Interview With igot Founder Rick Day: Regulation Has ‘Absolutely’ Hindered Bitcoin In The US
You’ve heard it a million times. Remittance is Bitcoin’s killer app. But Bitcoin still isn’t there. The remittance market remains dominated by the old guard that has controlled it for decades.
Education is a major issue. While being entrenched in Bitcoin culture, it can be difficult to keep in mind that the vast majority of people still have no idea what it is. There is also the critical last mile of remittance, getting that bitcoin into the local currency of the receiver.
igot is hoping to change all that. They recently added more supported currencies to their system, putting them at the forefront of remittance in the bitcoin world. A lot of people see Kenya as an ideal country for remittance. The country leads the developing world in mobile money, making penetration into the Kenyan market as simple as integrating with Mpesa, something igot has done.
Elsewhere, they are working on partnerships with banks, even allowing users to receive money directly into their bank account without touching or even knowing what Bitcoin is.
The fact is, it will take a global company to do global remittance and that is what iGot seems determined to become. Getting in as many countries as possible under their umbrella as quickly as possible and providing them with useful services.
It isn’t all about Remittance. They also offer a comprehensive trading platform, merchant services and are working on making Bills payable with Bitcoin (only in Australia and New Zealand currently). Those things are interesting, the Bill Pay feature in particular has the potential to help transform how people work for and spend bitcoins, but it requires a lot of legal hoops and regulations and partnerships to really make it come to fruition in each country. Remittance on the blockchain can be done now and igot is actually doing it.
We spoke with igot founder Rick Day about what igot is doing now and what they hope to do in the future.
Mining Pool: So tell us about what igot just launched earlier this month?
We launched a Merchant feature, where businesses can start accepting Bitcoin in nearly 40 countries, cashing out in ten different currencies.
MP: Does that include the United States?
No, for US customers, we are still waiting on that. We are making progress, we should be able to launch that in the next six to eight weeks.
Technically, US customers can buy and sell bitcoin on igot, but it wouldn’t make sense, you would have to send an international wire transfer, pay a fee to your bank, pay a fee to our bank, so it doesn’t make sense for a US customer to use us, yet.
On the other hand, if you are a US merchant and you want to use igot, you are more than welcome to use igot.
MP: How about the UK?
We already accept UK customers. We’re finalizing our banking relationship in the UK right now.
People from UK [will] be able to connect their UK bank accounts to buy and sell from us soon. Right now, if you wish to send funds from UK, you will have to use SEPA.
MP: A big theme of the Press Release seemed to be remittance, with you guys adding Kenya with M-Pesa. How difficult was M-Pesa integration and how did igot pull it off?
It took us a few months, so it wasn’t easy. There were a number of regulatory licensing issues to take care of. But we really wanted to launch Kenya. So instead of going there and doing it ourselves we acquired a Kenyan company called TagPesa because they had done all the groundwork, so we thought we should look at acquiring them. As soon as that happened we were excited.
So far it has been a few weeks with the Kenyan launch and it is going surprisingly well. Including the local market. So we were hoping to tap into the Remittance market in Kenya where people from Australia would send money back home, but on the other hand we are seeing a lot of local interest, people buying Bitcoin locally, in Kenya. We were very surprised by that, it is going really well.
MP: Do you have any plans to support any Kenyan banks, or do you think M-Pesa is the way to go in the future?
Well, M-Pesa is a great, convenient tool to get your money out, because you can get your money on your mobile phone and go to an M-Pesa location and get cash. So it is most convenient, but it also isn’t cheap for you to receive M-Pesa money, it costs like 2 – 3%. So a lot of users still use the traditional banking in Kenya, because it saves them a lot of money.
So we see both [as useful]. To be honest, M-Pesa is a very, very advanced technology. We think it should stay [around] of course, and we should make use of it.
MP: Would you like to see more companies focus on making low resource Bitcoin wallets that can run on lower end smart phones as well as SMS wallets?
I think there are some startups working on it already. Including us, of course we are working on something for that. Not an SMS wallet, but we are working on a wallet for lower-end smart phones. We are trying to target emerging markets, so instead of going to the US and trying to get market share there, we go to Kenya and India and the UAE and the Philippines. A lot of those people don’t have smart phones, but they will in the next couple years of course, because smart phones are insanely cheap and are getting cheaper and cheaper.
MP: I also wanted to talk about BillPay, I pay all my bills with Bitcoin but I have to dump bitcoin and then pay in fiat, so I would be an ideal candidate for BillPay. But is it only Australia at the moment?
