Neo bank Be Mobile Africa taps crypto payments in SA

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 05 Dec 2022

Digital-only bank Be Mobile Africa has introduced a crypto-currency payments gateway.

It allows businesses and merchants in South Africa and the rest of the continent to accept and make payments with Bitcoin and other crypto-currencies such as Ethereum, as well as stablecoins such as USDC and USDT.

The move comes as traditional banks in South Africa continue to shun crypto-currency accounts, citing the potential risks they pose.

Be Mobile Africa notes that with the new payment gateway, users will be able to automatically convert incoming crypto payments into ZAR, USD or EUR, or have the option to keep crypto with Be Mobile Africa providing full custody.

“International payments have always been a pain point for African SMEs. Sending or receiving money from customers outside of one’s country is expensive and often takes days,” says CEO Dr Cédric Jeannot.

“We are seeing an increase in the number of African SMEs transacting with clients outside of their own domestic market, including other African countries. This new payment gateway is a game-changer,” he adds.

While the South African Reserve Bank’s Prudential Authority recently urged the big banks to start working with crypto players, most still have not fully embraced the digital currencies.

In November 2019, FNB announced it was closing down crypto-related bank accounts, much to the anger of local digital currency players.

The bank notified the crypto-currency exchanges that it will close their accounts in 2020, citing the risks the digital currencies present. Thereafter, several banks followed suit in shutting crypto-related bank accounts.

Be Mobile Africa entered the South African market in September, and just as other digital-only banks, it is looking to disrupt the country’s banking sector using technology.

Digital banks, also known as neo banks, are the consequence of the modern digital age. The primary characteristic of a neo bank is that it lacks any physical address or branch and operates digitally.

According to the numbers available on Statista, neo banks will oversee transactions worth over $3 trillion in 2022. Last year, the collective transactional value was $2.4 trillion, it adds, with neo bank transactions growing by 32.6% in value on a year-on-year basis.

In a statement, Be Mobile Africa says the new crypto-currency payment gateway will offer SMEs fees up to 10 times cheaper than traditional banks and real-time transactions.

“It’s important to remember that for a multitude of reasons, Africa is one of the fastest-growing crypto markets in the world,” says Jeannot.

“Many African businesses don’t have access to the same tools that are available in the western market and are therefore leapfrogging to crypto when it comes to payments. This is especially true in countries where local currencies are losing value – using crypto to preserve wealth in unfavourable economic conditions.”

Neo banks are increasingly becoming attractive in South Africa, due to their approach of delivering innovative solutions at scale without the frictional processes of traditional retail banks.

Over the past three years, SA’s retail banking industry has been revolutionised by the rise of digital-only banks, with the launch of TymeBank, Discovery Bank and Bank Zero.

The key differentiator of these new branchless banks is that they ensure competitive rivalry in the local banking sector, through agile offerings and lower costs.

This has seen traditional banks accelerate their digital-first strategies and aggressively reposition their platform-based model, to offer customers innovative financial products and services.

TymeBank has amassed five million customers in its three years of existence, with over 100 000 small businesses.

Discovery Bank says it has seen strong growth since its public launch in 2020, garnering over one million bank accounts, held by over 470 000 clients. Bank Zero in October told ITWeb it had seen a rapid uptake in customer sign-ups, although its numbers were not disclosed.