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Takealot, PayFast join Bitcoin bandwagon

Tyson Ngubeni
By Tyson Ngubeni
Johannesburg, 24 Jul 2014
Bitcoin has so far been slow to take off in SA.
Bitcoin has so far been slow to take off in SA.

Local e-commerce and virtual companies are leveraging each other's expertise in an effort to kick-start the uptake of Bitcoin among local consumers.

PayFast - an online payment processing company - recently added Bitcoin to its payment platform, allowing buyers to pay with the virtual currency, with sellers receiving South African rands in return. The move is in partnership with local Bitcoin exchange BitX, while online retailer Takealot also announced it will use PayFast's platform to accept the currency.

Virtual currencies have so far been slow to take off in SA, owing to factors such as low trust and an unregulated climate, but BitX co-founder Marcus Swanepoel says the PayFast announcement aims to attract a lot more consumers. "Partnering with PayFast will enable people to spend it at more places," he says.

According to PayFast, more than 30 000 merchants will now be able to receive payments using the digital currency, in addition to credit cards, instant electronic transfers and certain voucher payment methods.

Swanepoel notes, although local Bitcoin uptake remains slow in comparison to developed markets, "we can see a definite change in the way South Africans understand and perceive crypto, which is good for the market and for innovation overall".

Speaking at the announcement of PayFast's acceptance this week, MD Jonathan Smit acknowledged the company is stepping into uncharted territory. "We are not really sure what will happen with Bitcoin going forward, as it is still early days for the 'currency', but we're interested in contributing to the ecosystem and seeing where it goes," he said.

Mixed results

SA has 31 companies which accept crypto currency payments, according to Coinmap - a Web site that tracks and maps businesses trading in such currencies.

Numerous start-ups across Africa have so far had mixed results in encouraging Bitcoin uptake, and still face an uphill battle amid an unregulated climate. Mobile marketing and technology company Mahala Mobile recently introduced Madibacoin, but had to reconsider the offering - withdrawing it temporarily - owing to imbalances that emerged in its system as a result of coin mining.

Neil Croft, owner of Mahala Mobile, said the company will instead focus on virtual currency exchange platforms.

Meanwhile, Kenyan start-up BitPesa aims to ensure its long-term survival by competing with established remittance payment providers. The platform encourages expatriates to send any amount of Bitcoins to recipients in the east African nation using BitPesa, which converts the crypto currency into Kenyan shillings.

Although progress is slow, Coinmap notes numerous companies are beginning to accept crypto currency payments, with a presence noted in Ghana, Madagascar, Morocco and Egypt.

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