Former Visa and JPMorgan Execs Take Over El Salvador’s Chivo Wallet
Key Takeaways
Linguard Labs acquired majority control of El Salvador’s Chivo wallet to drive regional financial inclusion.The relaunched app will offer microloans and cash advances based on wallet history to bank the unbanked.Under new management, Chivo will offer free U.S. remittances and cashback debit cards for millions of users.
Former Visa and JPMorgan Executives Relaunch Chivo Wallet
The Salvadoran government’s Chivo wallet, which allowed citizens to receive a $30 airdrop in 2021, is back with a new financial concept.
Linguard Labs, a California-based infrastructure fintech company that assumed control of the Chivo wallet, announced on Thursday a public-private partnership to relaunch the wallet after the government transferred majority ownership under the guidance of the International Monetary Fund (IMF).
Linguard Labs, founded by Drew Weinstein, former head of mobile innovation at Visa, with Former Global Chief Architect at JPMorgan John Davies as CTO, is betting on making Chivo the standard for financial inclusion in El Salvador and Latin America, expanding the feature suite alongside the relaunch.
In a press release, the company announced that the new Chivo will offer Salvadorans access to microloans and cash advances, using income, payments, and spending history inside the wallet as support. Merchants will also be able to take advantage of these possibilities, obtaining cash advances to expand their businesses. The move aims to include millions of unbanked and underbanked people in the financial system.
Besides regular wallet functionality, Linguard Labs ensured that, under their stewardship, remittances will be free, allowing Salvadorans to send money from the U.S. to El Salvador without associated fees. This was one of Chivo’s selling points when first promoted; nonetheless, crypto-based remittances have failed to gain momentum in the country and remain under 1% of the total, failing to disrupt the already established giants.
Furthermore, Linguard Labs hinted at cashback-enabled payments across El Salvador, with debit cards available to pay at merchants that still don’t accept crypto, opening the doors for over 4.5 million registered Salvadorans to these benefits.
“We are honored that the government of El Salvador chose Linguard Labs as its partner to reimagine Chivo. We did not take this on for small wins. Cheaper remittance fees are not a win. Free is. Making credit available to Salvadorans, banked or unbanked, is a win. A new era of financial inclusion begins today in El Salvador and will spread across Latin America,” Weinstein said, in a statement.
