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Hyperinflation meets tech: Cash-scarce Venezuela sees boom in payment apps

• https://www.yahoo.com

CARACAS (Reuters) - Widerven Villegas and his brother wash some 30 cars a day at a parking lot in Caracas. Despite charging less than 50 cents, nobody pays them in cash.

In tech hubs from San Francisco to Tokyo, payment is conveniently made through software on phones and watches on a routine basis. Amid a dire economic crisis in Venezuela a similar innovation is taking hold, though for very different reasons.

People from vegetable sellers to taxi drivers have registered to use mobile payment applications to attract customers who do not have enough paper money, which is in short supply due to soaring prices. The maximum daily amount Venezuelans can withdraw from cash machines is around 10,000 bolivars, around 4 cents at the black market exchange rate.

Venezuela's hyperinflation, one of the first of the digital era, is producing surprise winners in a tough business climate: small technology companies based in the crisis-stricken country.

"I accept transfers. I have Tpago, Vippo and almost all the applications out there!" said Villegas, 35, as he clutched a worn-out tablet and a basic cellphone.

"We don't handle cash because our clients don't have it," he added. "With the applications I use, I've got their money before they've even left the parking lot."

Without these apps, even simple transactions like tipping a waiter or paying for parking become nightmares. Still, banking websites and mobile apps often crash, as the outdated telecoms infrastructure cannot cope with surging demand.

'MIRACLES'

Requests for a taxi on the Nekso application, somewhat similar to Uber, doubled last year, according to its head of strategy Leonardo Salazar, speaking at the company offices that boast a Playstation console and ping pong table.

Vippo, a Caracas-based payment app, saw a more than thirty-fold increase in the number of people registering last year. Citywallet, born as a pilot project for online parking payments at a private university, was extended to several shopping centers.

"The cash crisis is getting worse every day but is giving us the opportunity to capture more and more transactions with our solution," said Citywallet co-founder Atilana Pinon, 29.

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