In April, the think tank Overseas Development Institute reported that Africans lose out on $1.8 billion every year to remittance transfer fees.
That is enough money to “provide safe water to 21 million people,” the organization said.
BitPesa is looking to severely disrupt that industry in Kenya.
Last week, the company announced it had begun beta testing its service.
BitPesa works like this: A user anywhere in the world (except the US at the moment) can send any number of bitcoins to a recipient in Kenya via BitPesa, which will convert that money to local currency (with a 3% commission) and send it on to the recipient.
With no hidden charges or additional fees, BitPesa would make sending money back to Kenya three to six times cheaper than via traditional international money senders.
Kenya as a nation was way ahead of the rest of the world when it came to mobile payments.
This time last year, two-thirds of Kenyans were using M-PESA, a mobile currency along which passed 25% of the country’s gross national product, according to The Economist.
“Paying for a taxi ride using your mobile phone is easier in Nairobi than it is in New York,” that publication wrote.
M-PESA is not a blockchain technology, but it is a familiar technology to Kenyans.
“Everybody has a phone,” BitPesa CEO Elizabeth Rossiello told CP-Africa. “You’re on a boat in the Indian Ocean with the fishermen, and they’re checking their text messages.”
Coincidentally, Western Union tweeted this the same day BitPesa announced its beta testing.