Through integration with Circle and Stellar, Tala customers will have access to USDC in Tala’s digital wallet, supporting asset storage, cross-border transfer and crypto-fiat exchange functionality. The partnership with Visa will provide Tala with the ability to issue wallet-linked Visa cards, allowing Tala customers to spend against their USDC balance at any of the 70 million merchants worldwide that accept Visa.
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As a result of the growth of stablecoins like USDC, “we were really interested to see how they might have the potential to help consumers in markets where they don’t have great access to financial services.” says Cuy Sheffield, head of crypto at Visa. . In December, the credit card giant partnered with Circle to help integrate USDC into Visa’s growing network of digital wallets.
Tala is a suitable partner for the cause. The seven-year-old Santa-Monica-based startup has provided more than $ 2 billion in credit to more than 6 million customers in Mexico, the Philippines, Kenya and India. Clients can obtain microloans, ranging from $ 10 to $ 500, through a smartphone app, regardless of their formal credit history. The company has raised more than $ 200 million from PayPal Ventures, RPS Ventures, and GGV Capital, among others.
The primary use case Tala hopes to drive with the crypto offering is to reduce the cost of remittances for its clients, says Tala CEO Shivani Siroya, who founded Tala after studying the impact of microcredit. in sub-Saharan and West Africa for the UN. In recent years, cryptocurrency remittances have become a popular way for migrant workers to send money across borders, often being faster and cheaper options than traditional financial services like Western Union.
The World Bank estimates the average percentage of transaction fees for cross-border remittances at around 6.51% in the fourth quarter of 2020. In contrast, Bitso, a leading cryptocurrency platform in Latin America, which manages around 2.5-3% remittances between the United States and Mexico (depending on the company), only charges a currency conversion rate, with an upper limit of 0.65%, and no deposit or withdrawal fees. Bitso announced today that it has raised a $ 250 million Series C to a valuation of $ 2.5 billion.
The partnership marks the first major crypto initiative for Tala, which recently began expanding its product line to provide a more comprehensive range of financial services to consumers in developing economies. During the pandemic, the company launched the Tala Rebuild Fund to provide 6-month loans at 0% interest to small businesses providing essential services. Additionally, Tala has made COVID-19 medical insurance available to all of its customers in Kenya at a subsidized rate.