Bitwala announces fee-free Bitcoin to M-Pesa service

Bitwala recently announced that their customers are able to transfer bitcoin to any M-Pesa account in four African countries. Available in Kenya, Tanzania, Nigeria, and Uganda, this new service is “free of charge – forever,” according to the announcement.

The latest World Bank data for sub-Saharan Africa shows that only 34 percent of adults age 15 or higher have a bank account. Kenya has the highest bank account ownership among adults age 15 or above, at 75 percent, while Uganda and Nigeria have 44 percent and Tanzania has 40.

The total combined population of the four African countries is almost 322 million. Out of the four, Nigeria has the largest population with 182 million in 2016, while Tanzania’s projected total population is 50.14 million. Uganda has a population of 42.32 million and Kenya has  approximately 47.25 millions. Altogether, there are almost as many people in those countries as there are in the US today, at 324.65 million according to the US Census Bureau.

“We want to be a part of the mobile money revolution, and we’re stepping it up a notch by enabling anyone to send money to any MPesa accounts using bitcoins.”
— – Jörg von Minckwitz, CEO of Bitwala

According to mobile tech news Mobile world Live, M-Pesa already dominates the Kenyan mobile money market of 31 million mobile money service subscriptions. M-Pesa has 20.7 million subscribers, or 66 percent of the market using the service through Safaricom.

The platform provides a mobile transfer service for both personal and business payments, developed by mobile phone operator Vodafone and launched commercially by its Kenyan affiliate Safaricom in March 2007. M-Pesa allows money to be sent directly from subscribed cell phones without the need of a bank account. Safaricom is 35 percent owned by the government of Kenya and 40 percent owned by Vodafone.

The World Bank states that poor infrastructure is the primary reason that mobile banking has spread widely in sub-saharan Africa. “Traditional banking has been hampered by transportation and other infrastructure problems,” the report states. However, "the region leads the world in mobile money accounts," the World Bank states. “While just 2 percent of adults worldwide have a mobile money account, 12 percent in Sub-Saharan Africa have one."

A December 2016 study by a Georgetown economics professor and a colleague at MIT shows that M-Pesa is now used by 96 percent of Kenyan households. The researchers also noted that "the expansion of M-PESA lifted 194,000 households, or two percent of households in the country, above the poverty line."

In 2015, Safaricom revealed that the average monthly value of person-to-person M-Pesa transfer is Kshs 106 billion, person-to-business is Kshs 23.5 billion, and business-to-person is Kshs 27.8 billion per month. Their service contributes over 40 percent of the country’s GDP, Safaricom stated at the time.

“We are on a mission to provide everyone with the fastest, safest and most affordable way to send and receive money.”
— – Bitwala

Based in Kreuzberg Germany, Bitwala’s popular service offers a Bitcoin wallet, a Bitcoin Visa debit card, and a range of money transfer services that allows users to send bitcoin or one of 20 national currencies to over 120 different countries. Although not available to US residents, Bitwala claims over 15,000 users globally and the, “world’s leading Bitcoin prepaid card” using the Visa network.

The company has been growing and expanding their services since launching early in 2015 as a European bill payment service. Bitwala received €800k in a seed fundraising round almost a year ago, and has been expanding to countries across the world ever since. The service now offers some of the cheapest money transfer rates in the world, with a 0.5 percent flat rate in ten different currencies, as well as a one percent fee plus €15 using most any other currency.

The latest company announcement marks the first time Bitwala has made any specific move into Africa. “MPesa was designed as a solution for foreign workers in sending remittances back home. It was also designed to provide unbanked people with a more affordable and easy payment system,” states Bitwala. “It has enjoyed a high level of adoption, with over 96% of households outside of Nairobi having at least one MPesa account today.”