Look, I know people are hungry, and this can seem banal. But in its own way, it’s a unique illustration of how bad the Venezuelan crisis has gotten. Chavismo has found a way to defeat that standard-bearer of neoliberal orthodoxy: the automatic teller machine. ¡La lucha sigue!

I’m serious. These days, the most you can get out of an ATM machine in one go is Bs.1,800…just under two bucks, at the black market rate. That’s 18 bills, often crisp and new…and able to buy you about two short cab rides. ATMs are not useless, another victim of the revolution.

In fact, Venezuelan banks are now reducing the number of available ATM machines.

One private bank manager told El Carabobeño’s Dayri Blanco that the costs to handling a large ATM networks are simply a losing proposition. The basic problem is the logistical nightmare involved in dealing with the masses of bank notes the ATMs need.

Economic consultant and former executive technical director of the Venezuelan Bank Association (ABA) Jose Grasso Vecchio recently told Globovision that an average heavily-used cajero is now emptied in just three hours. These machines were just never designed to have virtually every customer withdraw the maximum amount allowed.

With costs skyrocketing, it’s no surprise banks are rushing to get out of the ATM provision business — including those outside their own branches, especially in locations with time restrictions.

I reached out to the Venezuelan Bank Association (ABA) to check on El Carabobeño’s story and the subsequent public reaction. At the time of this post’s publication, their press department has not respond to my request.

In Barquisimeto, where I live, the impact of disappearing ATMs has been quite obvious. When the programmed four-hour rolling blackouts were under way, finding a working ATM without a large line-up waiting was just a beautiful dream.

The need for higher denomination bills is now blindingly obvious to everyone, including even some people inside the BCV. Apparently, Nicolas Maduro isn’t approving the idea, for reasons only Gerardo understands. So the proposal has ended in the same place reasonable ideas go to sleep, the BCV’s top men are quite busy discussing “the Marxist economy”. That sounds like fun.

A few days later, the BCV gave the banking sector a small consolation prize: raising the caps on fees for operations involving credit and debit cards. Grasso Vecchio welcomed the BCV’s decision, saying this increase is the first of its kind in seven years.

But he also said that the logistical and financial costs of keeping cajeros working (from paying insurance and security firms to importing hardware and supplies to repair damaged ATMs) are rising, which makes adding still more ATMs is unsustainable.

What’s his solution? “…we must embrace e-banking to avoid the excessive use of cash…”

In response, Venezuelan banks push point of sale machines (puntos de venta) to relieve the pressure on cajeros. In effect businesses are already using their point of sale machines as makeshift ATMs, as Efecto Cocuyo recently noticed. They provide quick cash to those who need it and charge as much as a 20% commission, depending of the type of card (debit or credit).

Seems like the puntos are here to say. It’s not only formal retailers are embracing it, but even some street vendors. El Pitazo’s Armando Altuve visited hot dog stands in Chacaito already using them. Customers find it a good option as they avoid carrying large amounts of cash to have a bite and owners think POS machines make their job easier and protects them and their employees at the moment of closing shop late at night.

But puntos is not immune to the current crisis: the Venezuelan Commerce and Services Council (Consecomercio) has warned about the shortage of both puntos and cash registers which affects their operations and brings them into conflict with the central government (for example, making them vulnerable to administrative sanctions).

Si no es una vaina es la otra.

28 COMMENTS

  1. “What’s his solution? “…we must embrace e-banking to avoid the excessive use of cash…””

    Think of the case of a tourist (if we had any tourists).
    His options – getting around Bs.900 per $ in the street which entails huge amounts of bills along with the inherent danger or using his foreign credit card at the DICOM rate of around Bs.640 – a 30% loss.

    Just keeping food in the house requires dealing with lots of people & places that don’t have a POS or it’s broken.

    Or they just want cash because they don’t want to report it to Seniat, a very common occurrence these days.

    In order to have electronic banking you need a PC, laptop or modern cell phone.
    What % of the population has access to these?

    The lack of larger denomination bills is choking the economy.
    Typical of Maduro to not be able to make a decision.

