The premier of BitPesa is officially underway. The service stepped out of its beta phase on Firday in a quest to subvert the time-honored and well-estalbished money moving providers throughout the diaspora.
By changing the way in how citizens of the predominately unbanked country interact financially, BitPesa has officially began its new remittance service that uses bitcoin as its backbone.
A Strong Alternative
The company – founded by Duncan Goldie-Scot and headed up by CEO, Elizabeth Rossiello – following a drawn out series of negotiations with various banking entities and network providers throughout Kenya, has etched a deal that looks to make BitPesa the most efficient way to move money throughout the region.
Thanks to the technology behind bitcoin, in a region where M-Pesa, the service is ran by Safaricom currently reigns, BitPesa provides a strong, yet cost-efficient solution to the often high fees associated with the current and major providers.
Though the fees per transaction vary, depending on the amount of money in transit, M-Pesa has worked to lower fees for the country’s citizens; however, money transfers still predominately rely on the major providers like Western Union, MoneyGram and WorldRemit. These traditional money transmitters, according to the World Bank, charge anywhere between 6% and 13%, applicable to all Kenyans wishing to send money home.
BitPesa, on the other hand, will charge a flat rate of 3% regardless of transaction size; the service, while it relies on bitcoin, doesn’t view itself as a strictly bitcoin company. Rossiello tells the Wall Street Journal that “we are taking bitcoin, translating it into the local currency, and dispersing it the way people know.” The startup focuses on the fact that the majority of Kenyans now own mobile smartphones, making it a likely place to start in assisting the world’s predominantly unbanked.
Gaining Traction
BitPesa’s head of trading and risk, Amy Ludlum, in a conversation with HumanIPO, explains how the company has leveraged M-Pesa’s current market to their benefit:
“Mobile money has allowed us to launch as quickly as we have, it is a brilliant technology, we love it, we use it to do everything. We hardly ever touch cash anymore.”
She adds that with little advertising, the company has been able to spread awareness by the effective, yet old fashioned method of word-of-mouth marketing:
“So far so good, we didn’t advertise our launch very much, we just got a handful of BitPesa testers to see if the platform worked. But we have got lot of people coming onto the site and starting using it even without telling anyone.”
Building Trust
The company is looking to target the African regions of Rwanda, Tanzania and Uganda as part of its growth and development strategy and has already gained a strong foothold in these areas, much of which too has come as a result of word of mouth.
“We consider ourselves a Kenyan company, but we are also an East African company, we know there is some interest in Uganda, Tanzania and Rwanda,” Ludlum told HumanIPO.
BitPesa embraces the fact that the majority of Kenyans now own and operate smartphones, providing a favorable environment to begin in assisting the world’s predominantly unbanked. The company, while offering a degree of incentive through its low transaction fees, doesn’t put customer funds on hold like much of its competitors, as a result, BitPesa is quickly gaining the trust of the local community.
