New tool from Pakistan lets overseas workers pay their bills with bitcoin in just 5 minutes
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Paul Bischoff11:18 AM on May 20, 2015
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Pakistan received US$17.6 billion in remittances in the last year, according to the country’s central bank. The majority of this money was remitted by the Pakistani diaspora – 7 to 8 million strong – consisting of students, blue collar workers, and industry professionals.
The most common reason for sending that money is simply to pay the bills, says Danyal Manzar, co-founder of Urdubit, Pakistan’s first bitcoin exchange. While overseas workers are away, they are still often expected to pay for utilities, phone bills, and internet for their homes and families. But because they receive paychecks in a currency other than their native rupees, they have to entrust a middle man – usually a friend or family member – to receive a wire transfer and pay the bills for them.
This process has many drawbacks. "It’s very difficult for people to pay the bills," says Manzar. "Usually they have to go to the merchant sitting at the local shop to pay their bills." Wire transfers also have limits, high fees, and require a high level of trust in the person receiving the money to spend it as it was intended. Western Union is the dominant player in Pakistan.
"The place that I live in, [the occupants of] three houses across my street are all living abroad," he says. "They have to keep paying bills while they’re gone." Manzar’s neighbors have no means of checking whether the people they remit money to are actually paying the bills, he explains.
Manzar and his team have developed an alternative solution: Paybill.io. Launched this week, the service uses Bitcoin to bypass the geographic limitations of fiat currencies and pay bills quickly, easily, and anonymously online.
An overseas worker, for example, can buy bitcoin from Urdubit or any other bitcoin exchange, then enter a few simple details into Paybill. Select the specific utility company or telco, the customer’s account number, and the amount to be paid. Click on "Pay Now," scan the QR code with a bitcoin wallet app, and the job is done. Paybill requires no registration or personal information other than a phone number to confirm the payment has gone through. The payment process takes less than five minutes.
Once the payment has been submitted on the customer’s side, the bitcoin is converted to rupees through Urdubit’s exchange and sent to a merchant partner. Manzar says Paybill has already signed up 10 merchants in Pakistan who forward the payment to the customer’s selected telco or utility company. Paybill charges a modest one percent commission on each transaction. Half of that commission goes to the merchant, and the other half is used to compensate for volatility in the price of bitcoin while the payment is processed. Paybill effectively operates at-cost for the time being.
It takes less than five minutes for the overseas customer to pay a bill, then a maximum of three hours for his or her payment to be approved. Merchants never have to deal with bitcoin, as they only see rupees come through on their side.
A global solution
While Urdubit is firmly rooted in Pakistan, Manzar says Paybill will expand quickly to other countries. It also operates in Malaysia, where it has another 10 merchants signed up. The payments there go through local exchange BitX to ensure customers are getting a fair deal with local bitcoin rates. The Philippines and Dubai – both large remittance markets – are next in the pipeline. Manzar says he’ll also be signing up more merchants from the USA, Canada, China, Southeast Asia, the European Union, the Middle East, and North Africa.
Bitcoin is often hailed as an ideal solution for underbanked, cash-based economies with low credit card penetration. But like most countries, Bitcoin awareness in Pakistan is still low. Urdubit only transacts about two bitcoins per day (1 BTC = US$232 as of press time). To put that into perspective, Bitcoin payments processor Bitpay one year ago said it was processing US$1 million worth of bitcoin daily. It’s not much, but that’s still a significant uptick from a meager one bitcoin per month when Urdubit launched in October last year.
Barring any unexpected obstacles like government policy changes, the trend should continue on an exponential upswing. Bill payments are just the beginning, according to Manzar. Pakistan is home to one of the biggest freelancing populations in the world – people who often do work for overseas clients. Paypal is not accepted in Pakistan, so freelancers are usually paid by check and wire transfer, which are costly and slow. Bitcoin is a quick and cheap alternative. Remittances paid to individuals is another sector ripe for bitcoin disruption, and it’s already happening in many countries like the Philippines and Indonesia.
Editing by Osman Husain, top image by Ds02006
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ABOUT PAUL
Paul Bischoff is an American multimedia journalist based in Beijing. He co-founded and authored the now-retired Beijing Tech Report, and has also worked at the Xinhua News Agency and a local ABC TV station in the US. He’s generally against writing about himself in the third person, but occasionally makes exceptions. You can follow him on Twitter @pabischoff.
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M Shakeeb Khan10:07 PM on May 26, 2015
great work
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GrabTaxi’s motorcycle service rides into its third city, offers free rides in Jakarta
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Daniel Tay8:07 AM on May 20, 2015
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GrabTaxi today launched its motorcycle taxi service GrabBike in Jakarta, with free rides on offer until the end of this month. Grabtaxi’s motorbike service first appeared in Ho Chi Minh and Hanoi in Vietnam last year, making Indonesia’s capital its third trial destination. It does seem appropriate, given Jakarta’s infamous traffic situation. Informal motorcycle taxis, known as “ojek” in Indonesia, can be found on every street corner.
The thought of entrusting your life to a motorcycle rider might scare the pants of some – ojeks are typically deemed unsafe – but GrabTaxi’s VP of marketing Cheryl Goh is clear that passenger safety is “of utmost importance” to the company. To demonstrate this, GrabTaxi promises to provide medical insurance for all GrabBike passengers and drivers, which is a first for the taxi hailing company. Riders will also be provided with helmets, face masks, hair nets and raincoats.
At the same time, the safety standards that apply to GrabTaxi – safety, reliability, and speed – will also cover its motorcycle hailing counterpart. “It is crucial to us that our users always feel secure and trust us when they engage our services,” Goh adds.
Upon booking confirmation, passengers can share their ride details in real-time with their loved ones via the Share My Ride function of the GrabTaxi app. All rides are trackable, and should anything untoward happen, Goh assures Tech in Asia that they “can quickly and easily track the motorcycle or taxi.”
For now, GrabBike will only pick up customers in Kuningan and Setiabudi, but drop-off destinations can be anywhere within Jakarta. Users can access free rides in the next two weeks simply by selecting GrabBike as the vehicle type in the GrabTaxi app.
GrabBike isn’t the first of its kind in Indonesia. Go-Jek, for example, has been around since 2011, but only early this year launched its Android and iOS apps. Prior to GrabBike’s entry, it was the only ojek startup in Indonesia with its own smartphone app. It has roughly 800 motorcycle riders, and also tracks passengers in real-time via its mobile apps.
“We do still face the challenge of changing the mindset of Indonesians to move away from street hailing and utilize the safer and easier method of e-hailing using GrabBike,” adds Goh. She is, however, confident that users will come once the benefits are realized.
ABOUT GRAB
LOCATION
Singapore
FOUNDED
January 2012
WEBSITE
grabtaxi.com
LATEST FUNDING
US$350.0M / Series E
Grab (formerly GrabTaxi or MyTeksi) is an automated location based smartphone booking and dispatch platform for the transportation industry in Southeast Asia.
View full profile in our Database.
Editing by Nadine Freischlad and Paul Bischoff
(And yes, we're serious about ethics and transparency. More information here.)
ABOUT DANIEL
Content strategist at Piktochart. I spend most of my time reading and writing about tech, entrepreneurship, marketing, and psychology. Always be loving, always be improving.
