Bitcoin payment company, Strike, has struck a deal with African payments mobile app, Bitnob, to facilitate payments into Africa.
Speaking on stage at the Africa Bitcoin Conference in Accra, Ghana, Strike CEO, Jack Mallers, said the payment partnership run on the Lightning Network thanks to a feature called ‘Send Globally.’
Using the feature, people will not have to use Bitcoin but makes it possible for people in America to send funds to Africa at zero transaction cost. This potentially changes the remittance landscape in a sub – Saharan Africa where the cost of sending remittances is about 7.8%, according to the World Bank.
Below is an illustration of how cost-free remittances will be facilitated by the respective services:
The service starts off in:
- Ghana
- Kenya, and
- Nigeria
before expanding to other countries on the continent.
Dollar payments are instantly converted to Nigerian Naira, Ghanaian cedi, or Kenyan Shillings and are deposited directly into a recipient’s bank account, mobile money wallet, or Bitnob account.
Mallers compared the instant peer-to-peer payment service to PayPal’s Venmo app, which allows rapid, frictionless payments between United States customers. Mallers said the Lightning Network has ‘just achieved dollars to Naira, Naira to dollars.’
Remittances are becoming more crucial to the African economy with each passing year. In 2021, for a second consecutive year, remittance flows to low and middle-income countries (excluding China) surpassed the sum of foreign direct investment (FDI) and overseas development assistance (ODA), revealed a recent World Bank report.
Snippets from the African Bitcoin Conference in Ghana🇬🇭.
It was a very insightful and amazing conference, and we are glad that we were present😊 pic.twitter.com/PM60fAc6ru— Bitnob⚡️ (@Bitnob_official) December 13, 2022
However, the value of what is coming into Africa is still depreciated by the aforementioned cost of sending remittances, in part due to the inefficiency of the available systems.
While the global average cost of sending remittances was 6.04% in Q4 2021, the African average was 7.8%. In this scenario, costless remittances enabled by Bitcoin may also be key to driving Bitcoin’s usage.
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