Last updated on January 23rd, 2015 at 02:31 am
Hong Kong is home to a significant number of migrant workers from Indonesia. One company, Bitspark, has decided to target this sector with a fresh Bitcoin remittance solution. Bitspark previously launched an almost identical remittance service in Philippines. The same model will be used by the company in Hong Kong.
Currently, 165,000 Indonesian migrant workers reside in Hong Kong. Bitspark intends to provide a low-cost method of sending money to Indonesia for this group. According to the official statistics from the Census & Statistics Department, ninety percent of Indonesian workers in Hong Kong are employed as domestic workers.
The remittance service works by a user entering a popular migrant worker hangout (also known as a “worldwide house”) and handing over their hard-earned Hong Kong dollars. Bitspark then coordinates with its respective Indonesian partner, Artabit, which enables the Indonesian recipient to collect currency within 24 hours from either a bank branch or local post office. Thus, Bitspark permits users of the service to deposit and withdraw cash without dealing with the intricacies of setting up bitcoin wallets. This leaves Bitspark and Artabit to transact in Bitcoin. Although Bitspark works with Artabit in Indonesia; Bitcoin exchange Rebit is the preferred partner within the Philippines.
Bitspark co-founder George Harrap stated, “We can now do same-day transfers in Indonesian rupiah to the other end.”
Bitspark migrated to a flat-fee pricing structure for remittances in contrast of the 1% charge for Philippines transfers (introduced last month). For example, Bitspark users in Hong Kong that transfer funds to Indonesia will pay HK$25 (roughly USD 3.22) whilst those customers that conduct Philippines transfers will pay HK$15 (USD 1.93). Therefore, within a short space of time, Bitspark has broadened its remittance scope as well as diversifying its customer base.
According to World Bank figures, Indonesia-bound remittances from Singapore can cost on average around 5% of the total amount being transferred, sometimes rising to as much as 10% when made solely with fiat currency. It is worth noting that the World Bank does not monitor cost of transferrals being sent from Hong Kong, however the Singapore-Indonesia remittance corridor does remain a worthy comparison.
Bitspark co-founder Harrap added that his company is now transferring more capital for companies than individuals. Hong Kong foreign labour employment agencies remit monies to respective home countries regularly in order to meet expenses related to overheads.
Harrap added, “Employment agencies will often have an office in the Philippines where they source many of the migrant candidates. These companies have bills to pay in the Philippines.”
However when covering recent Bitcoin volatility, Harrap declined to state Bitspark methods for insulating company funds from Bitcoin market movement(s). Harrap did say that the recent Bitcoin downward price movement hadn’t triggered losses for Bitspark and explained that he didn’t necessarily exchange remitted funds for Bitcoin immediately, but that he had an alternative and improved method.
According to Harrap, Bitspark presently completes 10-20 daily transfers with volume doubling on a weekly basis. Corporate clients are driving-up higher volumes with remittances typically carried out fortnightly, rather than monthly remittances from individuals.
Bitspark is successfully attempting to exploit the potential of Bitcoin as a method for cross-border transfers, rather than Bitcoin as a speculative financial product.