Image credit: Ripio
Ripio, the Argentina based startup originally developed as BitPagos, has secured over $1.9 million in venture capital to expand their innovative financial inclusion program in South America. Initially planning to focus on Argentina, Brazil, and Mexico, the company has launched a number of financial inclusion tools, including digital wallets based on cryptocurrency. The stated goal of the startup is to provide innovative consumer-facing financial services.
The digital bitcoin wallet is an Android based app, and is seeking to provide micro-credit in regions in which the majority of people do not have credit cards or access to credit. With an internal system based on spending and payment through the digital wallet, or evaluation through demographic factors with short payoff times, the company is offering an alternative to credit cards. They are also encouraging the development of online commerce in South America, which is estimated at only 2% of consumer purchases. Digital wallet users can change local currency for bitcoin, readily accepted by online merchants.
Major venture capital investor Huiyin Blockchain Venture, based in China, believes they share the future-looking aims of Ripio for inclusion and support of a global digital economy. Other venture capital groups supporting the startup include Boost VC, Digital Currency Group, and Draper VC.
For online commerce to be successful in all of South America, however, the geographic isolation of the rural poor, and the lack of infrastructure such as roads and a transportation system, will limit development. Several programs to address the needs of the rural poor noted that government programs to encourage savings by distributing cash transfers to savings accounts was not successful, as most people withdrew the entire disbursement in cash as soon as it appeared in the savings account. The theory was that lack of access to transportation, and the geographic distance to the physical banks or ATMs, encouraged people to access their cash when they could. Evaluations of the efficacy of branchless banking systems by accessing savings at point of sale merchants are ongoing.
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