Kotani Pay, based in Kenya, has secured $2 million in pre-seed funds. DCG/Luno and Flori Ventures also put money in. P1 Ventures of San Francisco was the round’s leading investor. Kotani Pay wants to go to Nigeria, Rwanda, Senegal, and the Ivory Coast.
Kotani Pay thinks that its solutions will make it easier for Africans to send money to other Africans. The company uses blockchain technology to let people in the diaspora send stablecoins to family and friends in Africa.
Stablecoins are digital currencies that are tied to real currencies like the USD. With this method, the number of transactions and the time it takes to settle them are both lower.
Kotani Pay links smart contracts on a blockchain platform to mobile money APIs for business-to-business use. The startup works with Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund, and Stellar.
The new company offers a way for businesses to change local coins into US dollars. This is for businesses, but people may be able to use it soon. Kotani Pay will make more products in addition to growing its market. Money ledger and reset.
Kotani Pay is another interesting feature that lets digital assets be moved from phones to mobile money apps. This is done using unstructured supplementary service data. The startup’s feature lets people do business in places where there is no internet.
Many African governments depend on money sent from other countries, which is often hard to do. Transfer costs are a big worry for payments from people living abroad. Kotani Pay helps solve the problem of people not having access to money by lowering transaction fees.
Even while fintechs and internet and mobile phone usage are rising, millions of Africans cannot access basic financial services. Trust, high costs, a lack of a close bank branch, and more are hurdles to financial inclusion.
Read also: TerraPay partners with M-PESA to facilitate cross-border remittances
Kotani Pay thinks that cryptocurrencies will be regulated.
Kotani Pay handled deals totaling $23 million. It’s interesting that the average deal size is $15,000. Crypto regulators often keep an eye on the site because it handles so many payments.
According to CEO Felix Macharia, the central banks of Kotani Pay’s countries closely watch how it works. We follow the rules by working directly with local mobile money companies or using the charter of regulated partners. Macharia said that the central banks are interested in some of these uses and are working on creating central bank digital currencies.
Some crypto companies have gotten bad reviews for breaking rules. Regulators have been looking at Binance and FTX. After the recent crackdown, investors are nervous about platforms.
But Macharia is hopeful about Africa’s regulations. Botswana, Mauritius, and South Africa have all started issuing virtual asset service provider licences to control digital asset fintechs. The EU parliament also passed MiCa, which controls stablecoin producers, on- and off-ramps, and exchanges.
More on Kotani pay
KotaniPay is a middleware solution that allows customers to access blockchain and cryptocurrencies via USSD. USSD is the main mobile interface for most developing countries.
Kotani Pay connects feature phones to blockchain networks using USSD. The solution doesn’t require internet access, phone storage, or learning curves.
Kotani Pay offers a straightforward interface for crypto off-ramps without public and private keys. No internet connection is needed for this interface. This makes it easy to use on low-end smartphones and feature phones. Dialing *384*483# brings up a menu that lets people convert crypto to money effortlessly. Blockchain wallet funds are transferred to a mobile money wallet.