With Blockchain Africa coming up in two weeks, we thought we’d focus on SureRemit, an African (specifically Nigerian) blockchain startup which has recently broken the record for largest African ICO to date, by raising $7 million. The ICO was held between 8 December 2017 and 8 February 2018.
With estimated international remittances from diaspora migrants to their country of origin totalling $429 billion in 2016, this market has blockchain-based startups scrambling to build solutions that could take a piece of this pie.
One of the core advantages of blockchain technology is that it has the ability to support cash remittances whilst eliminating the requirement for corresponding banks in the settlement process. We’ve seen companies such as Ripple, creating products tailored specifically to this cash remittance market.
If implemented in Africa, these kinds of blockchain based solutions would be able to eliminate the “super-tax” that is often paid by diaspora African migrants when sending money to their families back home.
SureRemit has taken this opportunity to the next level, by providing a solution to the high cost of international remittances, but also by providing the payer with the ability to specify where and how this value should be spent. These “non-cash” remittances would allow users to send e-vouchers rather than cash, that could then be used to purchase specific goods and services from global merchants partnered with SureRemit.
“You no longer have to hope that the money sent is used for what it was intended, you can send e-vouchers for specific needs and view redemption details.”
For example, a family member in South Africa, could potentially send an e-voucher to his family in Nigeria via SureRemit; this could then be redeemed for a specific product specified by the sender, such as a utility bill or airtime. This could provide the payer with assurance that the ‘value’ he is transferring will be used for the intended purpose and won’t be mis-spent by the recipient.
The Remit token (RMT) will power the SureRemit network and is a utility token that is designed on the Stellar Network. The transferral of these tokens are essentially what SureRemit uses to transfer value between users. The tokens can be traded on any exchanges or stored in wallets that already host Stellar Lumens.
In a recent interview with SureRemit Director, Samuel Biyi,he explained that the funds raised in the ICO will be used to speed up operations by adding more merchants to its network. The more merchants that SureRemit partners with, the more non-cash products will be available for purchase through the SureRemit network. Although the concept of non-cash payments has been explored in the past, SureRemit is now applying this concept to the international remittance sector.
“We are looking to be the first coordinated effort into creating the product that is specific to that use case (non-cash remittance) not just you know becoming a hybrid of something else so we are aggregating local, physical merchants as well as utilities and channels [….] so I think we are the first major effort at running a global non-cash remittance platform.”
Through the platform, users will be able to specify the country and the merchant category of the product, and then send a voucher through to the intended recipient via SMS or email. The user will pay for this voucher using RMT tokens, these tokens will then be frozen, and as soon as the voucher is sent from the SureRemit system to the recipient, the token will be transferred to SureRemit.
One of the company’s biggest challenges will be to build a large enough network of affiliate merchants, through Rwanda, Nigeria and Kenya, which will allow users to redeem services using these e-vouchers purchased through SureRemit. The more of these merchants that exist, the stronger the product and network will become.
In future, SureRemit plans to integrate processes which will allow their merchant partners to accept RMT tokens directly (which can be exchanged for fiat) and thus enabling token transfers to happen at the merchant.
The news of this ICO will hopefully encourage other companies in the remittances space to look at the adoption of a blockchain based solution to power their remittances.
One thing is for sure, the traditional remittances market needs to adapt, because African consumers will most likely support a solution that eliminates the ‘super-tax’ they are currently paying, and SureRemit is in the process of launching a product, which will do just that.