Bitcoin remittance service Rebit rolls out zero transaction fees, KYC policy

Rebit, the remittance arm of Bitcoin umbrella company Satoshi Citadel Industries (SCI), has back-to-back announcements this week: it has brought its remittance fees to zero for some channels, and started implementing a Know-Your-Customer (KYC) policy.

Overseas Filipinos may now send money to their loved ones in the Philippines via Bitcoin for free. Rebit’s zero fees apply to over 25 payout options, including major and rural banks, as well as pick-up centers.

Prior to this program, the service charged fees of up to one percent of the transaction amount.

Rebit, however, says fees will still be charged for money transfers that utilize pawnshops, and select banks outside of Metro Manila.

Bitcoin has proven to provide real value as a medium for money transfer and payment because it’s cheap and quick. As it eliminates the numerous hops in the transfer of money globally, it’s able to offer a significant discount to traditional service providers like Western Union or banks, which charge between five and eight percent.

Remittances worth about $30 billion flow into the Philippines via banks and third-party cash pick-up services annually, according to Rebit. Recovering what’s spent on fees will provide Filipino families a financial boost.

See: Bitcoin remittances to the Philippines have gone up. Here’s why

KYC: a red-flag system

Apart from its free pricing, Rebit is also introducing a KYC feature. Customers who want to remit bigger amounts of PHP50,000 (US$1,124) and above will be required to provide necessary personal information, SCI head of product Luis Buenaventura II tells Tech in Asia.

The implementation of the KYC policy, along with zero fees, runs counter to the common perception that oversight increases transaction costs, and goes in line with Rebit’s core mission of keeping its service affordable.

This also means, however, that Rebit will absorb the discount it is offering. This move takes away a revenue stream for the SCI group, but it doesn’t seem to mind at this stage. It is using incentives to build its user base, create demand, and facilitate wider adoption of Bitcoin in the community. It also plans to offset the discounts via its Bitcoin trading business.

“There are some pundits that point to regulatory compliance as the main reason for high remittance fees, but we think that there’s still room for profit even at our current zero fees,” says Buenaventura.

He adds: “We’ll earn from trading. Every bitcoin remittance service is essentially still a brokerage firm.”