Venezuela Economy: Payment apps surge amid massive hyperinflation

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People in Venezuela have been suffering hyperinflation as well as a shortage of basic goods and paper money. The maximum daily amount Venezuelans can withdraw from cash machines is around 10,000 bolivars or about 40 cents in US dollars. People from vegetable sellers to taxi drivers have registered to use mobile payment applications to attract customers. Niya Hawkins reports from Caracas.

On the streets of Caracas, customers are increasingly buying food - with the help of software on their phones. Cash- scarce Venezuelans are turning to payment apps -- the result of the country's economic crisis.

MANUEL PINO CHEESE VENDOR "At times, there's no cash and the systems for traditional payment are delayed because of technical problems, and you become uncomfortable because I like to tend to the customer in a quick fashion, and I try to speed up the system."

VALESKA BETANCOURT VENEZUELAN VENDOR "For me, it's practical, very practical (to pay with Vippo) because it enables the transaction, and you avoid the line, and it helps points of sale collapse (move faster)."

With hyperinflation in Venezuela hovering around four-thousand percent, simple transactions are becoming time-consuming.

How does someone get a carwash, tip a waiter or buy a piece of fruit when the maximum ATM withdrawal is just 10,000 bolivars. That's officially 40 cents given the current exchange rate -- or about 4 cents on the black market. Mobile payment apps like vippo, tpago and others have an answer.

MIGUEL LEON VIPPO ELECTRONIC PAY SYSTEM FOUNDER "We saw in 2010 and 2011 that this electronic pay was going to be a trend. It was a global trend."

Last year, Caracas-based vippo had a 30-fold increase in customer registrations. Shopping centers, universities and others are now creating their own payment apps -- as banks and outdated public infrastructure struggle to meet demand.

Fintech entrepreneurs and developers are filling the gap. Low salaries, little capital and cheap electricity and data rates make it possible.

Caracas is helping boost digital transactions-- unintentionally -- by slowing cash production.

MIGUEL LEON VIPPO ELECTRONIC PAY SYSTEM FOUNDER "There is also an interest among governments to end cash, because cash costs the government more money. Sending money, transporting money, all that costs money, and costs even more with a large quantity of money."

Government data shows -- the volume of Venezuelan bolivars increased 14 percent in 2017 -- less than half the previous year. All this as price rises passed 25-hundred percent.

MIGUEL LEON VIPPO ELECTRONIC PAY SYSTEM FOUNDER "What ends up happening in the end is that there are countries, for different respective reasons, this eventually accelerates. And so perhaps our economy will be cashless before Denmark, which is one of the countries that has put more effort into this electronic pay."

Venezuela has some of the world's slowest internet speeds, and a significant portion of the population still lacks bank accounts and cellphones. But that's not stopping the fintech revolution. NYIA HAWKINS, CGTN.