A Kenya-based digital payment startup using blockchain technology is seeking to partner with more Asian companies and plans to open an office in the region next year.
The company, BitPesa, offers international payment services to companies, and it can execute transactions in as little as one hour. That quick turnaround means risk exposure due to exchange-rate fluctuations is reduced by about 65% annually, compared with the traditional way of wiring funds through banks. All transactions and related activities through BitPesa are done online.
The four-year-old startup’s service works like this: A sender registers online and sends funds through local bank transfers or via electronic funds to BitPesa, whose team then purchases bitcoin and sends it to a receiving bank account in another country.
BitPesa’s commissions are calculated into the exchange rates, similar to how exchange counters at airports operate. The company says its exchange rate is typically much more competitive than banks, and there are no additional fees. Pesa means “money” in Swahili.
BitPesa offers an alternative service in which it matches users in the same country. For example, if a sender and a receiver in China carry out transactions with companies in other countries, BitPesa pays the receiver in China from the funds it collects from the sender in China.
Most of the company’s transactions are between customers in Europe and Africa, but “now we are seeing more between Africa and Asia,” said Elizabeth Rossiello, BitPesa’s chief executive and founder. As of March, about 10% of the transactions that the company handles, which is roughly $24 million, involve countries in Asia. Its platform is often used to pay fees to suppliers or to pay wages across regions.
The company has been expanding. In February, it announced the acquisition of TransferZero, an online transfer platform based in Spain, for an undisclosed amount. BitPesa is licensed as an authorized payment institution in Africa and Europe, providing compliance on behalf of its customers.
Africa is “a huge growth market” with an expanding middle class and the need for goods such as autos and electronics, Rossiello said. For Asian companies wanting to enter the market, BitPesa is “an easy way to start,” she said. “Working with a licensed company like ours would reduce your currency risks, and manage your intra and external transaction.”