Kenya’s BitPesa has launched in beta to allow Kenyans living in abroad to send money back home with ease and at affordable rates.
Speaking to TechMoran, Elizabeth Rossiello CEO and Co-Founder at BitPesa said, “We have launched! Log on and send some coin to MPesa. (We) just not allowing US IP addresses, but everywhere else works.”
The Nairobi-based firm on Friday had around 15 people beta test its remittance service in London to send money back home according to The Wall Street Journal.
Founded by Duncan Goldie-Scot, a microfinance expert and Elizabeth Rossiello, also a microfinance expert and former banker who’s been living in Nairobi the past five years, BitPesa has raised $700,000 from Second Market’s CEO Barry Silbert , Google Kenya’s Joe Mucheru and several other investors.
The developing world last year received $414 billion in migrant remittances, an increase of 6.3 percent over 2012. The World Bank says the figure is projected to rise to $540 billion by 2016. Globally, the world’s 232 million international migrants are expected to remit earnings worth $550 billion this year, and over $700 billion by 2016, says the latest issue of the World Bank’s Migration and Development Brief.
Back to Nairobi, Kenyans in the Diaspora send back home $1.3 billion and with its 3% flat fee, BitPesa aims to see the numbers increase this year.
Bitpesa works simply, users buy bitcoin and send it to BitPesa. Bitpesa converts it to KES and sends it along to the recipient. The startup only charges 3% as commision and charges no transfer free. The firm also says they have the best exchange rates around.
Though not fully regulated in Kenya, the firm is n talks with the local government and is also seeking a hand from Safaricom as it increases M-PESA withdrawals from the Diaspora. The founders expect BitPesa to spark a tech boom just as M-PESA did when it was introduced in 2007.
Kenyans receive money via Money Gram and Western Union and other traditional bank transfers. Though PayPal has a deal with a local bank, the processes of transfering money to a bank account then to mobile money is cumbersome and costly. The success of BitPesa will also reduce the channels money has to go through before reciepinets can use it as now M-PESA can be used to pay for goods online and at cash tills from their mobile phones. Over 30 million Kenyans own a mobile phone according to CCK, the country’s telecoms regulator.