This Kenyan crypto platform bagged $2M to transform the way cross-border remittances work in Africa
In many African countries, remittances play a crucial role, sometimes making up as much as 20% of the GDP. However, traditional money transfer methods suffer from prohibitively high fees, which can be as steep as 20% of the transferred amount. Aware of the challenges, Kotani Pay, a Kenya-based crypto payments
In many African countries, remittances play a crucial role, sometimes making up as much as 20% of the GDP. However, traditional money transfer methods suffer from prohibitively high fees, which can be as steep as 20% of the transferred amount.
Aware of the challenges, Kotani Pay, a Kenya-based crypto payments platform is on a mission to transform the way cross-border remittances work in Africa by harnessing the power of blockchain technology.
Its strategy involves the use of stablecoins linked to traditional fiat currencies, to streamline international money transfers. This approach not only substantially reduces transaction costs but also accelerates settlement times, offering users a more cost-effective and efficient solution.
To ensure accessibility, Kotani Pay developed an intermediary platform that bridges blockchains with local payment networks. This innovation allows users, including those residing in areas with limited internet access, to conduct transactions using feature phones, employing a communication protocol known as USSD.
Kotani Pay primarily offers its technology as a business-to-business (B2B) solution, linking cryptocurrency platforms' smart contracts and mobile money APIs. Some of its partner platforms include Yellow Card, DCG, Fonbank, Celo's Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar.
In addition to this, Kotani Pay provides a solution enabling users to convert local currencies into U.S. dollars. While this solution is currently geared towards businesses, it may eventually extend its reach to individual users.
Notably, Kotani boasts a total of $23 million in processed transactions (mostly incoming payments) thus far, with each business averaging a transaction size of $150,000.
Having recently secured $2 million in pre-seed funding, led by P1 Ventures and featuring participation from investors such as DCG/Luno and Flori Ventures, Kotani Pay has ambitious expansion plans. The startup intends to introduce its services to countries like Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.
