Kotani Pay $2 Million to Aid Africans in Crypto-Based Remittances

Nairobi-based startup Kotani Pay has raised $2 million in pre-seed funding. To help underserved African populations with cross-border remittances using cryptocurrencies. The company aims to make sending money across borders easier for millions of people in countries like Kenya, Ghana, Zambia, and South Africa.

In the dynamic landscape of financial technology, Nairobi-based startup Kotani Pay emerges as a beacon of innovation, fueled by a recent infusion of $2 million in pre-seed funding. With a mission to empower underserved African populations with accessible cross-border remittance solutions leveraging cryptocurrencies, Kotani Pay stands at the forefront of revolutionizing financial transactions across the continent.

This funding round, led by P1 Ventures and featuring investors like DCG/Luno and Flori Ventures, will enable Kotani Pay to expand its services to more African nations, including Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.

According to the World Bank, the Sub-Saharan region is expected to receive around $55 billion in remittances this year. In some African countries, remittances make up as much as 20% of the GDP.

However, traditional money transfer methods in Africa face a major challenge: high transfer fees. Sometimes as high as 20% of the transferred amount. These high costs are due to factors like an underdeveloped banking system, currency fluctuations, and the lack of bank accounts or official identifications for many families.

Kotani Pay proposes using blockchain technology, specifically stablecoins, to make international money transfers more affordable. To enable users to convert stablecoins into local currencies and make payments without the internet. Kotani has built a middleware that connects blockchains to local payment networks. This allows transactions via feature phones using a communication protocol called USSD.

• Kotani pay is the premier gateway connecting web3 users to local currencies across Africa.
• Providing Businesses with stablecoin/ Flat for your Liquidity needs.
• Connect Your DAPP Wallet or blockchain network to local payment channels in Africa.
• Kotani operates as a B2B solution, connecting crypto platforms’ smart contracts with mobile money APIs.
• Major crypto partners include Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar.
• Enjoy Full blockchain Functionality without the internet.

They Serve Some of the top businesses in the world, providing them with affordable last- mile payout services for their digital assets and blockchain- based opeations. They are an- ramp/ off-ramp service that connect web3 user to local flat across Africa.

Central to Kotani Pay’s disruptive approach is its utilization of blockchain technology, particularly stablecoins, to mitigate the exorbitant transfer fees plaguing traditional remittance methods in Africa. By leveraging stablecoins and a sophisticated middleware infrastructure, Kotani Pay enables users to convert digital assets into local currencies and execute transactions even in regions with limited internet access. This innovative approach not only enhances affordability but also promotes financial inclusion by circumventing barriers posed by underdeveloped banking systems and lack of official identifications.

While most of Kotani’s transfers are inbound payments, the platform focuses on enterprises, with an average transaction size of $150,000. They monetize through an interchange fee, approximately 1% of the gross transaction volumes.

In its quest for innovation and expansion, Kotani Pay recently made headlines with the acquisition of Nigerian startup Fuhlstack, signalling its commitment to diversifying its product portfolio. With upcoming launches like Reconset and Money Ledger, Kotani Pay aims to further enhance its value proposition and solidify its position as a frontrunner in the fintech landscape.

Kotani Pay is set to introduce new products like Reconset and Money Ledger after acquiring the Nigerian startup Fuhlstack. Regulatory compliance is a priority for Kotani, with founder Macharia noting that central banks in the countries they operate in already monitor these transactions. They work with local mobile money operators and regulated partners to ensure compliance.

As Africa embraces the digital revolution, Kotani Pay stands as a beacon of hope, poised to unlock the immense potential of blockchain technology and revolutionize financial transactions across the continent. With its innovative solutions, strategic partnerships, and unwavering commitment to financial inclusion, Kotani Pay is not just reshaping remittance services but also empowering millions to participate in the global economy like never before.

Kotani pay on-ramp/off service works in three ways:

• API-integrate with their API and access off-ramp service to local currencies across Africa.
• Stablecoin Settlement solution- Access USD through their over-the-Counter (OTC) service that provides dollar-pegged stablecoins.
• SMS wallets-Acess fully functional blockchain wallet through an SMS interface without need for internet.

Despite navigating a complex regulatory environment, Kotani Pay remains steadfast in its commitment to compliance and transparency. Founder Macharia underscores the company’s proactive engagement with central banks and regulatory authorities across the markets it operates in, ensuring adherence to evolving regulatory frameworks. Encouragingly, recent developments in countries like Botswana, Mauritius, and South Africa, where licenses to regulate digital asset fintechs have been introduced, bode well for Kotani Pay’s long-term prospects.