  2. At the little street market I go to every stand seems to have a “punto de venta”; which is great. However, besides the ATM’s, there’s another problem. A friend’s wallet got stolen the other day. He went to his bank to get a new card. It turned out the bank didn’t have any and my friend had to wait a few days borrowed a few cards from another branch. I guess, like everything else in the country, the cards are also imported.

  3. The Sale points are as old as the debit and credit cards, they’re incredibly useful as they allow people to pay for stuff without having to carry a brick of worthless notes.

    Nicolazzz blocked the emission of higher denomination notes for two reasons: That would make evident, more evident, the crushing inflation, aka a failure for “Chávez’s legacy” and thus another defeat for chavismo; and because the guiso in the note-printing business is in printing “quantity and not quality”.

    The sale points and the cards have another problem which you didn’t mention: Finding a spare in less than six months is outright impossible, there is literally no way to replace a damaged point or to renew a card once it’s expired, because you know, CADIVI / CENCOEX / chavista dollar MONOPOLY; I speak from experience with this, as I have two months without a sale point in my workplace since it just started giving a “connection error” and have two years with an expired debit card.

  4. Unbelievable.. And you cannot go to your bank and take everything out in cash?! In civilized countries, your money is your money. There may be a cash-withdrawal limit on ATMs, say 500$, but if you need more cash you just go to the bank and take all you want out – short lines, if any. You don’t even have to show an ID, just your atm card (I just got 800$ out like that last week in Miami,)

    What’s also incredible is where does all the money come from? People seem willing to buy anything they can get, even from bachaqueros. And many are supposed to just make “minimum salary”: 12$ per month. Yet they are starved for ATM’s and any product available.. How do they pay for rent, cell phones, cars, electricity, cable tv, plus food, insurances, etc..? Beats me. Not even with 20 x “sueldos minimos”.. Something’s fishy there.

    • Juan, you can go to the bank with a check written to yourself and your ID card and they will allow you to withdraw up to 100,000 Bs. Needless to say, lines inside the bank are usually not short and since banks tend to have their vaults overfilled, you might risk getting all that cash in bills of 10 and 20 Bs, so you’ll might leave the bank with 10,000 bills. Not a pretty sight.

      As for the second part, “people seem to buy anything they can get” is an overstatement. The mass majority of Venezuelans who cannot pay for what they need.

    • “People seem willing to buy anything they can get, even from bachaqueros.” Not quite. People are willing to buy anything they can get *within* their low budget. Rent? Minimum wagers live with their parents or in small rooms. Cell phones? Rates are still low (not for long though, raises are coming) Electricity, Cable… same. Cars? Insurance? You’re kidding right? So most of salary goes on food.
      Yes, people can go to the bank and take everything out; it’s just that lines are usually larger than ATM’s. Also, banks impose restrictions on how much you can take out from in-office tellers: if it’s less than the maximum withdrawable from ATMs, they won’t cash it to you in person… just go to the ATM (wherever you find a working one). The minimum biweekly salary is usually less than that; and most workers live “paycheck to paycheck”.

      • Thanks for the info. I stand corrected. Haven’t been in Vzla in years..

        Still, in really poor countries supply seems to outweigh demand. The markets in the streets are full of products, but people have no money to buy them.. (I’m thinking India, Haiti, African markets..) And they don’t care about ATM’s, cuz they don’t even have cards or money in any account. It’s all cash, even barter trade.

        Conversely, strangely enough, in Vzla it seems it’s the other way around. People get upset because ATM’s do not give them enough money, and they don’t want to get into their banks because lines are long.. Sounds like the problem is not that bad, is it? And then they do stand in long lines to buy anything they can. And then they tell Caracas’ night life and restaurants and malls are usually full of customers..

        Are they all American or European wealthy tourists, or Venezolanos con algun GUISO?! Not saying every Venezuelan is corrupt these days, but many, many are. Obviously. Not saying there’s no poverty, or children having only 2 meals per day, of cheap carbohydrates, but I reiterate, where does all the money you see in the streets come from??

        I bet that more than half of it is from dubious, corrupt means. Extorsion, corruption, tigres, guisos, “un negocito que hice por ahi”, “una palanca”, “un pana enchufao” “un rebusqsque”.

