Mobile payments pioneer mHITs has entered the bitcoin space with a platform it claims is the “easiest way” to send phone credit across borders.
The new service, BitMoby, lets users transfer between $10 and $100 to mobiles in over 117 different countries, without the need to register.
MHITs, founded in 2004, offers a range of mobile money services to customers in Australia and beyond.
Speaking to CoinDesk, CEO Harold Dimpel said the project is a chance for his company to experiment with digital currency, while giving users a simple and fast experience that “simply cannot be achieved via existing card-based technology”.
How it works
Users do not need to register with BitMoby or any kind of mobile money operator (Kenya’s mPesa, for example) to send funds, nor do they need to disclose any personal information.
In fact, all that is needed to complete a bitcoin transaction is the recipient’s phone number, their country and an email address. The latter is used to contact or refund the sender should something go awry.
After this information has been entered and the user has selected how much credit they wish to buy, BitMoby presents a wallet address and the corresponding amount of bitcoin to be paid. There is a 10-minute window for the user to complete their payment at BitMoby’s ‘frozen’ exchange rate.
Once BitMoby has confirmed the transaction, it pays the relevant operator (eg: AT&T, O2) and credit is added to the recipient’s phone.
“We are trying to exploit the fact that, with bitcoin (unlike card-based transactions), we can directly embed transaction information in the bitcoin QR code and wallet address which means no ‘shopping cart’ or ‘check out’ process is required,” Dimpel said.
The service currently supports around half of the world’s carriers, but the CEO said the company will be working to add more over time.
Research and development
As the project is still in its early stages, Dimpel conceded there are still kinks to iron out – including complex daily and monthly top-up limits that vary across the world’s service providers.
Rather than a polished product, the CEO sees BitMoby as a “bit of R&D for us to get into the [bitcoin] space”.
Choosing ‘digital cash’, he said, was part of the company’s desire to sidestep the red tape and KYC (know your customer) requirements involved with many overseas transfers, including remittances.
“Mobile top-up is purchased in cash around the world with no customer registration information, so why should we require it? We don’t care who is paying us. So long as we have the funds, we will do the transaction.”
Storing digital currency is another experiment for the company. While various self-hosted solutions are currently on the table, Dimpel said he remains open to new ways to store BitMoby’s funds.
However, like many merchants accepting bitcoin, the company doesn’t keep its currency digital for long, cashing out regularly to buy credit and settle with mobile operators.
“Our AU$ just dropped 1%, so we’re used to volatility. Bitcoin’s no different really, you just have to move quickly and know how to manage it,” he said.
Australia and beyond
The Canberra-based company already serves Australians remitting money via SMS to six countries: Fiji, Ghana, Indonesia, Kenya, Nepal, the Philippines and Somaliland.
However, the new service has a broader reach, hoping to capture users outside these established, highly regulated ‘corridors’.
“Remittance is a different business. Money flows from one country to another, for example there is a lot of money from UK to Ghana, whereas top-up is all over the place,” Dimpel said.
Bitcoin too, is international. BitMoby is one of a growing number of businesses, including BitPesa and SMS wallet 37Coins, that are using its borderless technology to undercut entrenched legacy systems.
There is much to gain. According to World Bank data, remittances to developing countries will hit $516bn in 2016, while money-transfer agents like Western Union – which often operate in a duopoly – charge fees as high as 29%, despite world targets of 5%.
“We’ve been around this enough to realise it’s ridiculous, especially for small payments. It’s all legacy stuff and the conservatism is outrageous. Consumers are wanting something better.”
Phones image via Shutterstock