Clients of El Salvador’s largest bank, Bancoagrícola, will now be able to pay down their loans and credit card bills in bitcoin. They can also now use the cryptocurrency to purchase goods and services from merchants connected to the bank’s payment gateway.
Bancoagrícola, founded in 1955 and now owned by Grupo Bancolombia, has tapped New York-based payment network Flexa to enable the payments in bitcoin via its mobile app.
According to an announcement from Flexa, the bank’s customers will be able to pay U.S. dollar-denominated loans and credit card balances with bitcoin at “the exact fair market rate, without any additional fee or spread.” The option is designed to work with any wallet compatible with the Lightning Network, including El Salvador’s official wallet Chivo.
Merchants in El Salvador that are set up to accept payments using the Bancolombia Group’s Wompi gateway can accept bitcoin through Flexa as well. Those payments are largely online, for now, Flexa CEO and co-founder Tyler Spalding told The Block. However, the company is also planning to announce compatibility with other payment gateways, Spalding said. Flexa is also looking to use its technology to streamline the process of accepting bitcoin-based payments at brick-and-mortar stores.
“The whole concept with Flexa is we want to make it just as easy, if not easier, than any other payments you’re already used to,” Spalding said.
Bancoagrícola is just one of the many companies in El Salvador that has had to tailor its payment methods to include bitcoin, as required under a landmark law regarding the cryptocurrency that went into effect on Sept. 7. Businesses operating in El Salvador, including multinational chains like Starbucks and McDonald's, are now required to accept bitcoin as a form of payment if they have the technology to do so. Consumers, on the other hand, have the option of whether they want to pay in bitcoin or stick with the local U.S. dollar currency.