        Heck, when I lived in Vzla in the 90’s it was already corrupt as heck, everywhere, at all levels. I used to work with a decent French company, with Edelca and Metro de Caracas corrupt people, building a major power line. Cortijos de Lourdes, Palos Grandes, etc. Sta Teresa all the way to Cuidad Bolivar. We had about 1000 local employees, from average obreros to skilled engineers. Jezuuzzzzz…. the corruption already everywhere, most would steal every chance they got. From the union workers, to the “jefes de obra” to the bankers we deal with, to the managers, it was a mess.
        I was in Purchasing and Imports, my counterparts in the local companies, all purchasing managers and their assistants were totally corrupt. And I met many. It was blatant. La Estancia or las Mercedes fancy restaurants everyday for lunch and murky deals. Heck you had to grease everyone to even compete or get any small contract.

        30 years later, under Chavismo, it must be 100 x worse. And corruption in Vzla has always been horrible..

        Edelca? (Former Corpoelec), Metro de Caracas employees? Corrupt to the bone, most of them, at all levels. You had to grease them all, bribe them to get anything done. I have many friends in various industries, they all say the same.. Money is somehow relatively abundant and you don’t know where it really comes from. Certainly not from poor nominas. People (‘el pueblo”) still take long vacations, go to the beach, and spend money. Where from? Minimum $12 salaries? Beaches are full. Malls are full. ATM’s are full. Y eso es “crisis”? I’m gonna have to visit and see for myself, but it just does not add up.

    • Two weeks ago I went to the bank to withdraw some money. They gave me 2000 Bs in 20 Bs bills and 5000 Bs in 50 Bs bills. I had to take a backpack with me to take the money.

    • It’s not exactly the same. Getting cash from a retailer using POS here doesn’t require a purchase, although it’s registered as one from the retailer’s perspective. For example, if I wanted Bs. 20,000, I’d go to a shop or a buhonero I know might provide cash via POS, and depending on the percentage they charge, I could swipe the card for Bs. 22,000 (+10%). The retailer keeps that 10% and I get my Bs. 20,000.

        • Adding to Javier’s example here:

          Retailers, of course, have to pay banks part of that 10% (say 2%) in fees, which leaves them with 8% net profit.

          Since business is so good, efforts are basically non-existent and demand is rising every day, businesses are using the wiggle room provided by this hypothetical 8% to purchase cash from anyone interested.

          Buying money to sell money. Everybody wins, with the exception of the weakest link in the chain, of course.

          Another day, another maraña.

          • Stories about ways to sort difficulties out are countless. For example, I have a neighbour with a small store (una bodega pues) but he doesn’t take cards; so I wire him the money I need, and he hands me the cash. This way we both avoid lines at banks (Me for withdrawals, him for deposits), while he, by getting rid of the extra cash, gets safety and expediency on handling the business money. No extra fees paid for this symbiotic arrangement.

    • That’s thanks to SUDEBAN. The dickheads forbade them to do that because last year there was a larger bill shortage. Apparently they were smuggled to Colombia.

    • No, dude, the solution is to print bigger denomination notes, because the ones already existing are pretty much worthless and nearly useless in most cases.

    • Oh the Irony, the party of the worker class, decides that is better to f… the consumer as a last resource to keep themselves in power and maintain their privilege as a ruling class…

  5. The only solution is a tough, tough government, with real laws, and a real justice system, with punishment for thieves and crooks everywhere, including the banking system. And I’m not talking about any future Muddy government. They can’t do anything about massive corruption everywhere either.

    • I disagree, tough government usually means more power, this is not a good idea if you take into account that the government is the main source of corruption.

      There should be more constraints to the government and stress the importance of checks and balance.

      • Perez Jimenez may have been a thief too. But nothing compared to the thieves today. Just google what he built in just 5 years, with much less oil, and much cheaper at the time. Look it up. Half of Venezuela’s infrastructure, at least. The economy was strong, a dollar for a bolivar, and crime was at it lowest. Education getting much better. Look it up. Unfortunately, for KleptoCubazuela, it would be the only solution.

        Reminder: 3000 dead under Pinochet in 17 years; 200,000 dead under 17 Chavismo years. Look at Chile, and look at Vzla today.

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