Visa Partners With Fintech Startup Tala To Drive Crypto Adoption In DevelopingMarkets - TCR

• The finance sector’s Visa, Tala, Circle, and Stellar collaborate to drive crypto adoption among the underbanked population.
• The integration will begin its offerings with USDC stablecoin.
• Visa partnership will enable Tala users to issue wallet-linked Visa cards and spend their USDC balance at over 70M merchants worldwide.

Announced Wednesday, Visa (NYSE: V), the multinational financial services corporation, collaborates with a fintech startup, Tala, to avail access to cryptocurrencies for underbanked consumers. The merger includes additional partners Circle, the payment services company that created Centre, and the Stellar Development Foundation (SDF), a non-profit organization supporting Stellar and crypto XLM. The offering will begin with the U.S. dollar-backed, and the Centre Consortium governed stablecoin, USD Coin (USDC), which is supported by many blockchains, including Ethereum, Algorand, Solana, and Stellar. 

Post Collaboration Functionalities To Tala Users

Integrating with Circle and SDF, Tala users will gain access to USDC in Tala’s digital wallet, supporting asset storage, cross-border transfer, and crypto-fiat exchange functionalities. And the partnership with Visa enables them to issue Visa cards linked to the wallet, which lets them pay with their USDC balance at any of the 70 million Visa-accepting merchants worldwide. Cuy Sheffield, crypto head at Visa, says they want to witness the potential of stablecoins, like USDC, “to help consumers in markets” devoid of “great access to financial services.” 

Tala’s Vision Of The Merger

Tala, the microloan (between $10 to $500) through smartphone app lender that has supplied over $2 billion in credit to around 6 million customers across Mexico, the Philippines, Kenya, and India, is the most fitting partner for the cause, commented Forbes. Founded in 2011, the Santa-Monica-based startup aims to lower the cost of remittances for its customers, shared Tala’s founder and CEO, Shivani Siroya. Today cryptocurrency remittances, being a faster and cheaper option than traditional financial services, is a popular way for migrant workers to send money across borders.

The average percentage transaction fee for cross-border remittances by the World Bank estimates for the fourth quarter of 2020 is 6.51%. In contrast, Bitso, a leading Latin American crypto platform that oversees 2.5-3% of remittances amidst the U.S. and Mexico, charges only a currency conversion rate, i.e., 0.65% at max. 

Tala’s First Major Crypto Initiative

After deciding to expand its product suite to help consumers access the fuller scope of financial services and developing economies, the partnership marks Tala’s first major crypto initiative. Amid the pandemic, the firm launched Tala Rebuild Fund, offering 6-month loans to small businesses at 0% interest. Tala also availed COVID-19 medical insurance at a subsidized rate to its Kenya users.