Bitcoin is being seen as the answer to all problems associated with the current remittance model. Sending money around the world is a tedious task and involves hefty fees. Wire transfers take weeks to clear, assuming the recipient has a bank account. Companies such as Western Union are dominating the remittance market and will continue to do so for quite some time. Bitcoin startup Beam is dropping their remittance plans for now.
Beam Dropping Bitcoin Remittance Altogether
The decision by Ghanese Bitcoin startup Beam to drop their remittance plans came as quite a surprise. Beam has offered an international Bitcoin remittance service to its customers for less than a year now and set out to solve the issue of growing remittance needs in Ghana. With no willing financial infrastructure to offer an ecosystem to Ghanaian people, Bitcoin seemed to fill that void perfectly.
It is important to note that over 70% of people living in Ghana have no access to financial services whatsoever. That means there are no bank accounts, no credit or debit cards and only fiat currency stored away in secure locations. Traditional financial institutions are not expanding their services to countries such as Ghana, as the financing costs would far outweigh potential returns.
Unlike competitors such as Western Union, Bitcoin remittance transfers are instantaneous and subject of far lower fees. Sending Bitcoin to anyone else in the world literally takes a few seconds and converting to local fiat currency was handled by Beam themselves. All in all, the process offered a lot of potential, but seemingly it’s not as viable as Beam had hoped.
Internal struggles may have contributed to this decision as well though. One of the original Beam founders, called Nikunj Handa, has left the company altogether. Falk Benke, the other Beam co-founder, took it upon himself to change the company’s business model to a gift and bill payment service in Ghana.
“Using an international debit or credit card, you can pay for utility bills, top up airtime, send gifts or even get errands done back home in Ghana. As a result, there are no direct cash payouts anymore and we no longer accept bitcoin as means of payment. But we have not given up on Bitcoin implementation altogether just yet.” – Beam owner Falk Benke told DigitalMoneyTimes.
Ghana Needs a Better Financial Infrastructure Sooner or Later
The decision by Beam also means that Ghanaians are back to square one when it comes to remittance services in the country. Such a lack of financial services is becoming painfully clear once again and various entrepreneurs active in Ghana have expressed frustration and disappointment regarding this matter.
A handful of banks are active in Ghana, even though they are not exactly welcoming entrepreneurs with open arms just yet. Banks are responsible for extending credit services to aspiring entrepreneurs, yet in Ghana, bank managers seem to be stuck in an old way of thinking. This leads to a lot of unnecessary friction in the country, which hampers any hopes of prosperity.
Source: Disrupt Africa
Images courtesy of Beam, Shutterstock