The M-Pesa mobile payment system is huge in one of Africa’s biggest economies, Kenya. An estimated 31% of Kenya’s GDP travels through the person to person payment provider. The country has a large rural population making traditional branch banking an unattractive option. This is certainly one of the reasons that M-Pesa’s SMS based mobile payment system has caught on. But what is clear from the M-Pesa story is that the worlds ‘under-banked’ need better solutions.
Could Bitcoin be a solution for Africa’s under-banked? It’s certainly a possibility and why not start in Kenya with a population who both has a need for and a familiarity with digital money.
Kipochi is a new Bitcoin wallet aimed at Kenya’s M-Pesa users. The wallet allows M-Pesa users to send/receive Bitcoin and convert it to and from an M-Pesa balance. However, the Kipochi site explains that the wallet is not meant to directly compete with M-Pesa.
“Bitcoin and Kipochi is complimentary to M-Pesa. M-Pesa made it easy for Kenyans to send money between each other. Bitcoin and Kipochi makes it easy for anyone to send and receive money to people across the world.”
Using the wallet your mobile no. is your account number. The wallet currently works on all mobile phones, having SMS, USSD and HTML5 frontends, as well as a desktop computers. User can apply for a wallet by entering your details on the kipochi home page on a web enabled phone. You will need.
- Full name
- Mobile Number
- National ID / Passport
US phone numbers are currently being blocked. Kipochi CTO Pelle Braendgaard explains this decision via Reddit post.
“We are currently actively blocking both US IP addresses and Phone numbers from the wallet. We may support US in the future but we don’t want to risk our target audience by exposing ourselves to regulatory action by either the US or individual states.”
The wallet connects M-Pesa to the Bitcoin network via an intermediary.
“Currently an independent company receives M-Pesa from the Kenyan customer and instantly delivers bitcoin back to them. We are working on streamlining this process even further and hope to partner with exchanges and mobile operators throughout the developing world.”
The company aims to make the wallet usable on low cost feature phones using a USSD implementation. Low cost smart phones are making their way to Africa however, the majority of Africa’s mobile phones are more basic talk-plus-text feature phones.
Kipochi is looking to bring Bitcoin to the world starting with M-PESA’s 10 million+ users, especially those users who have friends and family outside Kenya where M-Pesa is not available.
“There is a fairly large Kenyan diaspora abroad. Also important is that Kenya is very international. There are many Somali, Ethiopians, Ugandans and West African’s here. I expect we will see a fair amount of flow both ways.”
Kipochi is not the only business hoping to popularize Bitcoin in Africa, but it has found a way to bring Bitcoin to an existing mobile money market. The service certainly could be a huge benefit to some M-Pesa users and it will no doubt be interesting seeing how fast Kipochi and Bitcoin gain traction in Kenya and the rest of the continent.