Right now, we are only testing it in Australia and New Zealand, but we do want to roll it out to other countries where we can offer it. So next up would be UAE, Singapore, Hong Kong, followed by the US when we are ready to launch there.
It is a convenient thing for users, if you have extra bitcoin and you have a credit card bill, you can pay us and we’ll pay your credit card bill. So if you make some money in Bitcoin, lets say you buy some for a hundred dollars and it goes up and you now have 300 dollars worth of Bitcoin, you may want to quickly spend that 200 dollars on your credit card or utility bills or even rent.
That service is only available in Australia and New Zealand right now, but we are seeing some great numbers so we are trying to roll it out to other countries.
MP: How has feedback been for it so far?
Feedback has been great, we pay dozens or even hundreds of bills with Bitcoin everyday, so feedback has been great. People love it, and its convenient. Instead of going to the bank, getting money then paying a bill you can just send us bitcoin and we will pay it for you. So, people like the convenience for sure.
We are also in talks with some big bill collectors in Australia, to start accepting Bitcoin directly from us. So in that case, you will start seeing bitcoin logos on your invoice [from them] as well.
MP: Kenya has been a focus for the Bitcoin community because it has M-Pesa [and has a technologically savvy population] What do you think has to happen to bring bitcoin remittance to other developing countries?
We already have UAE and India. UAE to India is the second biggest corridor for remittance, so we are sitting right in the middle of that and see a lot there. Kenyan is compelling, it’s an upcoming market, it has grown 11% in the past year. Next up would be [the Philippines], we are still working on partnerships there, once we do that, we will offer remittance in the Philippines as well.
So, outside of Africa, we would like to focus on India, on the Philippines and hopefully on Mexico, not right away, but hopefully next year.
MP:What has been the biggest challenge with getting remittance going, regulation or lack of technology and infrastructure or something else?
Remittance is a regulatory nightmare for most countries. The way Bitcoin solves this problem is on one end you buy bitcoin and on the other you sell bitcoin, so you are still just buying and selling bitcoin. The backbone is still bitcoin and that’s not regulated right now.
So of course with technology, the knowledge of people and access to smartphones and internet, that has to be worked on. We cannot change that overnight but we offer something called global transfer where, so long as the sender knows what to do, how to buy bitcoin and send it and give us a bank account on the other end, bitcoin is automatically sold on the other end. So, these receivers in these third world countries don’t need to know what Bitcoin is and we deliver the money into their bank account.
MP: It looks like you guys have a focus on day trading going forward, not as a singular focus, but more so than Coinbase or Circle or similar services. Do you think that will be a big service for igot in the future?
Absolutely, none of this makes sense, BillPay and everything else, unless we have trading going on. You can transfer all the bitcoin you want but if there isn’t anyone to buy it from you, it doesn’t really work. Trading will continue to be the core service that we provide on igot, and that will not change. In fact we will be adding new services that aren’t on the market yet soon.
MP: Can you talk about those at all?
No, unfortunately, we will have to wait until we launch.
MP: Has regulation in the United States Slowed you guys down at all?
Yeah, absolutely. In the United States you have to get a license and that’s great, we are happy to get one, but you have to get one for all 50 states, do paperwork for 50 states, put up a bond in 50 states, so it takes a lot of time and effort. So for that, we are partnering with a company to launch in the US and essentially use them as a business license under their banner. Once we get to the market in the next six or twelve months, in the meantime we will get our licenses and bonds and whatnot and that gives us some time to test the market as well.
MP: Can you talk to us a bit about security at igot, how you hold your bitcoin and things like that?
Absolutely, so we store over 95 % of our Bitcoin in cold storage, and our cold storage is not just in one location, it is distributed in different countries and continents. Without getting into too much detail, we take care of every single transaction manually. So we manually approve every transaction that comes in and out of the igot system. That is one of the reasons why we have such low fraud rates, we managed to block more than $1.2 million worth of fraud in the last few months. We do get a lot of people who want to steal bitcoin, we do get people who send us money from fraudulent bank accounts, or money that the have stolen from someone. So, we do watch out for fraud, we do keep our bitcoins safe and our customer’s bitcoins safe.
MP: Services that interact with the fiat world tend to ignore altcoins like Litecoin and others. I was wondering what you guys thought about that and about alts in general?
We thought about that, but to be honest, we are not ready for that yet. We would rather explore and master the bitcoin world first, before we get into altcoins. I understand some services are doing that, but it is not on our radar for the rest of this year, actually.
MP: Anything else you would like to say to our readers?
That’s pretty much it, just, watch out, we are coming. We are launching in Europe and we are super psyched about it.