Monthly Archives: December 2015

Credit card giant tests the bitcoin remittance waters

Coindesk has an exclusive look at a prototype bitcoin remittance app that card giant Visa has built with startup Epiphyte.

In the proof-of-concept a user associates their Visa card to the remittance app and then has to also have an account with a Bitcoin remittance service. In the demo, this was done with BitPesa, the East Africa remittances service.

Crucially, the recipient of the remittance does not require a bitcoin-related account. BitPesa generates a Bitcoin address for the recipient, converts the Bitcoin to Kenyan shillings, which are transferred to the recipient by M-Pesa, the dominant mobile money channel there.

Coindesk sums up the process thus:

The app, then, has allowed ‘John’ to send 25 pounds from a Visa card to his grandma in Kenya, who received Kenyan shillings on her phone, with the whole process taking about six steps.

In between, the funds were taken from the Visa-linked account, converted to bitcoin and sent to an address generated by BitPesa, then converted into Kenyan shilling and transferred to the receiver’s M-Pesa account.

The question for me is: would anyone care? Does this solve a real problem? Ultimately, as I have said before, most people who send money back home care not a jot how it gets there, as long as it gets there and they have to pay as little as possible in commissions. At best, bitcoin will be a silent enabler in the background. And it will only be an enabler if it can demonstrably help reduce the friction and the transaction costs.

Obviously Visa knows that too: The article concludes that the credit card giant and its partner are now engaged in user research and that will inform the next steps in the evolution of the concept.

But whatever the outcome, it is surely another sign that the remittance industry is ripe for disruption, targeted from all sides, the start-ups and the big, established companies. And they think bitcoin can help them with that disruption.