Bitcoin remittance provider BitPesa has officially launched its beta test.
BitPesa aims to disrupt a traditional remittance market that often imposes high costs on those wishing to use remittance services.
For example, the cost of sending money to Kenya by other means can be as much as 9.2% of the value being transferred by services like Western Union and MoneyGram, and 19.8% by banks, reports have found.
Disrupting the remittance market
Many have spoken to bitcoin’s potential in the remittance market, as cross-border money transfers otherwise come with weighty fees. The digital currency faces an uphill battle in that business though, mostly due to the costs of compliance and regulation.
Lawmakers’ attitudes toward bitcoin and digital currencies differ in each country – the kind of uncertainty that will become increasingly problematic as bitcoin gains popularity.
But BitPesa claims "end-to-end regulatory compliance and KYC protocol", helping to "eliminate fraud, increase the growth of bank balances" and gain back "the trust of valued diaspora clients", its website says.
Western Union currently accounts for about 31% of the total market, and MoneyGram 6%. Commercial banks account for 50%
Still, while BitPesa is closer to reaching the market, it's not the only operator trying to use the power of the Bitcoin protocol to improve the global remittance process.
Notably, Coincove saw its formal launch earlier this week, and though it offers and exchange and wallet service, it still sees a big opportunity in the remittance space.
Image via BitPesa
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