Bitcoin payments startup Yellow has launched a bitcoin voucher service in Egypt, as an alternative solution for “costly and inconvenient” payment platforms in the Middle East.
Bitcoin voucher service
Yellow’s voucher service allows its customers to purchase vouchers as “tickets” on eventtus.com with credit cards (Visa, MasterCard), PayFort (an online payment gateway in the Middle East) and Vodafone point-of-sale machines.
As the Egypt’s credit card penetration rate is below 2% and only 10% of the country’s population holds bank accounts, bitcoin vouchers may not be enough to increase the liquidity of bitcoin in the nation. However, it is the first official company in the MENA region (Middle East and North Africa) to allow customers in Egypt to purchase BTC with the Egyptian Pound.
A ‘tough market’
Yellow is the first bitcoin exchange type business to be introduced in Egypt since the launch of Kipochi in Africa back in 2013. Kipochi is a bitcoin wallet service based in the UK which partnered with M-PESA in 2013 to introduce the first bitcoin wallet in Africa.
According to Yellow, 70% of the 15 countries in the Middle East are either unbanked or have poor payment system infrastructures. Moreover, merchants usually pay around 5% in transaction and processing fees.
The Bitcoin startup recognizes Egypt’s low credit card acceptance rate, high merchant fees, expensive payment solutions and also the fact that Egypt does not have an established bitcoin exchange despite the rapid growth in Egypt’s e-commerce industry.
Wamda, a platform of programs and networks for entrepreneurs in the MENA region (Middle East and North Africa) reported that only 10% of the country’s population holds bank accounts and less than 2% of the population has credit cards. Later in the report, Wamda stated:
“In general, Egypt is a tough market, due to high computer illiteracy, a poor telecoms infrastructure, and weakened economic conditions.”
Despite Egypt’s poor payment infrastructure, Yellow still launched the bitcoin voucher service as it believes that “Bitcoin can revolutionize payments in the region.” Yellow’s founder, David El Achkar, explained that “We’re seeing some activity in Kuwait, but it’s still low. We’re also starting to see a growing interest in KSA, Tunisia, and Egypt.”
Egypt’s fledgling Bitcoin industry began showing signs of life in 2014 with the announcement of an Australian bitcoin exchange Igot to expand its services to Egypt and AMECO, the largest disposable syringe and hypodermic needle manufacturer in the Middle East (based in Cairo) beginning to accept BTC. Unfortunately, there has been no significant progress since last year in Egypt as AMECO is still the only business in the entire country to accept bitcoin.