An estimated 30 million Africans in diaspora send home close to $40 billion dollars to their loved ones, every year. Out of that huge amount of money, $1.4 billion goes to the usual suspects – legacy money transfer services like MoneyGram, Western Union – as service charge.
Bitcoin technology, on the other hand, offers a faster and cheaper option of transferring money internationally. Cash remittance services at cheaper rates is the perfect ingredient for a disruption of the money transfer ecosystem in Africa. Below are some of the startups leading the charge.
This Australian bitcoin exchange (which started in 2013) recently entered into the Kenyan market with the acquisition of Tagpesa (a local Startup in Kenya). Igot offers a 1% transaction fee (after merchants have exceeded $1 million in bitcoin payments) and offers remittances in the local currency which can be collected from a local bank or through an M-Pesa account. The CEO is Rick Day.
Founded in 2013 by Bob Aman, Charlene Chen, Amy Ludlum and Elizabeth Rossiello, BitPesa was the first Bitcoin remittance service in Africa. Based in Nairobi, BitPesa offers remittances in the local currency, with a catch – withdrawals can only be made through the mobile wallet options in Kenya i.e. M-Pesa, Tigo, Orange, Airtel, or Yu. Not bad. BitPesa charges a 3% transaction fee on any Bitcoin transactions through their website. Currently only serving Kenya and Tanzania.
BitFinance was founded in 2014 by Tawanda Kembo and Verengai Mabika and recently went through the Savannah Fund accelerator program. The Zimbabwe-based company allows the buying and selling of Bitcoins using mobile money or your bank account through their BitcoinFundi service. Their other service is the CryptoCounter, an ATM that allows you to exchange bitcoin for fiat and vice versa. It also comes with an API that allows 3rd party developers to build Bitcoin apps.
Pronounced as ‘Icecubed X’, the South African-based bitcoin exchange was founded by Gareth Gobbler and launched into the Nigerian digital payment ecosystem this year. ICE3X in partnership with VoguePay, allows Nigerians to buy and sell bitcoins using Naira directly from their existing VoguePay wallets. Currencies that can be traded in are the Rand and Naira. It also offers users trading and market data from other leading exchanges globally, so customers are aware of movements in the market.
The most recent startup on this list, BitStake formally launched on March 31. This Nigerian startup charges 1% on all transfers. That’s the lowest on this list. It also offers other services like a full bitcoin/Naira exchange, and a bitcoin lending platform. Founded by David Ajayi, Alexander Christian and Ray Carlo Danetti.
The following services are no longer in operation. But they had a good run, while it lasted.
The Ghanaian bitcoin exchange allowed its customers to buy bitcoins and make online payments and also convert Ghana cedis into bitcoin. It was founded by Maluwi Adzoe, Nikunj Handa, Falk Benke and Emmanuel Quartey in 2013.
Beamremit converted bitcoins sent from the UK to Ghana’s cedi and withdrawals could be made through MTN mobile money services. Founded by Nikunj Handa and Falk Benke in 2014, Beam charged 3% remittance fee compared to Moneygram and Western Union, its major competitors, who currently charge 4% upwards on their remittance services.