before everything was paralyzed by the coronavirus
“explains the administrator of a travel agency, which declares CNET in Spanish as anonymity because the laws in this country are not clear on the legality of the use of transactions in foreign currency.
However, it is in the public domain that the dollar rules in Venezuela. According to a study by the Ecoanalítica firm, in 2020, 64 percent of purchase-sale transactions are made in foreign currencies. In the previous study, conducted in October 2019, this percentage was 54 percent.
“Of the transactions that were canceled with currencies either in cash or by some means of payment such as Zelle, the currency most used is still the dollar with 55.7 percent of the total, followed by the peso with 6.3 percent and 1.3 percent in euros While 81 percent of the purchases were in cash, 18.6 percent with Zelle or Xoom and 0.4 percent via bank transfer, “says the Ecoanalítica report.
“I heard from Venezuelans themselves that this app existed and I have been using it for almost a year,” says Gabriel González, a 29-year-old journalist, who returned to Venezuela at the end of 2018 after spending a year in the United States. “I have an account at Bank of America and this bank is already integrated with Zelle. Basically you transfer from one account to another. You only need the email address of the beneficiary and now. It is practical and safe, but the most important thing is that you do not pay commission” adds González.
Due to hyperinflation (200,000 percent according to the IMF) and the poor value of the bolívar, local currency, citizens and merchants coexist in a parallel economy where it has become common to carry out transactions in a more stable currency, such as the dollar.
But for those people who do not generate income in foreign currency, this is counterproductive. “With a minimum salary that remains at 250,000 bolivars, a pensioner in Venezuela only earns US $ 1.2 a month. With that, you cannot buy even a dozen eggs,” explains El Interés, a site specialized in Venezuelan economy, which continues today. to day the increase of the dollar.
In addition to this situation, the local currency has disappeared. Before the pandemic, 20,000 bolivars could be withdrawn. “But with that you couldn’t buy anything,” says José Iturralde, an employee of a technical services company, who lives in Maracaibo, once a city prosperous due to the oil economy. Hence, app payments or transfers have become so common.
Andrea Villanueva and Manuela Aristiguieta, for example, chatted one night in a very busy pizzeria in the eastern sector of Caracas. There, before sitting down, the managers informed them of the payment methods. The first was the Zelle app. “I am used to canceling in that place that way,” says Aristiguieta.
What you hear the most when you talk to Venezuelan users who use Zelle is: “You don’t pay commission.” For a country where every dollar counts, it is a great advantage considering that transactions through banks can cost an extra fee, which can vary between US $ 20 and US $ 30 per operation.
Víctor Álvarez, economist and researcher, explained to the Pulso website, that the cause of this phenomenon is that the bolívar has lost its three basic functions as a currency: as a unit of price, eliminated by the constant variations in costs; as a means of payment, disappeared by the amount of tickets needed to buy any product, however simple it may be; and as a reserve of values and savings, canceled by the continuous devaluation of the currency.
“Since purchasing power is not worth it, people tend to protect themselves by taking refuge in the dollar,” says the also university professor.
Since Venezuelans began making exchanges in dollars, there have been several options that have appeared in the market. Mercadolar appeared in 2016, an Internet page where users can exchange dollars for Venezuelan bolivars and vice versa. But other platforms existed before, such as Neteller, Skrill and Paypal.
The social communicator, Gabriela Yánez, in the article “Change digital dollars in Venezuela and not die trying”, written in 2018, showed the dominance of Paypal in the Venezuelan market.
“Once you have your account verified, every time you send money, or they send you, there is a commission of 5.4 percent plus US $ 0.30 of the transaction amount. Then you have to agree on whether you assume the commission when sending or buy, or if the counterparty assumes it. ” And that’s where Zelle has beaten her competitors by failing to charge commissions.
Zelle reported in January 2020 that in the fourth quarter of 2019, it processed “230 million transactions, totaling $ US56 billion in money sent, an increase of 14 percent and 17 percent quarter-over-quarter, respectively.” In the same press release it is said that the payment values, year after year, increased 57 percent, while the volume of transactions increased 72 percent. There are no official numbers on how much the exchange between Venezuelans has impacted Zelle
In commercials, the brand emphasizes that it is no longer necessary to go to the bank to move your money:
But not everything is rosy. According to the Techcrunch website, “Zelle users are discovering the hard way that there is no fraud protection.” Although the outlet does not review a large number of cases, it does report a couple of online scam experiences, when users tried to buy tickets to a show: they deposited the money, but did not receive the product.
A platform spokesperson responded to Techcrunch about these cases: “Consumers should not use Zelle to transact with people they do not know and / or are not sure of getting what they paid for, for example, items purchased from a bidding site. or online sales, “and said:” Zelle is not responsible for goods or services that are not received or received but do not meet expectations. “
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