Visa Partners with Fintech Startup Tala to Drive Cryptocurrency Adoption in Emerging Markets

Easier access, starting with USD Coin, a stable currency

Visa Partners with Fintech Startup Tala to Drive Cryptocurrency Adoption in Emerging Markets

Visa today announced a new partnership with Tala, a provider of digital financial services in emerging markets, with the goal of providing easier access to cryptocurrencies for unbanked consumers, starting with the stablecoin USD Coin (USDC). The partnership will also include Circle, a founding member of the Centre Consortium, the governing body of USDC, and the Stellar Development Foundation, which oversees the XLM token.

Through integration with Circle and Stellar, Tala customers will be able to access USDC through the Tala Digital Wallet, which supports asset storage, cross-border transfers and cryptocurrency-fiat currency exchange capabilities. The partnership with Visa will enable Tala to issue Visa cards associated with the wallet, allowing Tala customers to spend their USDC balances at any of the 70 million merchants worldwide that accept Visa.

As stablecoins like USDC grow, Cuy Sheffield, head of Visa’s crypto division, said, “We’re really interested to see how they can help consumers in markets where they don’t have access to a lot of financial services.” Last December, credit card giant Visa partnered with Circle to drive the integration of USDC into Visa’s growing digital wallet network.

Tala is the right partner to drive this endeavor. The Santa Monica-based, seven-year-old startup has provided more than $2 billion in credit to more than 6 million customers in Mexico, the Philippines, Kenya and India. Its customers can get small loans of $10-$500 through a smartphone app, regardless of their official credit history. The company has raised more than $200 million from PayPal Ventures, RPS Ventures and GGV Capital, among others.

The main use case Tala hopes to drive through its crypto services is to reduce the cost of remittances for its customers, said Shivani Siroya, CEO of Tala, who founded Tala after working as a United Nations analyst studying the impact of microfinance in sub-Saharan Africa and West Africa. A popular way to send money across borders, often faster and cheaper than traditional financial services such as Western Union and MoneyGram.

The World Bank estimates that the average percentage of transaction fees for cross-border remittances will be about 6.51 percent as of the fourth quarter of 2020. In comparison, Latin American cryptocurrency platform Bitso processes about 2.5% – 3% of remittances between the U.S. and Mexico, charging only a currency conversion rate (capped at 0.65%) and no deposit or withdrawal fees, according to the company.

The partnership marks the first major encryption initiative for Tala, which recently began expanding its product suite to provide more comprehensive financial services to consumers in developing economies. During the New Coronavirus pandemic, the company launched the Tala Rebuild Fund, which provides zero-interest, six-month loans to small businesses that provide essential services. In addition, Tala offers COVID-19 health insurance at subsidized rates to all customers in Kenya.

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