An international bitcoin startup is bringing bitcoin remittances to new countries and demographics with a new enterprise remittance solution leveraging bitcoin.
BitNexo launched a remittance services earlier this year between China and Chile, two countries with increasing economic ties. The startup uses bitcoin to send the money, but doesn’t require customers to buy or handle the digital currency. The service only uses it as a payment channel and delivers the money to bank accounts in either country.
“As we’re currently working between China and Latin America [a client] could be a small electronics exporter from China selling goods to Mexico, or a boutique Chilean winery importing to Shanghai,” BitNexo CEO Darren Camas said in an interview with Nicolas Bry, a senior VP at Orange Innovation Marketing Technology.
BitNexo was founded by Camas, Spanish entrepreneur Hector García and Chilean entrepreneur Javier Salcedo. Camas and Garcia are Startup Chile graduates, an accelerator created by the Chilean government, and met at the bitcoin meetups in Santiago.
Camas also has experience from several bitcoin businesses, including global bitcoin exchange TradeHill 1.0, where he led business development, and pan-Latin American bitcoin exchange CompraBitcoin, where he was a Partner.
The BitNexo team chose Chile and China as their first remittance corridor as the founders have strong connections in each country. There is also a growing amount of exports and imports between the two nations, with a recent agreement to expand free trade between them as they celebrate the 10th anniversary of their free trade agreement.
“One of our first customers is an automotive dealer who bought a tire recycling plant in China and needs to pay expenses in RMB, and sends multiple transfers every month. We’re currently saving him about 40% in fees from what he was paying with wires.”
— – Darren Camas
BitNexo’s founders have done a lot of networking in the Latin American communities in Shanghai and the Chinese communities in Santiago, Chile’s largest city, citing that trust is a big factor. They also see expats in each country as the biggest drivers of the commerce between the nations.
Each year more than $26 billion is sent between China and Latin America because of small and medium sized businesses, and a large amount is heading to Chile. Imports to Chile from China have been increasing roughly 22% year over year, something that is likely to continue.
“Another distribution channel is through our partnerships with trade organizations. One such organization would be Wines of Chile, a non-profit which focuses on promoting Chilean wineries abroad.”
— – Camas
The bitcoin startup had been quietly beta testing its remittance service, in the the Chile-China corridor, until launch in April. BitNexo has since won won "Best seed stage startup in Shanghai" for SeedStars World. Finals of this contest is going to be held in Switzerland in February 2016. The firm also graduated from the startup accelerator Chinaccelerator, a well-known and respect program in the country, receiving $60,000 in funding and mentorship from the program’s large business network.
The startup is currently one of several bitcoin startups competing in a Latin American fintech contest run BBVA, a large Spanish multinational bank. The winner has the chance to win 30,000 EUR and mentorship from the large financial institution, as well as the chance to partner and build a product. BitNexo also began piloting their service for Mexico and Philippines, which they plan to launch to the public later this year.
“Bitcoin is a unique solution to cross-border commerce as both a transaction medium and an underlying asset which insures cross-border value transfer. However, the technology has suffered from slow adoption and poor public perception. BitNexo breaks down the barriers to bitcoin by managing the technological and financial knowhow to offer a simple solution to cross border SMBs so a company can pay its overseas provider using its home currency and banking system. The customers never have to purchase, store, or manage bitcoin.”
— – BitNexo
While BitNexo is focusing on business customers, the founders did note they would likely be a consumer product in the future, as more and more people move between Asia and Latin America.
“There is a growing community of both Chinese people living in Chile and Chileans in China, businessmen, merchants and employees, who also need to transfer money to their homes and families in a fast and efficient way.” Camas added, “We think we will generate a huge impact in their life too.”