I regularly spend some time in Kenya. Paying for services and getting cash is one of the first problems a traveller faces. Until last year I solved this with an ec card, which works on some ATMs in Kenya. A credit card also works, but incurs more expensive fees.This year for the first time I paid for everything exclusively with bitcoins, and this worked exceedingly well. I needed an intermediate step to feed the bitcoins into the M-PESA mobile payment system, which is unbelievably popular in eastern Africa. The intermediary is LocalBitcoins.com, which connects me to the bitcoin dealers in Kenya, of which there are about 20.This worked extremely well for three reasons:There seems to be a shortage of bitcoins in Kenya, so the dealers trade for free when they buy bitcoins. (They take their deserved cut of roughly 5% when they sell bitcoins.)The dealers bear the risk of failed trades, so my risk was zero. I release the bitcoins from the LocalBitcoins.com escrow only after I have received the Kenyan money.The dealers are very fast. Selling bitcoins for Kenya Shillings (KSh) usually takes only a few minutes.I met one of the biggest dealers in person to do a direct cash deal through Mycelium's Local Trader. We had dinner together, and I had a very good impression of the way he ran his small business.The normal way is that I offer a deal to one of the traders through LocalBitcoin.com, wait for the Kenyan Shillings to appear in my M-PESA account, then immediately release the bitcoins from the LocalBitcoin.com escrow.The only little downside is the less than perfectly designed LocalBitcoins.com web site, which, I think, should be improved with a good look at the typical workflows. But I learned how to use it soon enough.M-PESA is based on your mobile phone SIM card, issued by Safaricom (related to Vodafone), the biggest mobile service provider in Kenya, which runs the M-PESA system. You buy a Safaricom SIM card, produce your passport, and can immediately open an M-PESA account, which is tied to your passport and mobile phone numbers.M-PESA has some stringent limits. The maximum amount in an M-PESA account is KSH100,000 (~US$1,000). The maximum transaction size is KSh70,000. The total of all transactions in one day, adding the absolute in and out transfers, is limited to KSh140,000.This can be alleviated, however, by your travel companion holding another M-PESA account and by refilling your M-PESA account quickly through LocalBitcoins.com. For example, if you had to pay KSH140,000 for a rented car, you could pay KSh70,000 and refill these KSh70,000, which would exhaust your daily transfer limit. But on the next day you can pay the second KSh70,000 and refill again, if you like. Or your travel companion uses his M-PESA account to add the second KSh70,000 on the spot.Every supermarket, every petrol station, every hotel, and practically all businesses in Kenya accept M-PESA. You can also give any person money by transmitting it directly to their mobile phone, which incurs a small fee. The presence of the other person is not required.A typical M-PESA payment, like at a gas station, takes less than a minute. You enter the 6-digit business code, the amount, and your PIN on your mobile phone. The business and you instantly receive an SMS confirming the payment, and that's it already. Only tips are given in cash.If you still need cash, every city and every village in Kenya is littered with M-PESA shops, where you can pay cash into your M-PESA account or withdraw cash from it.Moreover, many ATMs in Kenya allow you to withdraw cash from your M-PESA account.Kenyans have additional advantages, because they can link their M-PESA account to their bank account, and thus can move money in and out of their bank account through M-PESA.Technical detailsOn a smartphone you will find an app named SIM Toolkit after you insert a SIM card with extra functions. Opening the app shows a menu, including M-PESA commands.M-PESA transactions do not require an internet connection. They are done via USSD and SMS. via /r/Bitcoin http://bit.ly/294mJaY
No comments :
Post a Comment