Venezuela Is Becoming More And More Isolated

Wells Fargo, a US-based bank, is warning customers in Venezuela that as of June 26 they will no longer have access to the Zelle platform.

The notification of the suspension of the service is coming via email, according to reports.

Zelle is a US inter-bank payment gateway, through which money can be sent to family and friends – people the user trusts – according to its User Service Agreement.

Given the progressive “dollarization” that the Venezuelan economy has experienced in the last two years, this platform has quickly become one of the preferred payment solutions in the Caribbean country, used for different purposes unrelated to the original purpose of the service.

Many Venezuelans use it in the same way as the Venezuelan inter-bank mobile payment service.

Wells Fargo closes access to Zelle for Venezuelan customers

Wells Fargo has not issued any official communication about the new restrictions on Zelle for Venezuela, but it became known through comments from several Twitter users that they had all received the same letter.

Also, on the subject, the email sent by Wells Fargo to a Venezuelan headline was shown on Twitter saying that the settlement is based on article 28b) of the company's online service contract, as well as section 6.B of Zelle's service contract.

Specifically, article 28b) states: "In the event of unauthorized or fraudulent transactions relating to your funds account, deposit account or use of the transfer service, (...) we may suspend or terminate your access to the transfer service at any time".

Several media, such as El Nacional, reported on what happened. El Diario said it tried to contact Andrea Tilkess, Wells Fargo's communications manager for Canada and Latin America, but she assured it that she did not have "enough information about the case.

Only Wells Fargo?

So far, it is not known whether other financial institutions that also employ Zelle will take similar action to Wells Fargo.

In this regard, the economist and director of the firm Ecoanalítica, Asdrúbal Oliveros, was emphatic in saying that "it is likely that more banks will join. Oliveros also said, "It's better to use Zelle at a minimum and handle cash.

The news comes in a context where some companies like Adobe, TransferWise and Uphold have decided to close operations in Venezuela some months ago to avoid problems with the US government.

Other possible motivations

The reason for Wells Fargo's suspension is unclear, apart from what Espinoza and Oliveros have mentioned. Some argue that it is due to alleged bad practices in relation to its use in Venezuela.

However, other media, journalists and analysts have raised other possible reasons why the bank is closing Zelle to Venezuela.

The media EVTVMiami, one of the first to review the news along with the local El Nacional, said that presumably the decision is part of the actions taken by some US companies (such as those mentioned above) to guard against sanctions by the administration of President Donald Trump against the Venezuelan government headed by Nicolas Maduro.

This is to avoid the connections that some clients might have with the sanctioned authorities.

Users on social networks have also dared to wonder about the bank's motivations. In this regard, the economist and Director of Econométrica, @HenkelGarcia, asked himself on his Twitter account:

What motivated WF's decision?

Compliance with sanctions or that Zelle is being used to make exchange transactions rather than payment for goods and services?

On the other hand, another user agreed, commenting that "it is not only because of the sanctions" but, referring to the third paragraph of section 1.A. of Zelle's service contract, it is a matter of misuse of the platform by Venezuelans.

Cryptocurrencies and stablecoins, the solution?

The crypto community reacted quickly to the news, warning that the solution is within the reach of Venezuelans: cryptocurrencies and even stablecoins.

As for the stablecoins, some are already beginning to specify their potential use.

Such is the case of one user, who tweeted that these exist in addition to Bitcoin and altcoins, and that they are paired 1 to 1 with the US dollar.

Others are more cautious. While they claim that crypto may be the solution, they are aware that there is work to be done.

One user said, "I'm tempted to say Bitcoin fixes this, but it doesn't. The necessary tools have yet to be developed".

Alternatives to Zelle

While many users advocate crypto-currencies as alternatives, it is no less true that there are still other options for fiat payments available in Venezuela. Among them we have:

PayPal

It's practically impossible not to know her. PayPal is one of the most popular payment and collection platforms worldwide. It allows you to receive funds and make payments in online stores, as well as send and receive money between users. Its weak point is the charge of a 5.4% commission for receiving funds (plus USD $0.30 in each transaction).

PandCo

PandCo is, as they say on their website, a digital platform that allows you to manage your money "safely, easily and quickly".

"A rechargeable electronic account provided through a mobile application and website that works without limitations of time or amounts to purchase products and / or services, you can also collect and receive payments through it," he adds.

Pipol Pay

Pipol Pay is a recently launched APP that serves to send and receive digital dollar payments without the risk of closing or blocking accounts, as was the case with Zelle.

Cash App

Cash App allows you to send money instantly, transactions are made on the spot and offers a commission-free option. When receiving money, it can be configured to go directly to the bank account. You only need a phone number and a bank account to use the app.

The company has recently added the option to buy and sell bitcoins. Not all mobile payment services have that option, making it a unique feature.

Venmo

Venmo is a mobile payment service owned by PayPal, considered the most popular person-to-person transfer application worldwide.