Mobile money and digital currencies are being used to boost remittances into Africa and drive down the cost of sending money to the continent, experts said on Wednesday.
Speakers at the Mondato Summit Africa in Johannesburg on Wednesday said remittances contribute more than 2% of the gross domestic product (GDP) in most sub-Saharan African countries.
And more Africans living in the diaspora are turning to technology to send money home to family and friends.
“There is a need to put down prices for remittances and mobile money is one way to do that,” said Jonathan Johannesen, Banque Internationale pour l'Afrique au Congo (BIAC).
One company that is using digital currency to boost remittances is BitPesa, which is tapping into Bitcoins to help expat Africans send money home to the mobile wallets of their friends and family.
BitPesa co-founder and chief executive officer, Elizabeth Rossiello, said on Wednesday at the summit that users buy Bitcoins and can then transfer their coins’ values into African currencies using the company’s technology.
The value of the Bitcoins are then remitted, and can be redeemed from mobile wallets in Africa.
The company is operational in Kenya, where mobile money wallet holders can redeem the value of Bitcoins sent from abroad in Kenyan shillings.
Rossiello said BitPesa is also working with big airlines on a “tourism prepayment” solution.
She added that digital currencies can directly integrate with mobile money platforms.
“There is direct integration and this does away with fears on the lack of interoperability within the mobile money space. Digital currencies such as Bitcoin can be integrated and accessed by anyone,” she said.
Matt Shakhovskoy, the associate and research partner at Dalberg and CGAP, said it is encouraging that money remittances into Africa are taking on different dimensions.
He said this brings about efficiencies and helps distribute financial accessibility to areas previously sidelined.
“New platforms create efficiencies and increase access to all areas,” he said.