BitPesa, the Kenyan remittance service that enables users abroad to send money home through Bitcoin, ended its beta testing phase to celebrate its official launch last week.
The company, based in Nairobi, has been testing its pilot remittance service since May, enlisting about 15 Kenyans living in London (and expanding that number over the summer) to send money back to Africa through BitPesa.
Users around the world can send bitcoins to BitPesa, which exchanges them to Kenyan shillings and sends them along to recipient’s mobile phone account. BitPesa charges a 3% remittance fee for the service regardless of how much money is transferred. The service has enormous potential not only in Kenya, where a large number of citizens own cell phones, but to Africans in general, who lose an estimated $1.8 billion every year to remittance transfer fees.
In fact, Bill Gates tweeted today that mobile money accounts in 9 African nations have surpassed the number of bank accounts:
In Kenya, the reigning money transfer service (and BitPesa’s main competitor) is M-Pesa – a network that has worked to lower transaction fees for Africans using mobile technology, but whose fees still reach a staggering 30% for registered users and up to 66% for unregistered users.
With few alternatives to paying outlandish fees for money transfer, the African market contains huge demand for services like BitPesa – demonstrated by the speed with which news about the company has spread.
“We didn’t advertise our launch very much, we just got a handful of BitPesa testers to see if the platform worked,” Amy Ludlum, BitPesa’s head of trading and risk, told African tech site HumanIPO. “But we have got a lot of people coming onto the site and started using it even without telling anyone.”
Though BitPesa operates so far only in Bitcoin and Kenyan shillings, the company plans to target the East African regions of Rwanda, Tanzania and Uganda as it develops.
UPDATE: Thanks to our readers for pointing out several inaccuracies in our infographic. We have uploaded the updated version.