Monthly Archives: November 2015

Who’s who in bitcoin remittances (2)

Abra

This California-based company raised $12 million in September 2015 to develop its app.

In a interview, CEO Bill Barhydt explained:

Abra is the world’s first peer-to-peer digital cash money transfer network.That m eans consumers can store and manage money directly on their phone  —  no bank, no financial intermediary  —  and they can transfer money directly to any phone in the world that also has our app on it. Transfers are peer-to-peer, meaning no middleman touches the funds: no bank, no Western Union, nobody.

According to this techcrunch article, the company’s app lets users around the world transfer funds denominated in any currency.

Abra achieves this by instantly converting deposited currency to bitcoin, which are stored locally on the user’s device.

This means that the company never actually touches any funds, meaning it isn’t required to deal with the regulatory issues of transmitting money.

Users can deposit money into the app either via a linked bank account, or by utilizing Abra’s network of Abra Tellers, which are like human ATM machines.

After a user’s account is credited with funds, the money is instantly converted to bitcoin behind the scenes, but still denominated in a traditional currency.

The users are protected from bitcoin’s volatility by Abra making a hedging contract behind the scenes with a counter-party. But all this complexity is transparent to the user, who may never even know that they are sending money via bitcoin.

Coinnect

Coinnect is not exactly a general remittance service, but a point-to-point money transfer service between Argentina and Mexico.

It was set up by two bitcoin exchanges, Argentinas SatoshiTango and Mexico’s Volabit.

If you have a Volabit account and your correspondent in Argentina has a SatoshiTango one (or the other way around), then you can deposit Mexican pesos into yours and send them to the Argentinian account. The recipient will receive Argentinian pesos, but the transfer is done via bitcoin.

Volabit co-founder Tomas Alvarez said in an interview with CoinDesk:

“We believe that bitcoin has huge untapped potential to change international money-sending beyond traditional remittances. Due to the inertia of old habits and trust lacking in new technologies, however, bitcoin services have failed to meaningfully compete against existing services thus far.”

Hive

A recent entrant in the peer-to-peer money transfer market is Spanish startup Bit2Me, which recently has won $10,000 for its remittance app Hive.

Details are scant, but according to Coindesk, Hive is a peer-to-peer app that leverages blockchain technology to enable the transfer of funds between users, who can top-up their accounts with either bitcoin or credit cards.

Who’s who in bitcoin remittances (1)

Here’s a list of companies I know of that are in the bitcoin remittances market. If you know any more, get in touch!

Coins.ph, Rebit.ph and Bitpesa.co

The first two of these serve the migrant Filipino market and the third does the same for emigrant Kenyans and Tanzanians. These are all nations with sizeable diasporas who send large amounts of money back to their countries.

Rebit.ph is the only pure-play remittances business. The other two are mainly bitcoin exchanges with various payments services that includes remittances.

They all work along similar lines when it comes to sending money. You sign up from any country and can load up bitcoin into your account. After you do that, you can send the Bitcoin to your recipient in Philippine pesos / Kenyan shillings. So basically the recipient does not even have to know about bitcoin, but the sender most definitely does.

This has obvious shortcomings. As i pointed out before, your average migrant worker is not interested in crypto-currencies. So registering with this service, buying bitcoin and sending it is probably not something that is going to attract large numbers of users.

In fairness to these services, this is probably not the way they want to grow their business, one migrant worker at a time. What they seem to be trying to do is create a good “off-ramp” network of cash-out points in the destination country (like other, more traditional remittance services have) and get others in the source countries to do the “on-ramping”, i.e. get to the migrant workers and “sell” them their services. Rebit.ph has a whole area of its API for such “vendor” partners.
If going via bitcoin is more cost-effective than going via, say, Moneygram or Western Union, then everyone (migrant workers, resellers and the remittance start-up) wins.

See here for Bitpesa’s funding, here for Coins.ph and here for Rebit.ph. This last one is apparently bootstrapped by its holding company, Satoshi Citadel.

Bitspark

Hong Kong-based Bitspark started as a bitcoin exchange but in May they announced they were halting all bitcoin exchange operations and instead, would be focusing all of their attention on the remittance market.

Last July it was announced that they had joined Accenture’s FinTech Innovation Lab Asia-Pacific 2015, a three-month programme that provides mentoring, coaching, networking and investment opportunities to seven startups. BItspark was the only bitcoin and blockchain startup in the lineup.

Their website is currently remarkably content-free but they are due to present their decentralised blockchain remittance platform to potential investors at the end of the 12-week accelerator. I await with bated breath!

Next up: The peer-to-peer model