by Rachel Ogbu
“Bitcoin is going to make a huge difference when it starts to get accepted by merchants in Ghana,” says CEO Nikunj Handa. “People won’t need to change Bitcoin to any other currency so there will be no broker fees involved and people can get really very low-cost transactions. But Bitcoin is in its early days yet, and we need banks and merchants to catch up.”
Many of us didn’t know that bitcoins were already tendered in Africa with Johannesburg having the first Bitcoin ATM on the continent and now a new report suggests that it could even wipe out Money Transfer Operator (MTOs) like Western Union and MoneyGram who are stationed in 25,000 and 32,000 locations respectively across Africa,
For those of us who don’t already know, Bitcoin is an innovative payment network and a new kind of money. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.
The report by the Overseas Development Institute shows how significantly the fees to send and receive money via MTOs can be reduced using Bitcoins considering the average charge to transfer $200 to Africa is 12%. If you send $200, you pay $24.
According to CNN reports:
75% of the populationdon’t have a bank account, experts say the currency could help millions of people pay bills and get to grips with their finances.
Beam is a service in Ghana that converts Bitcoin sent from abroad into the local currency, cedi. Since launching three months ago, it has attracted 30 users who pay a 3% fee on each transaction rather than the average 12% from traditional transfer services.
So is this a step in the right direction for us? We would like to hear your views but first we take a look at what the critics are saying:
Critics say the fees associated with buying crypto-currency must be taken into account when considering the cost of remittances. As well as overcoming the technical challenges of obtaining Bitcoins at an “exchange,” users have to also pay a commission, CNN reports.