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How African crypto startups help to reduce money transfer cost to Africa

By Ndesanjo Macha

African startups are increasingly using blockchain technology and cryptocurrencies such as Bitcoin to facilitate money transfers to Africa with reduced transfer fees and better exchange rate. These startups allow users to send cryptocurrencies or even national currencies using a money transfer process enabled by blockchain technology. Thanks to this, the transfer fees are lower and unnecessary delays belong to the past.

African countries lose billions of dollars per year because of the high cost of money transfer. According to the World Bank, Sub-Saharan Africa is the most expensive region to send money to in the world, while remittances are the largest source of foreign capital to Africa and household income. Moreover, the cost of intra-Africa money transfers is double the global average.

African Money Transfer Startups

Some of these leading startups in blockchain-powered money transfers to Africa and within Africa are BitPesa, Bitsika, BitKesh, Cryptofully, and Paychant. These startups allow users to send cryptocurrencies or fiat money using a money transfer process enabled by blockchain technology thereby lowering transfer fees and eliminating unnecessary delays.


BitPesa is a Kenyan fintech, which currently uses blockchain technology to facilitate faster money transfers at a smaller fee compared to traditional money transfer institutions. Its users send supported cryptos, which are later converted into a local currency. With BitPesa, transfers can be made to the Democractic Republic of the Congo, Ghana, Kenya, Morocco, Nigeria, Tanzania, Uganda, and Senegal.

Recipients in those countries don’t need to know anything about cryptos because they will receive money into their bank account or mobile money wallets such as M-Pesa and Orange Money. Sending money with the fintech attracts 3% remittance fees for any amount being sent.


Bitsika is another blockchain-based remittance service that offers transfers to Cameroon, Ghana, Gabon, Ivory Coast, Kenya, Mali, Mauritius, Nigeria, and Senegal. The services allows users to send cryptocurrency and fiat money to other BitSika users who can then withdraw funds into their bank account or mobile wallet. The startup exchanges users’ fiat money into a cryptocurrency issued by Coinbase, USDC, so the deposited amount does not lose value. If you send up to $300, you will not pay any fees. The company made 1 million USD transactions in three months after the service was launched at the end of 2019.


BitKesh is a Zimbabwe/South African startup that uses a digital token, the DCXi (Diaspora Coin Xchanged instantly), to facilitate instant and faster money from South Africa to Zimbabwe. The token is Ethereum-based. The startup makes profit from the difference between the prices of its digital asset in different peer-to-peer markets and the Rand/RTGS dollar exchange rate.


Cryptofully is a Nigerian crypto startup that facilitates zero-fee money transfer to any Nigerian bank account using bitcoin. You can also buy airtime or pay bills for your friend or relative using the Cryptofully app. The bitcoin-to-naira  transfer takes only 3 minutes for funds to reach the recipients.


Paychant is one of the newest fintech in the crypto-remittance space in Africa. The Nigerian startup uses bitcoin to send money to Nigerian banks from all over the world. Sending $200 worth of Bitcoin costs only $1.06. The average cost of sending the same amount to Nigeria is $9. The fintech plans to expand to other African markets before the end of the year.

Benefits of Remittances to Africa

Remittances from African migrants around the world contribute significantly to healthcare, education, business funding, household food security and general well being of families. Moreover, in countries such as South Sudan, remittances account for 34 percent of its GDP.

The amount of money sent to Africa annually is more than Western donor funds. In other words, remittances are the largest source of foreign capital to Africa. However, Africa loses billions every year because of the high cost of money transfer. Cheaper and faster money transfer means families and friends receive more money to meet their needs.

Why Are Remittances to Africa Expensive?

According to the World Bank, sending $200 to Sub Saharan Africa cost an average of 8.47 percent in Q3 2020 while South Asia, the cheapest region to transfer money to, it cost 4.98 percent in the same period. South Africa has the highest cost of money transfer in Africa up to 20 percent. Cryptocurrency fees are generally below 3 percent.

Average cost of remittances. SSA = Sub-Saharan Africa. Source: World Bank, September 2020

Recognising the contribution of remittances to development, particularly in low income regions such as Africa, the United Nations’ Sustainable Development Goals aims at reducing the average global remittance cost to 3 percent by 2030.

Some of reasons for high cost of money transfer to Africa include exclusive agreements between money transfer companies and banks, excessive financial regulations, lack of competition, hidden fees and commissions, corresponding bank fees, handling charges, landing fees, etc.

Future of Remittance in Africa

Although the use of cryptocurrencies, according to UN research, is not yet very widespread in Africa, the continent is set to benefit massively from lower costs and faster transfer speed as a result of cryptocurrency remittance services.

Fortunately, recipients in Africa do not need to have crypto wallets or knowledge of cryptocurrencies to receive money. They simply need to have a bank account or a cell-phone based wallet such as M-Pesa.