BitPesa, a digital cash management solution that leverages block settlement to reduce costs and accelerate payments in cross-border markets, partnered with SBI Remit, Japan's largest transfer service provider, to facilitate purchase of Japanese products.
Both companies are taking advantage of blockchain technology to reduce friction, improve the efficiency and interoperability of cross-border payments between the two continents. This partnership will help companies to grow faster between Japan and Africa.
Simplified conversions
The partnership allows the African customer to deposit funds in its local currency directly into BitPesa's local bank account, Elizabeth Rossiello, founder and CEO of Bitpesa, based in Nairobi, Kenya told NCC. "They do not need to convert," she said. "Our fees are much lower than the transfer fees of most banks." In addition, the transfer occurs much faster than the two weeks it would take most banks, depending on the amount.
"By using SBI Remit's payment network, we are transferring the money to SBI Remit and they can pay on their vast Japanese network," she said. "Africans pay money to Japan."
Focus on key industries
Although many industries are developing in the Africa / Japan corridor, BitPesa and SBI Remit will focus on certain industries, such as Japanese cosmetics, electronics and used cars. Japanese car dealers, for example, will be able to improve their payment operations and reduce the exchange rate risk between Japanese exporters and African buyers. The BitPesa commercial collection solution will also enable them to develop more easily in new markets.
This partnership is the first with an African company for SBI Remit, a subsidiary of SBI Group, which has helped pioneering financial services, especially on the Internet, in Japan.
BitPesa's customers range from African and multinational companies paying suppliers as far away as China and the United Arab Emirates to global transfer companies using API services for payments to mobile money operators and banking networks in Kenya, Nigeria, Tanzania , in Uganda, Senegal and the Democratic Republic of Congo
One of the biggest demands in Africa is on used cars, Rossiello said. A Kenyan buying a Japanese car online will usually have to find a bank that will convert his Kenyan currency into a G20 currency, then convert it into a Japanese yen before sending the funds to the Japanese company's bank account.
Some Japanese companies have accounts in African countries, she added, but that does not remove the wait for several weeks for currency conversion.
"Whatever their mode of operation, they still have to go through a complex currency conversion," she said.
Simplify Cross Continental Trade
The partnership also responds to a request from Japanese companies to enter the African market.
More than 400 registered Japanese companies are already active in Africa, including cosmetics, heavy machinery and used cars, she said.
"They need a more transparent way for African customers to pay for them directly," Rossiello said.
"While there is growing interest in Africa, there is still a lot of hesitation because of the market conditions and the lack of hybrid financial infrastructure to support the agile growth of companies," he said. she declared. "Through our partnership with SBI Remit, we have created a secure, fast and easy-to-use forex solution for Japanese companies that buy and sell eight currencies in border markets with G20 currencies, including the Japanese yen. Businesses can do this instantly from and to all major African bank and mobile money accounts.
African governments create obstacles
Japanese companies and other Asian countries have long been reluctant to do business in Africa because of currency controls by African governments, she noted. "Central banks (African) are afraid of the value leaving the country," she said.
It is also difficult to find services to convert African currencies into G20 currencies. When such services exist, they involve high fees.
Nor are there direct conversions between African currencies, Rossiello said. To convert one African currency into another, it is usually necessary to convert a G20 currency first. Conversion costs are particularly high for small businesses.
"It's not a small problem on the African continent," said Rossiello. United Airlines, for example, stopped operating in Nigeria in the early 2000s due to repatriation problems, she said.
Making the funds more liquid reduces the risk of a Japanese company entering the African market, she added.
More partnerships to come
BitPesa, which is authorized by both the Financial Conduct Authority in the UK and the Bank of Spain to operate in the European Union, will seek more similar partnerships from SBI Remit.
In the past, BitPesa has focused on the Europe / Africa corridor, one of the most active corridors in the world, she said.
"We are looking at how we can also open access to Africa to other parts of the world," she said. "Our vision is to accelerate business growth in frontier markets."
"Africa has become a strategic focus for SBI Group recently and we are looking for innovative solutions to partner with and better serve our customers," said Nobuo Ando, SBI Remit's Managing Director. "With the growing interest in collaboration between Japan and African countries, we will be able to leverage BitPesa's market expertise and technological prowess to deliver effective currency solutions."