Bitcoin proponents have long promoted cryptocurrency as a remittance solution, but traditional payment networks control the market. Most people don't understand Bitcoin. Converting cryptocurrency back
Bitcoin proponents have long promoted cryptocurrency as a remittance solution, but traditional payment networks control the market. Most people don't understand Bitcoin. Converting cryptocurrency back to fiat currency at the receiving end creates a critical friction point. igot wants to change that math.
The company added new currency support this month and launched merchant services across nearly 40 countries with payouts in ten currencies. igot founder Rick Day targets emerging markets instead of chasing market share in developed countries. "We go to Kenya and India and the UAE and the Philippines," Day said. "A lot of those people don't have smart phones, but they will in the next couple years because smart phones are insanely cheap and are getting cheaper and cheaper."
Reaching these populations requires more than just moving money. igot is developing wallet software that runs on lower-end smartphones, betting that handset penetration in developing countries will increase rapidly. The company prioritized Kenya as its first major market. The country's M-Pesa platform dominates mobile money in the developing world. igot targeted M-Pesa for integration, but navigating the regulatory landscape proved complex. The company acquired TagPesa, a Kenyan startup that had already done the groundwork. Weeks after launch, the results exceeded expectations. "We were hoping to tap into the remittance market in Kenya where people from Australia would send money back home," Day said. "But on the other hand we are seeing a lot of local interest, people buying Bitcoin locally, in Kenya."
M-Pesa charges users 2 to 3 percent per transaction. Kenyans often use traditional banks instead to avoid those costs. igot supports both channels. Day sees advantages in each approach. "M-Pesa is a very, very advanced technology," he said. "We should make use of it."
igot operates a trading platform and merchant service as well. The company launched bill pay in Australia and New Zealand, a feature that lets customers use Bitcoin to settle credit card and utility bills. Customers deposit Bitcoin with igot, which then pays their bills in local currency. The feature moves volume. "We pay dozens or even hundreds of bills with Bitcoin everyday," Day said. igot is negotiating with major Australian bill collectors to accept Bitcoin directly, eventually allowing them to display Bitcoin logos on invoices. igot plans to expand bill pay to the UAE, Singapore, and Hong Kong before entering the US market.
The United States presents regulatory challenges. "You have to get a license... you have to get one for all 50 states, do paperwork for 50 states, put up a bond in 50 states," Day said. igot expects to launch in the US within six to eight weeks using a licensing partner to manage state requirements. US merchants can already use the platform, though consumers cannot yet buy or sell Bitcoin through igot's US interface.
UK expansion is underway. igot accepts UK customers and is finalizing banking partnerships that will allow direct account connections. Current UK users rely on SEPA transfers. Across Europe, igot is building the infrastructure for a broader expansion.
Regulators pose the biggest obstacle to remittance expansion, not technology itself. "The way Bitcoin solves this problem is on one end you buy bitcoin and on the other you sell bitcoin," Day said. "So you are still just buying and selling bitcoin. The backbone is still bitcoin and that's not regulated right now." igot built a service called global transfer that handles the complexity for average users. Senders purchase Bitcoin through igot and provide a recipient bank account. igot automatically converts and deposits the funds into the receiver's account, eliminating the need for recipients to understand cryptocurrency or manage wallets. This approach reaches users whether they have a smartphone or bank account, expanding the addressable market.
The UAE-to-India corridor forms the second largest remittance lane globally, with millions of workers sending money home each year. igot operates in both countries. Kenya, which grew 11 percent in the past year, represents an emerging corridor with significant potential. The Philippines is next on the roadmap, with Mexico targeted for 2016. Day acknowledged that expansion depends on overcoming infrastructure gaps in each market. "We cannot change that overnight," he said.
Trading remains igot's core business. "None of this makes sense, BillPay and everything else, unless we have trading going on," Day said. "Trading will continue to be the core service that we provide on igot." Without traders willing to buy and sell Bitcoin, none of the other services function. The company is working on additional services that haven't launched yet, though Day declined to discuss specifics.
Security is central to igot's operations. The company stores over 95 percent of its Bitcoin in cold storage distributed across multiple countries and continents, not held in a single location. Every transaction receives manual review before execution. igot prioritizes security over speed. "We managed to block more than $1.2 million worth of fraud in the last few months," Day said. The manual review process catches fraudulent transactions, unauthorized access attempts, and stolen funds.
Altcoins don't factor into igot's current strategy. Day wants to master Bitcoin before expanding the platform. "We would rather explore and master the bitcoin world first, before we get into altcoins," he said. "It is not on our radar for the rest of this year."
Day outlined igot's ambitions. "Watch out, we are coming," he said. "We are launching in Europe and we are super psyched about it."
