Why South African retail is set to embrace cryptocurrencies like Bitcoin
Supermarket giant Pick ‘n Pay’s recent pilot project to allow customers to use the cryptocurrency Bitcoin to buy groceries a could help transform the payments landscape in South Africa.
Customers at Pick ‘n Pay’s head office campus in Cape Town used QR code scanned on customers’ smartphones where their virtual currency Bitcoin was stored and the supermarket retailer said the success of the pilot project demonstrates that when enough people have Bitcoin, it is ready to trade.
Richard van Rensburg, the deputy chief executive, told www.iol.co.za that his company has proved that, technology-wise, it can roll out the solution quickly.
“Accepting cryptocurrency holds the promise of being both frictionless and safe, and therefore has the potential to be a game-changer for the retail industry. Our pilot resulted in a transaction that was safe. There is no cash risk and no card fraud risk,” Van Rensburg says.
www.iol.co.za’s Khumalo writes: “The payments landscape is changing rapidly, and much of this change is being driven by digitally empowered consumers. In 2015, a plethora of mobile payment innovations were launched, including Apple Pay, Samsung Pay and the Android Pay app on Google Play. Other new payment technologies are QR codes, such as Snapscan, Masterpass and Zapper, near-field communication (NFC), such as Contactless, and digital wallets, such as Paypal. (NFC is a set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within four centimetres of each other.)”
The 2017 Sage Pay Payments Landscape Report, which looks at trends in the flow of cash between businesses and consumers, emerging payment methods and industry innovation in this country, provides some insights into how South Africans prefer to payment.
PayFast, a payments processing service for South African websites, says the online companies that accept Bitcoin payments include:
• Audico: sells audio-visual equipment;
• Cape Coffee Beans: sells coffee beans, grinders and coffee-makers;
• RunwaySale: sells designer brands and is South Africa’s largest members-only private online shopping club; and
• Takealot: one of the country’s largest e-commerce retailers.
PROS AND CONS
Digital currency news website CoinReport says the advantages and disadvantages of using Bitcoin for payments are:
• No or very low fees;
• Data is transparent but secure; Bitcoin protocol cannot be manipulated by any person, organisation or government;
• Payments can be made without your personal information being tied to the transaction; and
• You can send and receive money anywhere in the world at any time.
• The value of Bitcoin is volatile;
• Bitcoin is in the early stages of being developed as a widely accepted currency; and
• Many people do not understand digital currencies and are therefore reluctant to use them.
The Sage Pay report says 84 per cent of respondents regularly use debit cards, 80 per cent use cash, and 48 per cent use credit cards. Just over one-third of those surveyed regularly use electronic funds transfer. Only 10 per cent regularly use mobile payments such as Apple Pay and only 3 per cent use NFC.
Forty-nine per cent of consumers agreed with the statement that South African businesses are lagging behind other countries when it comes to introducing new payment methods.
Charles Pittaway, the managing director of Sage Pay, a division of Sage, toldwww.iol.co.za technologies such as Blockchain could provide solutions to the problems of security and fraud. “In a time of digital invention, business builders must use the smartest technologies to reinvent their payments processes. Those that use trusted, convenient and secure payment mechanisms will win in the digital economy,” he says.
Shireen Ramjoo, founder of Liquid Crypto-Money, says Bitcoin has provided a new way for business to be conducted that results in companies widening their profit margins and bringing fast, effective, value-driven solutions to consumers.