Bitcoin Exchange Expands to Kenya, Sees Potential in Using M-Pesa
Monday, March 9, 2015
Last week the 14-month-old Australian based Bitcoin exchange, Igot, launched in Kenya with the acquisition of local company TagPesa to target the country’s remittance market. In addition, Igot has also been granted access to the mobile money service, M-Pesa, giving members the ability to deposit and withdraw money directly from their M-Pesa account, currently used by about 17 million Kenyans.
Igot’s service, which targets the international remittance market, is available in about 40 countries, with Kenya being its first African market. Remittance inflows into Kenya in 2014 are estimated at over US$1.4bn.
According to co-founder and CEO, Rick Day, over 2.5 million Kenyan emigrants remit money home to their families, with the average transaction fee of sending to African countries being almost double the amount it would cost to send elsewhere in the world – sometimes above 20% per transaction.
As a result of these excessive charges, it is estimated by the Overseas Development Institute (ODI) that Africa is losing around $1.8bn annually.
However, the cryptocurrency Bitcoin allows money to be transferred across borders swiftly, simply, and more affordably. For example, Igot charges a 1% flat transaction fee.
How we made it in Africa’s Kate Douglas talks to Day about Bitcoin’s future on the continent, and why he sees Africans using the cryptocurrency more as a mechanism to transfer money, rather than an investment.
Bitcoin has proven highly volatile, with its value crashing from over $1,000 in 2013 to below $300 currently. Do you think users in Kenya are going to want to use the cryptocurrency as a means of sending money back home? What role do you see Bitcoin playing in their lives?