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Comment by tantalor | Hacker News Reader

Why not just use credit cards?

Do you mean credit cards that can make USD transactions in Venezuela for affordable fees? I don't know if that exists...

If you mean traditional Venezuelan credit cards, remember that the original problem is hyperinflation, this is exactly the kind of thing they want to avoid.

Yeah, in USD. Huge opportunity being missed here.

The government most probably doesn't allow it, but I'm just guessing.

I'm assuming they don't allow Zelle either, but that's not stopping people from using it.

If a Venezuelan merchant wants to accept credit cards, they'll have to work through Venezuelan payments processors and Venezuelan banks (which don't offer US bank accounts, due to sanctions). The nice thing about Zelle is they can work through a US bank (yes, surreptitiously). But that way they get dollars.

Fixed transaction fees in a foreign currency in an economy going through hyperinflation. That .2 USD can end up being worth more than a person's whole shopping cart (when converted to local currency)

I don't see the opportunity being missed here.

The point-of-sale terminals in Venezuela are not set up to accept U.S. dollars via cards. (They do have cards there, it's just that a card payment is by necessity a Venezuelan bolivar payment.)

fake, USD cards work perfectly in venezuela, venezuela uses normal mastercard and visa networks, using an USD card in venezuela is exactly the same as using it in brazil or itali or anywhere else.

I use my AMEX, BoFA VISA, citi MC, with absolutely no problems on venezuelan point of sales.

How do you get get USD and how do you pay off the cards? I thought there were international banking controls that stopped outside transactions.

Do the merchants receive USD or are they forced to convert to worthless Bolivars, at the rate determined by the Venezuelan central bank?

Merchants receive VES, processing fee are exactly the same as processing a VES card.

Bolivars are not worthless when you getting the full exchange value of it, they render worhtless when you put them in a savings account for 1 full year, at this moment, the rate of usd/ves has kept around 1:200k for around 2 months, this kinda gets some time for people to maneuver their VES, it changes hands really quick

Central bank rate is pretty much similar as "black market one" since 1 year ago. Sometimes is even better.

As of today, 1 USD from an USD credit card in venezuela exchanges to 203.639,64 [1] while 1 usd exchanged in the "black market" gives you 205.310.06 [2]

[1] http://www.bcv.org.ve/

[2] https://dolartoday.com/

The article says inflation is currently between 2000 and 3000% a year.... you wouldn't need to leave it in the bank very long for it to become mostly worthless

2000% / year would be 28% per month (12th root of 20). Spend it fast.

> savings account for 1 full year.

This is just a roundabout way of saying that the only way to not lose value is if you spend bolivars immediately.

Even if the exchange rate is stable for "around 2 months", this does not mean that the currency is keeping its purchasing power. It just means that the central bank has successfully managed to keep the currency peg for this period.

But what is the exchange rate when you use those cards? The Cucuta, the Dolar today, Dolar BCV?? with the multiple exchange rates you can get killed.

You get BCV dollar which is pretty much the same as dolartoday, last week was even a better rate.

Yes, but if you pay with your US-issued Visa card the Venezuelan merchant won't receive U.S. dollars. They'll end up with local currency.

The advantage of Zelle is that unlike Visa, it is a dollarization tool. A Venezuelan merchant can directly earn U.S. currency.

And thats cool, Venezuelan merchants still need the bolivars, they pay taxes, they pay rent, they pay salaries, they pay to their providers, all of that is done in VES, also, they get the same exact rate as the unnoficial one.

However, they can't save and they can't have any security to make any long-term investment. They also don't get any chance of credit in local currency because interest rates will be insanely high due to the hyperinflation and volatility.

The ones that do manage to get any savings will rush to the black markets to convert bolivars to USD or EUR. The ones that don't get any savings are SOL.

As someone who grew up with 30%-40% inflation a month, I find it really weird to see someone thinking any of that is cool.

Initial post was about POS in here not acepting USD cards, i showed they do.

Is cool that they do it, as it allows more payment methods to then and allows me to spend my USD, the more formal the business is, the more it will avoid using informal payments methods like zelle, so I do use my US creditcards in big chains, etc. As for every other aspect of our economy, im clearly hugely affected by it, me saying that POS taking usd cards is cool, doesnt mean i agree to our mess of an economy

I don't know if you miss the point that the official currency of venezuela is still the VES, and business have to still use VES for so many reasons, yes a big part of the VES gets exchange to USD but the main currency, still the VES

What you call "informal" others would call "outside of control from the Government and harder for Maduro to seize".

And yes, I understand that the economy is not de jure dollarized, so that there are still the need for bolivars at some point. My point though is that having a parallel, USD-pegged economy outside of the "official" markets would be better for the people than not having it.

> they pay taxes

I suspect a side benefit of dollarization is being able to avoid to declaring income. I doubt they are paying taxes in the USA either.

Those don't work there. And even the credit cards in local currency have terrible limits, I'm talking not even 1k, probably few dozens bucks for most people after exchange conversion.

You're right; the inflation makes the limits extremely volatile and mostly useless.

It says in TFA: capital controls and fixed exchange prices, the tools of every country that is going under massive hyperinflation.

This leads to great disparities between official rates and secondary market rates. So if you are the one accepting credit cards, either you had to have different cash/card price tags (usually not acceptable for the card companies) or you simply don't accept card payments.

Extra fees?

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