The President of Venezuela recently revolutionized the payment system with Fintech plans in the country with the purpose of solving its hyperinflation issue, the money system now has faltered and this has led to unnecessarily long queues at gas pumps, according to a recent report by Reuters.
These long lines gathered in gas stations is due to the fact that drivers were unable to use the Electronic Fund Transfer at Point of Sales (POS) system to make payment, this has joined a list of problems faced by Venezuelans such as healthcare, food shortage, and hyperinflation. The renovated payment system is neither working nor added to the gas station already. A Venezuelan in the border town of Ureña stated that; “I see a lot of disorganization because they haven’t started making this work yet.”
The Fintech Payment System
The way the new payment system was meant to work is that a Chip Stripped card named; “Fatherland Card” would be issued to citizens to purchase gas at the gas station. The ingenious feature of this card is that it helps the government trace subsidies for gas, this will imply that citizens without the “Father’s Card” will soon be mandated to pay international prices.
This announcement made by the President showed an indication that Maduro intends to increase gas prices in the country to meet up with international standard in October. But with the instrumentality of the Fatherland Card creates an avenue for a direct subsidy to the citizens to mitigate the harshness of the price increase and also made gasoline smuggling in the country almost impossible.
However attractive the Fintech payment system seems, coupled with the fact that it might enrich the government cash reserve purse but it amounts to futility or mark the start of new problems if the initiative falls short of total efficiency. Venezuela is also known for serious demonstrations whenever a hike in gas price occurs in time past.
Petro Launch Faces Challenges
Another project by the Venezuelan President is the state-backed cryptocurrency Petro, an initiative launched last week. Despite having started the project since 2017, it still sends a message that the government haven’t perfected the system yet speculated to be owing to lack of communication and hastiness. Various economic analyst has described the project as a “poorly thought out method” further stating that this might eventually not solve the country’s hyperinflation issues.
Reports have proved that Venezuelans have started looking for greener pastures, migrating into other countries as an escape route out the economic hardship caused by the hyperinflation and strict government interventions. This migration issue has constituted a thorn in Latin America’s flesh as it has grown into a humanitarian crisis.
Consequent upon the infrastructural collapse in the country, other associated problems have erupted as well, for example, food shortages crop up, starvation and disease are beginning to creep into the country. This payment issue has only added salt to the citizens’ injury as it has further heightened the level of frustration in the country.
The duty of any government since time immemorial is to make life easier for its citizens; life and property security, food security and provision of social amenities, it is rather unfortunate that the Venezuelan government is having a hard time in delivering these duties and what is more unfortunate is that government’s policies enacted to solve problems is constituting more problems.