Kenya’s BitPesa has raised $5m from Japanese insurance group Sompo Holdings in a move expected to revolutionize cross-border payments and insurance services globally. Sompo will use Bitpesa’s technology to extend its presence in the international remittance service market and use it for its insurance services.
The two firms also aim to solve international remittance and cross-border payment obstacles by reducing international remittance fees and lengthy processing times to facilitate global trade and contribute to macro-economic development.
Using virtual currencies, Sompo and BitPesa will resolve the problems of expensive exchange fees and reduce long processing times. With this in mind, the firms plan to revolutionize the way businesses and individuals make financial transfers across borders.
This is not BitPesa’s first deal to be secured from Japan. In September, BitPesa partnered with Japan’s remittance firm SBI Remit to make it easier for Africans to buy Japanese products and reduce friction, improve efficiency and interoperability for cross-border payments between Japan and Africa.
“Our fees are much lower than most banks’ transfer fees.” In addition, the transfer happens much faster than the two weeks it would take most banks, depending on the amount. Using SBI Remit’s payout network, we transfer the money to SBI Remit, and they can pay out to their large Japanese network. There is a flow of funds by Africans to Japan.” Elizabeth Rossiello, founder and CEO of Bitpesa said.
The two firms said they would focus on industries such as Japanese used car dealers, Japanese cosmetics and electronics and used cars. The deal aims to simplify cross-border payments and reduce the forex risk between Japanese exporters and African buyers. BitPesa has operations in Kenya, Nigeria, Tanzania, Uganda, Senegal and the Democratic Republic of the Congo, markets which heavily import from Japan.
The deal was signed after Bitpesa had acquired TransferZero, an international, online money transfer platform that specializes in sending money to consumers and companies in 200 countries using over 50 different currencies. Founded in May 2016 by Luis Cambronero, TransferZero is licensed by the Bank of Spain as an authorized payment institution and is a partner of Bankia, Spain’s third largest bank and has pioneered a number of innovations in the European FinTech sector.
TransferZero also has network integrations on four continents, and a team with decades of experience working with enterprise clients in need of global payment solutions. They are the only remittance company that does not charge a fee, aside from a small percentage in the FX. All these deals are important for Sompo.
Sompo Holdings will utilize BitPesa’s technology and, through various pilot programs related to treasury and settlement services, seek to enhance its presence in the international remittance market while applying the same technology to the insurance sector.