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German Bitcoin payment startup takes off in Africa

German Bitcoin payment startup takes off in Africa

A payment processing company in Europe, Bitwala, has confirmed to ITWeb Africa that its free Bitcoin to M-Pesa transfer service has taken off in four African countries - Kenya, Nigeria, Tanzania and Uganda.

The service enables Bitcoin users in Europe to send money to receivers in Africa and adds to a number of similar services recently introduced, including a new blockchain-based open source SWIFT-like network by Stellar.

Other services include Africa-focused Bitcoin payment processing startups BitMari and Bitpesa, which has been around for approximately four years.

"Africa has a multi-billion dollar remittance market, complemented by its mobile money industry that continues to flourish and attract international attention," says Bitwala's Andrea Hesler says about the rationale behind the move into Africa. "Despite the continent becoming the leader in mobile money, money transfers to and within Africa still tends to be expensive and slow. Our goal is to bring Europe and Africa closer together and boost international trades."

Hesler adds that Bitwala chose to work with M-Pesa because "Bitcoin has accomplished what M-Pesa offers: the safety and simplicity of sending money."

The M-Pesa service stands out as a pioneering initiative that has grown in use across Kenya where it was first launched in 2007 by Safaricom.

A study The Mobile Money Revolution in Kenya by William Jack and Tavneet Suri shows that 96% of households outside the country's capital, Nairobi, used M-Pesa for P2P as at the end of 2014 with an average of one transaction a month.

Though not as widely used in other African countries, M-Pesa is a popular service on the continent and beyond. Tapping into the service and its wide reach to offer free money transfer using Bitcoin, which is a growing phenomenon on the continent, will likely expedite cryptocurrency uptake on the continent considering the Europe-Africa/mobile money approach that Berlin-based Bitwala is introducing.

The startup's entry into Africa shows the growing interest in the digital currency in Africa and gives a glimpse into the future competition that is likely to develop among the players.

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