Digital Lender Tala to Enable 70 Million Visa Merchants to Accept USDC
In a recent press release, Tala—a digital lender with a focus on emerging markets—announced a partnership with Visa to help those who are underbanked participate in the crypto economy. As part of the deal, an estimated 70 million merchants who accept Visa, will soon be accepting USDC.
With the assistance of Tala’s other partners, Circle, and Stellar Development Foundation, the company will build and provide tools that assist underbanked consumers to actively use cryptocurrencies in their day-to-day lives. They will begin by implementing the use of Circle’s own USDC.
Bringing Crypto to the Underbanked
Tala, Visa, Circle, and the Stellar Development Foundation are embarking on a mission to increase adoption of crypto among those who are underbanked. These are people who have access to traditional financial services such as bank accounts, but who rely on alternative financing options such as pay-day loans or prepaid debit cards, and have poor (or no) credit. For underbanked individuals, crypto is an extremely useful tool as it represents a p2p alternative to fiat that allows them to make economic decisions with ease.
Tala users will be able to access USDC via their Tala wallet, allowing them to store and trade, as well as offer USDC-to-fiat exchanging. This is a huge development for underbanked individuals as it allows them to efficiently swap crypto around the globe in a decentralized manner without having to worry about intermediaries getting in the way or halting the process.
Importantly, the partnership also enables Tala users to link their USDC wallets to Visa cards. This offers enormous advantages, as those who are underbanked often struggle with crypto-to-fiat conversions due to KYC—and otherwise have limited access to fiat.
Tala’s announcement reads,
“Tala’s partnership with Visa will enable Tala to offer Visa cards linked to Tala’s digital wallet, giving customers a seamless way to spend against their USDC balance at any of the 70 million merchants worldwide that accept Visa.”
This would not be the first time that a major payment processor has supported crypto. Earlier in the year Mastercard also announced plans to actively work with crypto. The general sentiment shows how stablecoins are increasingly serving as the bridge that connects the world of digital assets to that of traditional finance.
More Access to Financial Tools
One of the biggest problems that the underbanked face is that their bank accounts feel unusable, unsuitable to their needs, or they have no access to banking at all. This is often caused by restrictive limits that banks place on accounts. These include allowing debt collectors to actively deplete accounts when new money enters them, fears of entering unarranged overdrafts, or credit ratings that are so poor that users get rejected for loans at every turn (and in some occasions even rejected for jobs).
Allowing the underbanked to access stablecoins like USDC is a massive help as it sidesteps the pitfalls of traditional finance. Users can utilize USDC as they wish, and can even use it to access DeFi services such as lending platforms and even savings accounts.
Additionally, this gives the underbanked more autonomy, security, and overall control over their finances as they do not have to be limited to fiat. Denelle Dixon, CEO and Executive Director, the Stellar Development Foundation, explained that their mission of “creating equitable access to the global financial system, is only attainable when companies like Tala, Visa, and Circle share our vision that financial inclusion is a right, not a privilege”.
Offering crypto capabilities to the underbanked has the potential to help lift those out of poverty by opening up more economic opportunities via DeFi, which is necessary for most as CeFi tools are locked away to the majority of those in question. Tala, Circle, Stellar, and Visa’s joint efforts are doing a world of good by making crypto accessible to those who cannot reliably access fiat.
How important do you think crypto access is to the underbanked, and do you think this will have much effect on the global economy? Let us know in the comments!