Elizabeth Rossiello, founder and CEO of BitPesa, has asserted that bitcoin-based remittance services have reduced the cost of international payments by 75%, cutting the average settlement time from 12 days to roughly 12 hours. Rossiello further elaborated on the evolving cryptocurrency landscape in Africa and the changing perceptions of major international financial institutions and mainstream media toward bitcoin.
BitPesa: Transforming African Remittance
Founded in 2013, BitPesa has achieved significant success by offering cheaper and faster remittance services to African markets compared to traditional players like MoneyGram or Western Union. Rossiello claims that BitPesa has revolutionized the African remittance industry and fostered positive change across the continent. “BitPesa was the first company in the world to establish a market between African currencies and digital currencies. We lowered the cost of international payments by 75% and reduced the time to settle between currencies from 12 days to less than 2 hours.” Currently operating primarily in Uganda, Nigeria, Kenya, and Tanzania, the company is headquartered in Luxembourg and is licensed by the UK’s Financial Conduct Authority (FCA). Beyond serving individuals and small businesses, Rossiello says numerous multinational corporations rely on BitPesa’s services to bypass inefficient and unreliable payment settlement systems that plague Africa’s financial sector.
Africa: A Unique Opportunity for Bitcoin Services
For Rossiello, Africa presents a unique opportunity for bitcoin and cryptocurrency services. The continent’s lack of economic development and weak juridical infrastructure create a pressing need for the types of services bitcoin can offer. “There has been such an under-investment in infrastructure for so long in Africa, there was a lot of opportunity to bring efficiency into this market. It’s a big opportunity.” She also highlighted the shift in attitudes among major international financial institutions and mainstream media. “There was a big misconception repeated in the media about the technology being less safe – despite the fact that the Bank of England, the World Economic Forum and the IMF have all conducted research stating the technology has a low-risk for fraud, certainly much less than cash and traditional transfer methods. The technology is here to stay and the tone has begun to change in the media. Making global payments using the bitcoin blockchain is safer, more efficient, and cheaper.”
Expanding Bitcoin Remittance Services and Competition in Africa
Citizens across Africa are witnessing an expansion in the bitcoin-based remittance services available to them. Vietnam-based, African-incorporated remittance provider Remitano has recently extended its services into Nigeria, Kenya, and Tanzania, directly competing for BitPesa’s market share. While the positive benefits of bitcoin-based remittance providers operating in Africa are undeniable, it is worth noting that most major companies remain offshore – perpetuating a model of foreign-based money transmitters profiting from African labor, a paradigm cryptocurrency remittances were initially expected to upend during bitcoin’s early, idealistic days.
Encouragingly, Zimbabwe-based remittance company Bitmari recently became the first bitcoin company to partner with an African commercial bank. This development bodes well for the African bitcoin remittance industry. African firms that gain an early foothold in the bitcoin remittance space could drive much-needed economic dynamism on the continent, potentially enabling African economies to recapture capital lost through international money transmission.