Christian Duffus realized that the extra airtime on his Kenyan SIM card couldn’t be used in the United States or redeemed online. So, in collaboration with Visa
V
Inc., he devised a global solution for converting airtime to cryptocurrency and essentially turning the SIM card into a debit card.
A man inserts a “hacked” SIM card into an iPhone at a small shop in a computer market in central … [+]
Corbis via Getty Images
He created an app called Fonbnk. The app allows its users to convert airtime to an ERC-20 (Fungible token run on Ethereum blockchain) stable coin called MIN. This token is pegged on the US dollar.
This innovation was based on observation of existing infrastructure that could be integrated into a product. On one side, the founder of Fonbnk realized that most telecommunication companies that offer prepaid airtime have some form of functionality that allows users to send and receive airtime for free. As a result of this functionality, most of these markets have developed a floating market for reselling airtime.
When a Fonbnk user sells their airtime to Fonbnk in exchange for MIN tokens, Fonbnk resells the airtime in the reseller market, increasing the liquidity of airtime.
According to a recent interview by Terry Angelos, Visa Inc. Global head of Fintech and Crypto, Fonbnk estimates that there are over 800 million prepaid airtime users. These users may sometimes travel to a different jurisdiction and realize they cannot use or redeem their airtime for cash or other asset. Fonbnk estimates that about $200-300 billion worth of airtime is lost each year as people are often unable to use or redeem their airtime for cash or crypto. The app solves this by offering a ready solution to convert excess or unusable airtime to MIN stable coin on Ethereum network.
Duffus, on the other hand, arranged a collaboration with Visa Inc. that allows Fonbnk to offer an online debit card based on the MIN token balance that a user has accumulated in their wallet. This means that a Fonbnk user has essentially converted their SIM card into a credit card, which they load with airtime.
Fonbnk users can now use their online credit card to send money and buy products from any website that accepts Visa payments. They can also save and grow their MIN token balances, as well as exchange MIN for other cryptocurrencies like Bitcoin and Ethereum.
The MIN token cannot be purchased independently. In is only available in-app to streamline the process of converting one’s airtime into crypto that can then be used elsewhere.
In another perspective, Fonbnk is an on-ramp platform that allows the unbanked population that has access to a smartphone to buy crypto through mobile airtime. The users only need a phone number and access to an internet connected smartphone to gain access to the crypto market.
The people in the emerging markets are often unable to access the global digital economy because of inability to access legacy banking services and the rigidity of legacy payment processing providers. Fonbnk is bringing access and inclusivity to these markets as its users can easily shop anywhere anytime.
Fonbnk is running operations in Kenya, Nigeria, South Africa, Ethiopia, Uganda, Ghana, Tanzania, Mozambique, India, Philippines, Ukraine, and Jamaica. In addition to serving as an on-ramp solution, it also features an income solution that allows users to earn profits from acting as market makers on the airtime market, according to a recent article by Kenyan tech blog Tech-ish.
