One of the areas where Bitcoin could make a serious splash is in the world of mobile payments. Feature phone and smartphone sales numbers are on the rise year after year, especially in emerging markets such as South America and Africa. However, sending money over SMS remains a tricky challenge, and Bitcoin could be the perfect technology to overcome those barriers.

Mobile Payments : Booming Business

Coinffeine is one interesting Bitcoin company to keep an eye on during 2015 and years to come. This company has been exploring the potential of uniting Bitcoin with Airtime, a popular means of sending money in African countries. For example, paying for a coffee in Kenya is usually done with Airtime, as merchants there have recognized the advantages linked to accepting mobile payments.

Fun fact : Airtime is actually the transfer of mobile phone balance, which is then exchanged to local currency by the merchant. The most popular service using irtime as a way to send mobile payments is called M-Pesa.

As awesome as the idea of paying with mobile balance may sound, it’s not a vable solution for every country in the world. Especially when looking at Western countries, paying bills with mobile phone balance simply makes no sense at all. However, that doesn’t mean that this service has no use cases, as it could also be used to purchase digital goods.

In Spain for example, you can buy a wide variety of digital goods with mobile phone balance, such as applications, games and even Bitcoins. Even though this idea sounds simple to execute, the reality is far different unfortunately. Handling big amounts of digital currency is very risky, and with the pending regulations looming over all of our heads, it is not an opportune time to undertake such a venture at this time.

Not to mention that – in Spain at least – selling Bitcoin in exchange for mobile phone balance will most likely require operators to obtain a money transmitting license in the future. Needless to say that , assuming this would be the case, there is no incentive to run such a service any time soon, as the downsides and costs would far outweigh the benefits.

Coinffeine’s P2P Bitcoin Solution

The way Coinffeine works can be compared to the modus operandi of BitTorrent, combined with the financial aspect of Paypal. In simple terms, users would be able to send payments to other users automatically in exchange for bitcoins. As these bitcoins would be transferred from person to person – without any banks or intermediary parties being involved – a true peer-to-peer solution is born.

But there are other benefits to this idea as well. Perhaps the most important incentive is the reduction of operating costs by offering contracts between individuals, instead of using services provided by a service provider. Furthermore, such a service would not be in competition with banks and other financial institutions.

For the time being, Coinffeine users will be able to purchase bitcoins with their account balance allocated to their bank account or payment processor balance. However, down the line, this same service could be used to integrate with mobile payments in one way or another. Maybe Airtime will become a viable use case to buy bitcoins in the future.

Source : http://blog.coinffeine.com/2015/03/12/coinffeine-brings-bitcoin-to-mobile-operators/