Strike partners with Bitnob to facilitate cross-border payments to Africa

The lightning network has hit Ghana, Kenya and Nigeria. During a conference in Ghana, Strike CEO Jack Mallers announced that payment company Bitcoin (BTC) has partnered with mobile app Bitnob to facilitate payments to Africa.

Mallers made the announcement on stage at AfroBitcoin, a Bitcoin conference in Ghana’s capital Accra. He stood with Bernard Farah, the Nigerian CEO of Bitnob, after a brief presentation on how it works.

Money transfers to Africa take advantage of the Lightning Network, the layer-2 payment network built on top of Bitcoin. The feature is called “Send Globally” and it enables instant, affordable payments to Africa.

Diagram of the money transfer from Alice in Nigeria to Bob in the USA. Source: Facebook

The feature doesn’t require people to use Bitcoin themselves, Bitnob CEO Bernard Parah explained on stage. The no transaction fee feature is currently available to Africans in Nigeria, Ghana and Kenya. In comparison, transfer services such as Wise charge a small commission, while Western Union can charge upwards of 10% for money transfers.

Dollar payments are instantly converted to naira, cedi or shillings (currencies of Nigeria, Ghana and Kenya respectively) and deposited directly into the recipients’ banks, mobile money or Bitnob accounts.

Solving cross-border payments to Africa using Bitcoin will be a huge boost to local economies. In Nigeria alone, $17.2 billion in remittances were sent to the country in 2020. However, according to the World Bank, “for every $200 sent in 2020, it cost the sender $17.8 (8.9%).” That equates to about $1.5 billion lost in taxes, or roughly the GDP of Samoa.

If Nigeria were to eliminate transfer fees using Bitcoin payment rails, Nigerians across the country would benefit financially. In Kenya and Ghana, the situation is analogous. Thousands of Ghanaians and Kenyans live in the United States and regularly send money abroad. Crypto in Africa has increased in recent years, money transfer is one of the many reasons why.

Related: Subway Accepts Bitcoin, Letting Users Get a Sandwich on the Lightning Network

Mallers compared the overall experience to PayPal’s Venmo app because it’s an instant peer-to-peer payment. Venmo is a mobile app that allows instant and frictionless payments between customers in the US. Mallers said Lightning Network “has only achieved dollar to Naira, Naira to dollar.”

The advancement is currently only available to Americans sending money to those living in Ghana, Kenya and Nigeria English-speaking countries in Africa, though the rollout is set to continue across Africa.

This story is a work in progress and will be updated with new information.