Mobile Money and Bitcoin, the unexpected relevance for Africa, by Margaux Pelen

Margaux Pelen represents the new generation of French graduates: concurrently to HEC Business School, she completed a Tech master at Telecom Paris, fulfilling her ‘geek’ fiber. Then, she cofounded a start-up, Home’n’go, and has been a fearless entrepreneur ever since. She shares with us some learnings from her experience of visiting Tech-Hubs and communities in Africa (previous episode here).

[MP] When I first played with the mobile wallet, it seemed unreal to send money away for free. Yet Pelle Brandgaard had worked in Anguilla for years along with the most advanced “crypto-nerds” and knew well how to leverage the power of digital currencies. His latest startup, Kipochi, is based in Nairobi, Kenya and uses Bitcoin’s potential to make this magic happen.

Forget about Silk Road. Think Kipochi

Mobile money (the provision of financial services through a mobile device) has an amazing potential for the unbanked. As assessed by the World Bank, 2.5bn people don’t have a classical bank account but 2.5bn have access to a mobile phone. The overlap between both creates an amazing opportunity for 2bn of classical bank leftouts. Those could use their phone instead to pay and be paid but also text money to their loved ones in surrounding areas… and even a bit further for free with this new combination mixing digital currencies.


M-pesa as a billing system is the tree hiding the forest.

M-pesa («M» for mobile, « pesa » for money in swahili) is the widely used mobile money system that was deployed by Safaricom (Vodafone’s subsidiary in Kenya) in 2005. It has now a massive impact on Kenyan economic life as it accounts for 32% GDP and is used by 60% of phone holders (source: Communications Commission of Kenya). This mobile money service is very simple to use : you can just text your local shop to pay for your food or your electricity company when needed. It’s both basic and very common as I discovered it in Nairobi.

Until now, a couple of companies in Europe had already developed a couple of similar services (a text for a bus fare or for your washing machine for example). None reached this level of usage penetration: M-pesa isn’t only about billing, it’s mainly about sending money home at a limited cost. This is why 25% of M-pesa suscribers use it every single day.

(Editors’ note: Orange Money operates overs 13 countries in Africa and reaches over 8 millions customers; Orange is laucnhing Orange Cash in France in 2014, a contactless mobile payment solution in partnership with Visa).

Before any tech solution existed, Kenyan workers would travel to hand the money over to their loved ones. MoneyGram and the like launched a couple of expensive alternatives until city workers turned to mobile money to text it back home (in rural areas for instance). To back this service, 90,000 M-pesa agents are therefore spread all around Kenya to turn SMS into real cash.

Now that we’ve set the stage, let’s discuss more about how Bitcoin could unleash its full potential by leveraging digital mobile money services like M-pesa.

Bitcoin unlocks low cost remittances. Internationally

M-pesa and Bitcoin are praised for different reasons in developing economies.

M-pesa is providing users with financial stability through their mobile device. Bitcoin is a peer to peer currency that let you send money anywhere (and let you stay anonymous) and keep it on a dedicated wallet.

Both are by essence one-to-one services, yet the issue with M-pesa is the geographical boundaries as you can’t for example transfer M-pesa from Afghanistan to Kenya (Editor’s note: Orange has opened in 2013 international mobile money transfer in Africa:

Bitcoin offers a great synergy here that Niarobi-based Kipochi capture, for it enables users to send money across the globe through Bitcoin and stock them in a mobile wallet similar to M-pesa.


When you take a step back, the potential is huge : the remittances sent from worldwide workers to Africa homes are as massive as $60b each year (source: World Bank —twice as much as India ).

The launch of Kipochi about a couple of months ago is a signal that Bitcoin’s perception is shifting. Bitcoins are now parts of mass market services and not only a geeky way to buy drugs as the secret marketplace Silk Road enabled (until the FBI closed it on October 3rd). As Kipochi founder Pelle Brandgaard mentionned to HEC Paris students last week:

‘if you want to launder money, don’t use Bitcoin, build a fake luxury hotel”.

Nairobi is leading the way and has become an incredible lab for digital currencies : no wonder conference Afrikoin will be organized there in a few weeks.

For more on the subject, please read Tapping African Mobile Crowd using Low Mobile Tech by margaux pelen

Credits: Orange, Bitcoin, Kipochi

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    future of TV - Leading by InnovatingNicolas is a senior VP at Orange Innovation Group. Serial innovator, he set-up creative BU with an international challenge, and a focus on new TV experiences. Forward thinker, he completed a thesis on “Rapid Innovation”, implemented successfully at Orange, and further developed at He tweets @nicobry

Nicolas Bry

Serial innovator, Nicolas has set up creative units for new business at Orange, Club-Internet, and SFR. Nicolas created crowd platform, Orange Studio for Intrapreneurs, and edits Open Innovation blog International speaker, entrepreneurs & startups coach, innovation teacher at Telecom ParisTech, HEC & CentraleSupélec, and freelance consultant (ECC). Follow him at @nicobry.




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