The rise of startups helping foreign students access the US credit market points to yet another revolutionary potential use for Bitcoin.
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Fiat Credit Can’t Cut It
International students, from developing nations in particular, who study in the US face huge difficulties obtaining credit — which is all too often vital for them to afford basic living costs.
That’s according to Kalpesh Kapadia, an Indian student and co-founder of SelfScore. SelfScore is a startup which uses “a different set of approval metrics” to give credit cards to those who would otherwise be denied them because of various US requirements.
“I went to open a bank account for [my cousin] and get a social security number, and I found it was impossible for her to get an SS number on day one,” Kapadia explains in an interview with Tech In Asia. “You must have a job.”
Not only a job or social security: the lack of a credit report caused them to pay double the deposit on an apartment, a $500 USD deposit on a smartphone and be denied even the essential everyday tool in the US — a car.
SelfScore now handles negotiations and audits with credit institutions while using more common sense criteria to give students the money they need.
If a student has the money to study in the US in the first place, the Kapadia reasons, they should surely make suitably reliable credit candidates.
Bitcoin: Solution in Waiting
While the traditional hurdles of the legacy financial system are shown up as ridiculous by the international student example, the situation even for SelfScore’s 5000 applicants is still precarious.
Specifically, the problem starts when funds are in another country — but bitcoin debit cards and remittance services are already more than capable of providing an all-in-one solution.
Why tangle with fiat alternatives at all, when even SelfScore requires personal information and “public information from the students collected by the US Department of Homeland Security”?
Bitcoin can be freely sent from anywhere to anywhere. A student in the US can purchase a bitcoin debit card without any form of financial buoyancy checks.
Even if a student had no access to funds to pay for the card, a quick meetup in person to exchange cash for BTC via LocalBitcoins would solve this particular liquidity issue.
Together with the cards, even the need for emergency cash is catered for thanks to peer-to-peer Bitcoin loans startups, such as BTCJam and Credible Friends, which are becoming more widespread in 2016.
With such a variety of debit card options available regardless of one’s country of residence, even the downsides such as fees can be mitigated by the freedom the cardholder feels due to the flexibility they enjoy and the security of their personal information.
What do you think about Bitcoin’s potential to help students become more independent abroad? Have you had experience of it yourself? Let us know your thoughts in the comments below.
Images courtesy of Shutterstock, The Nation.