Category Archives: remittances

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!, and

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. 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. 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 and here for This last one is apparently bootstrapped by its holding company, Satoshi Citadel.


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

Why isn’t it happening, then?

In my previous entry I described the brave new world of remittances without banks, or Western Union or eye-watering commissions.
I described the world of bitcoin remittances and how it is available right now, today, to every migrant worker in the world.
And I described how all the executives in the remittances food chain are quaking in their boots at the spectre of the D-word: disintermediation. It happened to the newspaper industry and the yellow pages industry with the arrival of the internet. Their business model, as intermediaries between reader and advertiser, just melted away before their very eyes. Whole empires crumbled in record time. When was the last time you opened a yellow pages book? If you are under 20, you probably have never even seen one.
Except the remittances execs are not quaking in their boots.

There are a few reasons why their model is not crumbling just yet.

1. Lack of access and knowledge

Your average Colombian migrant worker in London (and most migrant workers everywhere) is typically of low socioeconomic background with limited access to, or knowledge of, technology. His mother back in Colombia even more so.
Their main concern is not with abstruse crypto-currencies, bitcoin wallets and exchanges. It is with working long hours for little pay and then getting part of that paycheck over to their relatives in their country of origin.
That is why they pay intermediaries to do the magic for them.
Until such a time as the process of bitcoin remittances becomes more seamless, the barrier to entry will remain too high for most.
In fact, the word bitcoin needs to be taken out of bitcoin remittances altogether.
Even if the Colombian migrant and his recipient in Bogotá could manage to climb the access hurdle, there is another one that makes most people think again.

2. Lack of trust

Right now, doing a bitcoin transaction is not for the faint hearted. It is a bit like ecommerce in the early days of the internet. To buy bitcoin for pounds, for example, I had to deposit my pounds in the bank account of a total stranger and then wait several hair-raising minutes for the bitcoin to appear in my wallet.
And while you are waiting you might remember all those things you’ve read about bitcoin being the currency of choice for transactions involving drugs, guns and assassinations on the dark web.
Then your thoughts are interrupted by your bitcoin actually arriving, yes!
But now you remember the spectacular collapse of the Mt Gox exchange and the stories you read about the crazy volatility of bitcoin. And you start to wonder what you have done and how quickly you can sell that bitcoin you just got before it goes up in smoke.
Basically the whole thing is a bit too “far west” still, too hairy for those of a nervous disposition.
But even if you get over this hurdle there may be another one lurking around the corner.

3. Lack of liquidity

You got over the technology hump and you got over the trust hump. You have your bitcoin and your mum is eagerly awaiting her pesos in Bogotá.
But can you actually sell your bitcoins for Colombian pesos?
Well, for small amounts you probably can. But at the time of writing there appears to be only one exchange for people who trade in Colombian pesos. And according to this, the total volume of bitcoin traded for pesos in a day is about 10btc.
Compare that with the number of places you can trade with dollars or pounds and the volumes traded and you start to see the problem. This market is just not very liquid. Anyone doing anything other than sending a bit of money to their relatives (like a remittances business) would start running up against this problem pretty soon. They may not be able to offload their bitcoin, or it may be uncompetitive if they do.

And yet….

I can’t help thinking that all the above problems are temporary, rather than fundamental. Over time, they will be solved. So it will happen. The remittances business model, as we know it, will cease to exist. It will be a museum piece, like a Yellow Pages book.
And I think this is important because, in a way, the profits of this industry are built on the backs of people who are often badly paid and vulnerable: the maids of the rich in gulf states; the office cleaners in London; the fruit pickers in California. So anything that puts more money in their pockets and those of their relatives back home has to be a good thing.

Bitcoin will destroy the remittances industry

Good headline. But not true. Or is it?

I think it is. Just not quite yet.

Because what is a remittance? I am sitting in London with £200 in my pocket. My mum is sitting in Colombia and needs 800,000 pesos (which, for the sake of argument is about £200). I am a nice son, so I want to send her the £200. I turn up at a remittances agent and hand over my money. Some hours later my mum magically receives 750,000 pesos.

What is this magic that transforms British pounds in London into Colombian pesos in Bogotá within a few hours? Essentially a long chain of intermediaries (banks, exchanges, agents) who change pounds into dollars, dollars into pesos and order their agents to deposit the pesos into my mum’s bank account or hand over the cash. And they all take their cut along the way (did you notice how my mum didn’t actually get 800,000 pesos?).
The cut takes two forms: upfront commissions and uncompetitive exchange rates.

But I have to pay them because otherwise who will perform the magic?

Well, with bitcoin, I can!

I get a bitcoin wallet, go to a bitcoin exchange and buy £200 worth of bitcoin, which goes into my wallet.
I then get my mum in Bogotá to get a bitcoin wallet. I transfer my bitcoin to her wallet. She can then sell the bitcoin for Colombian pesos at a bitcoin exchange.

That’s it. Done. I have performed the magic of turning pounds into pesos within hours. And no banks, no middlemen and only a tiny (and I mean pennies) fee for moving bitcoin between wallets. I didn’t even have to leave my house.

I have actually done this. And it actually works!

And this magic is available today, right now, to every Colombian migrant worker in the world. They could totally destroy the business model of Western Union, Moneygram and all those others!

So why isn’t it happening? Why don’t I hear the rush of keystrokes to get those bitcoin wallets? Why can’t I hear the sobs of panic of all those Western Union executives as they see their bonuses and share options (their very jobs) disappear?

Well, it’s never as simple as that is it?

In my next article I will talk about the things that are standing in the way of this revolution.