BitPesa is a money transfer service that deals with digital currency such as Bitcoin into African currencies. It was designed to cut down the high costs of remittances from the diaspora; therefore, one can send money to Kenya and Tanzania from anywhere in the world. It was launched in 2013 in Kenya and its name is a play on the words Bitcoin and Pesa, which translates into money in Swahili. Bitcoin is digital currency that is not affected by inflation and can be used to move money over the internet. As a result, Bitcoin and other cryptocurrencies (or digital currencies) have gained popularity.
BitPesa has managed to raise a total of $1.7 million in funding and has dramatically cut the costs of sending money across the world. It offers competition to such remittance heavy weights as Western Union and MoneyGram by offering cheaper rates (it charges a 3% transaction fee). How it works is that when one sends bitcoins, BitPesa can convert it into an African currency at a favorable exchange rate. The receiver can then withdraw the money from a bank or from their mobile phones. This essentially means that even those without bank accounts can still receive money from abroad. One can purchase bitcoins through a Bitcoin exchange or marketplace such as Bitstamp, with the maximum amount of money allowed per transaction Ksh. 70,000/-. The use of BitPesa thus eliminates the need for a credit card and is a quick, secure means of sending money.
The use of BitPesa is not only limited to individuals, as businesses can also use the service to pay employees and suppliers in Tanzania and Kenya through e-commerce payments and global invoicing. BitPesa also absorbs all risks associated with foreign exchange. The venture has been so successful, in fact, that its CEO, Elizabeth Rosiello, spoke at the 2015 Global Entrepreneurship Summit, which was co-hosted by Kenyan President Uhuru Kenyatta and US President Barrack Obama.
BitPesa may be the financial service of the future, especially due to the growth of bitcoins. Its reduced costs and accessibility make it ideal for African users, both in Kenya and Tanzania, as well as abroad. The impact of remittances in growth and development in Africa is large, and low transaction rates only serve to reinforce this. BitPesa has the potential to completely change the means in which Africans send and receive money.