Bitcoin remittance startup BitSpark, alongside four other fintech startups, won the Innotribe 2015 Singapore Semi-Finals held Thursday at the Red Dot Design Museum. The event was organized through a partnership with NextBank Asia and sponsored by international bank Wells Fargo and European startup accelerator Level39.
BitSpark will now progress to the finals, which will be held in October at Singapore Sibos, where it will have the opportunity to win $50,000 and as well as support from the international payment network SWIFT.
Other winners of the Singaporean competition were social consumer credit rating startup Trustingsocial, automated risk management platform provider Jewel Paymentech, online payment processor Codapay, and mobile payments solution provider goSwift. Each of the 15 startups that participated in the event had to pitch the company to a panel of judges, which was composed of financial technology experts and entrepreneurs from the Asia-Pacific region.
BitSpark will be competing against 20 other fintech startups in the finals. Besides the Asian competition winners, finalists from Innotribe competitions held in North America, Africa and Europe will also be competing. The North American showcase has yet to held, and so far only one other digital currency startup progressed to finals. Elliptic, a secure storage service for a variety of assets using the blockchain, won the European showcase in April.
Connecting offline remittances
BitSpark secured a spot in the finals with a new service they announced during the competition. BitSpark CEO George Harrap told Bitcoin Magazine the new service is a way for offline remittance agents to offer online remittances through the startup’s Bitcoin international technology.
“With Bitspark, traditionally offline small business remittance shops (who can service the unbanked) are brought online, and online remittance services (who cannot access the unbanked/unconnected) are now able to connect with unbanked customers,” said Harrap.
The new service aims to solve of one of Bitcoin remittances’ biggest hurdles: digital. The vast majority of senders and receivers are still offline, cash-loving and might not have the best access to the Internet.
Online is still tiny part of global remittances, around 10 to 15 percent, though that is changing. BitSpark will continue to follow the company’s philosophy of “bitcoin in the background,” or cash-in and cash-out, so consumers don’t need to bother handling the digital currency.
BitSpark already operates its online Bitcoin remittance service in a several parts of Asia, including mainland China, Indonesia, the Philippines and Hong Kong. The startup uses only Bitcoin as payment rails, and users send and receive fiat. It has previously explored ways to cater to offline remitters with pre-paid cards in the Philippines and a physical point-of-presence in Hong Kong.
Developing an agent network
BitSpark will try to entice remittance agents to join the startup’s service by offering a subscription-fee model instead of the commission model offered by Western Union, MoneyGram and others. Attracting agents and building a large agent network is crucial for the success of the service.
Instead of giving a cut of each transaction to BitSpark, agents within their network will pay a yet-to-be-defined monthly fee to be part of the service. According to Harrap, the pricing model will put much more cash in the pockets of agents compared to existing remittance companies.
The Bitcoin startup said it already has a number of operators signed up, but whether the different fee model will be compelling enough to incentivize the number of agents it needs to join is a big if. Established offline remittance services offer a trusted brand and large customer base, both of which are huge for getting volume and subsequent agent earnings. Though it varies from country to country, in many places agents make between 30 percent to 45 percent.
That percentage might seem small, but even with a large cut going to remittance companies such as Western Union, agents are likely making a good living from the large volume provided by such brands.
BitSpark did not elaborate in detail about the new service but said more information would be available closer its launch in July.