Bitcoin is a Payment Option for South Africa’s PayFast
PayFast, a leading South African payment processor, started offering the digital currency bitcoin as a payment option, making it available to the firm’s 30,000 merchant customers. It becomes the first payment processor in South Africa, and one of the first anywhere, to offer the cryptocurrency as an option.
The subject of Africa and developing markets is a big one in bitcoin circles; the currency is viewed as a solution to the problems of high money-transfer fees, as well as an opportunity to offer banking services to the billions of so-called “unbanked.”
So far, though, it’s all mainly experimental. A Kenyan startup, BitPesa, began offering a remittance service earlier this year, and there are exchanges in Mexico, Argentina, China, and elsewhere trying to spread adoption of bitcoin.
The company is partnering with BitX, a South African digital-currency exchange, for the bitcoin integration, but PayFast founder and managing director Jonathan Smit acknowledged the move was largely exploratory. He noted that consumers and merchants know very little about bitcoin in the young market.
“We are not really seeing a demand for bitcoin from customers per se, but bitcoin is very much a hot topic on South African lips,” he said in a conversation on Wednesday. Like many other traditional companies that take on crypto currencies, Mr. Smit is essentially launching an experiment. “The position we are taking is not necessarily driven by a clear business case but we are always on the lookout for alternatives and we are always looking for ideas that could become something,” he said.
Traditional payments processors are viewing bitcoin – which could potentially usurp their business – warily. During the initial launch period, Bitcoin transactions on PayFast will come cheaper than traditional credit card, Instant EFT and voucher payment methods, but could rise after that period depending on consumer interest.
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