MeXBT’s New Service Unlocks Mexican ATMs

Remittances have been one of the most talked about use cases for the digital currency, bitcoin. Bitcoin’s payment network does for payments what email did for messaging – cheaper, faster and global. Whether it is New York, Mexico City or Shanghai a bitcoin transaction costs only pennies and can be received in a hour. This is considered by many to be a vast improvement over the current remittance industry leaders, Western Union and MoneyGram, who on average charge 8 percent and can take days to send money.

While Bitcoin has taken off in Asia, Europe, and the United States – China alone accounts for 70 percent of the trading volume on exchanges, and the USA has seen hundreds of millions in venture capital invested in Bitcoin companies – Latin America has not seen the growth and adoption of bitcoin.

"The bulk of exchanging Bitcoins is currently done in US dollars and Chinese yuan, but it could become popular in Latin America because of its usefulness as an exchange of value between individuals over borders and in smaller amounts,"
— – Gabriel Miron

The US-Mexico remittance market is the fourth largest in the world, an obvious candidate for Bitcoins disruptive potential. Despite bitcoin’s advantages, the digital currency has barely made a dent in the $23.02 billion flowing from the US to Mexico. The US’ strict financial regulations have made it hard for bitcoin companies to set up a compliant bitcoin solution.

Gabriel Miron has been spending the last two years trying to solve this problem. He says he became obsessed with the potential of bitcoin’s global payment system, shortly after discovering the currency in 2012. After researching Bitcoin, to fulfill his vision of the digital currency helping the region’s poor, he quickly founded MeXBT, Mexico’s first bitcoin exchange.

“Bitcoin will have a huge impact in Latin America. 68 percent of the population live in the bracket of less than 10 dollar income per day, without access to financial services [such] as credit, insurance etc…  With Bitcoin they gain access to a global economy”
— – Miron

Mirons newest offering, SendBitcoins.mx, does not touch US dollars. Without the burdensome and expensive American KYC and AML regulations, the company is able to retain the benefits of bitcoin remittances for the large unbanked Mexican community.

In 7 Latin American and Caribbean countries remittances account for 10 percent or more of the country’s GDP. Mexico is the largest remittance market in the region but Guatemala, El Salvador, Colombia and Brazil all have multiple billion dollar remittance industries. Like Mexico, they too suffer from high fees — with the average among the countries being 7.3 percent, according to the World Bank.

Miron has been spending a large portion of his time educating, and increasing awareness around the currency. He has set up numerous bitcoin meetup groups and established the country’s first bitcoin conference. His second priority has been building his exchange and drastically raising its liquidity. The venture backed exchange has grown from a few bitcoins in daily volume to several hundred.

Mirons company is taking another step towards its dream of accessible bitcoin remittances in Latin America. The companys new service, SendBitcoins.mx, allows senders to sell bitcoin online, with recipients receiving pesos from ATMs all around the country. The service charges only one percent, a fraction of the competitors fees. The pesos are made available to the recipient within 6 business hours, much faster than the days or weeks traditional players in the space take. MeXBT believes this service could enable Bitcoin to make headway in the US-Mexican market.

"Most people sending remittances are required to visit a property and there are exchange rates and charges for the use of the service, which make it difficult to transfer amounts under $ 200 US dollars or its equivalent in other currencies; that’s where SendBitcoin shines, charging a minimum fee, gives viability to transfers of small amounts,"
— -Joel Cano, Chief Operations Officer of meXBT

Sendbitcoins.mx’s ATM network was originally developed by CoinSafe, a Seattle based bitcoin company acquired by MeXBT late last year. The company was able to take advantage of a mobile money and ATM program called Dinero Móvil, established by the large international Spanish banking conglomerate, BBVA. The original intent of Dinero Móvil was to allow the country’s large unbanked population to access funds from a network of ATM’s, without a bank card. The recipient receives a 12 digit number by text or e-mail, and can use this to withdraw funds at any Bancomer ATM.

“It worked great. I sent them the bitcoins, and they sent an automated email telling me in 2 hours it would be ready. Within an hour they emailed me the code to use at the ATM. At lunch I passed a bancomer (they are everywhere, it’s one of (or the?) largest bank here) ATM. Entered the code, and got the money within 30 seconds,” said Eric Springer, a software engineer living and working in Mexico.

The investment arm of BBVA, BBVA Ventures, recently took part in Coinbase’s record setting $75 million funding round. A BBVA spokeswoman told BNC News that the bank does not have an official stance on the crypto currency.

Mirons Mexican bitcoin exchange is not the only company with their eyes on ATMs’ potential for unlocking bitcoin remittances. Spanish Bitcoin app developer, Bit2Me, recently enabled over 10,000 atms in Spain to sell bitcoins and looking to bring the service to Mexico.They are in the process of developing a similar product for 15,000 atms in Mexico.

MeXBT is in beta testing, and there are limitations that cap the total amount of peso that can be withdrawn from the service. There is a daily maximum of 3,000 pesos ($225 USD) for individual users as well as a total cap for the amount of pesos that can be withdrawn from the service. The current limitations are due to regulatory concerns, but MeXBT hopes to lift restrictions as the service leaves beta.

MeXBT could not provide a release date for the service as it “depends of several things we are working on”, said Miron, but they hope to do it soon.