Yellow Card’s Crypto Vouchers Show How Blockchain Can Help the Global Unbanked

Migrants often send the money they make back home to sustain their families, pay for education, or help support their parents. According to a PEW Global report, $138 billion was sent by migrants in the United States to other countries in one year.

Unfortunately, part of those hard-earned dollars are often eaten up by high transaction fees, as Chris Maurice found out while standing in line at his local bank.

“A guy from Nigeria was sending money to his family and the bank charged him $90 to send $200. That was a wake up call,” says Maurice.

At the time, the entrepreneur had been dabbling in cryptocurrency technology alongside his business partner, bitcoin enthusiast Justin Poiroux. They were working on a product that would allow consumers to purchase bitcoin at retailers.

“This system that we were building — that would essentially be a luxury product in the U.S. — could have a real impact on people around the world,” says Maurice.

“We went back to the drawing board to learn more about financial inclusion and exclusion and develop a system to better fit those bankless markets by providing access to cryptocurrency.”

Digital currency exchange Yellow Card alleviates those high processing fees with cryptocurrency, providing those receiving money with faster access to funds through a gift card or voucher.

Yellow Card partners with local merchants, vendors, and convenience stores to sell their Yellow Card vouchers. Once the customer purchases the voucher, they redeem it for cryptocurrency through a mobile platform. They can then send money to their family or buy whatever they may need online, allowing even bankless individuals to participate in e-commerce.

For example, once funds are transferred in bitcoin to an individual’s home country, the platform exchanges it into local fiat currency in the receiver’s community store or deposits into a bank account.

All the store needs to be able to sell the product is a mobile point of sale system that they can download on their phone. This allows the sender to use the rails of cryptocurrency without actually having to deal with the complexities of blockchain, and save fees in the process, says Maurice.

“The goal is to turn these local stores into pseudo-banks that people can use to access financial services that otherwise would be excluded,” he says.

While building the platform, the team wanted to make sure that the technology would run on anything from an iPhone X to a bare-bones Nokia phone to ensure full accessibility.

They decided to make Nigeria their first market and brought on board Nigeria-based Munachi Ogueke, now Yellow Card’s Chief Business Officer. In 2018, they sponsored a blockchain conference in Lagos to promote the product and solicit feedback.

“Going to Lagos and talking to people about what we were doing right, what we weren’t, and being able to adapt the system as perfectly as possible to meet the specific needs of the market was crucial,” says Maurice.

Yellow Card charges an exchange transaction fee when funds are being transferred from dollar to bitcoin or local currency back to the dollar. They’re currently available at over 25 stores in Nigeria with over 30 cryptocurrencies supported. The South Africa and U.S. markets are up next in 2019.

Maurice shares that despite bitcoin price fluctuations, he’s not concerned about the volatility of the cryptocurrency market. He’s paying more attention, he says, to its benefits for the global unbanked, as the volume of those transactions remain consistent across the network.

The team raised a small amount of funding during the startup’s early stages and will soon open a seed round of $1.2 million to scale marketing and their teams on the ground.