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Africa’s first Bitcoin transfer service has launched in Kenya, piggybacking on M-Pesa, the country’s highly successful mobile banking platform. The service, called Kipochi, will allow Kenyans to move money abroad while dodging the hefty transaction fees charged by companies like Western Union and MoneyGram.
Kipochi — which means purse in Swahili — describes itself as a lightweight, easy-to-use Bitcoin wallet. Users only need an email address, phone number and passport or national identity number to sign up and can currently transfer up to one bitcoin a day using the service — although this is expected to increase soon.
Kipochi will link to M-Pesa, the system that many Kenyan citizens currently use to transfer money by text message within the country, and will allow them to send and receive Bitcoin across borders, converting it to and from an M-Pesa balance. Exchanging money will be made much cheaper, as Bitcoin only charges $0.04 (£0.03) per transfer.
M-Pesa is a rare example of Africa successfully leapfrogging the developed world’s legacy infrastructure and moving straight into a mobile system. In Kenya, where 70 percent of the population don’t have bank accounts, but do have mobile phones, it makes sense that non-governmental, cashless systems such as M-Pesa, and potentially Bitcoin, will thrive.
Safaricom, the network part-owned by Vodafone that launched M-Pesa, has 19 million customers — nearly the entire adult population of Kenya — of which 15 million use M-Pesa to transfer money. The service proccesses 80 transactions a second and handles transactions responsible for 31 percent of Kenya’s GDP, according to the Financial Times. It is this customer base that Kipochi will be hoping to tap into, before spreading to Tanzania and other African countries.
Kipochi’s CTO Pelle Braendgaard recently ran a Q&A on Reddit to gauge the level of understanding about Bitcoin and answer questions about the service Kipochi will be offering. It seems while it currently requires a web-enabled phone, it soon should be able to run on any mobile. Braendgaard explains that Kipochi “currently uses a combination of web and SMS”.
“We are testing a USSD implementation which allows us to bring Bitcoin to every single feature phone user in about 20 countries in Africa,” he goes on to explain.
When asked whether he thought enough people in Africa knew about and trusted Bitcoin, Braendgaard acknowledged that understanding of the currency was fairly limited at the moment. “There is some knowledge of it amongst more educated people. But ordinary people I explain it to instinctively understand the concept and benefits, without questioning the technical aspects too much,” he said, adding, “but no doubt our primary job is one of education in the beginning.”