Paxful reports massive crypto gains in SA, Africa

Read time 3min 30sec
Ray Youssef, CEO of Paxful.
Ray Youssef, CEO of Paxful.

US-based crypto-currency marketplace Paxful has reported massive gains in SA and Africa at large since its entrance into the market.

Paxful is a next-generation peer-to-peer marketplace for buying and selling crypto-currencies. Its leadership team recently visited SA, Nigeria and Ghana for further insight into the rapidly expanding African consumer base.

According to Paxful, while much of the recent crypto-related news headlines have focused on the fluctuating Bitcoin price, the interest in Bitcoin in Africa has continued to grow at a rapid pace.

The company says its total number of transactions from African consumers has risen to roughly R948 million per month.

Africa now accounts for the highest number of new subscribers to the portal per month, says Paxful, adding the appetite for crypto-currency is widespread.

It notes that over the past year, transactions on the Paxful platform from SA increased by 25%, by 60% in Nigeria and by up to 100% in other parts of the continent. For Africa as a whole, Paxful has seen a 225% increase in users in the last 12 months.

In SA, Paxful competes against the likes of Naspers-backed Luno, which recently announced it now has two million customers (wallets) spanning 40 countries.

Experts predict the total global crypto-currency market value could reach $1 trillion by the end of 2018, which is why crypto-currencies are believed to be an attractive alternative investment option by many.

Other players in this growing market include BitFund, which launched in July, promising to disrupt the local market. Earlier this year, another South African-based exchange, Coindirect, expanded its offering to include an integrated trading exchange for over 40 altcoins.

AltcoinTrader is also another notable player in SA.

Paxful notes the demand for crypto-currency is characterised by a marked increase in the 18-30 age group. The average Bitcoin purchase is R871, while the average Paxful wallet transaction is currently under R435.

It notes that without the scale and type of traditional banking infrastructure available in the developed world, many parts of the continent are already au fait with mobile money payment systems. African millennials find crypto-currencies offer alternative convenient and cost-effective access to the global financial system, the firm says.

According to Paxful, Africans are using crypto-currency to satisfy both personal finance needs and entrepreneurial ventures; transferring goods, services and money domestically as well as globally.

For some, virtual currencies have the benefit of acting as a hedge against the constantly fluctuating local bourse, it notes, pointing out that virtual currencies also serve as an effective and more profitable alternative to their local currency.

Consumers tend to use virtual currencies to buy goods, and in return, merchants may double their profit as the price of Bitcoin tends to fluctuate, says Paxful. There is also an emerging generation of Africans buying crypto as investment vehicles into promising blockchain start-ups. A relatively small number of Africans trade digital currencies speculatively for profit, it says.

"The adoption of Bitcoin across the globe re-affirms our belief that crypto will take its place as a mainstream financial system," says Ray Youssef, CEO of Paxful.

"As has been the case with other disruptive financial tech innovations like mobile money, Africa is leading the peer-to-peer financial revolution. Our aim is to continue to partner with consumers to expand access to the global financial system."

"As a company, we've learned a lot from African consumers. For instance, we've improved our mobile capabilities to cater to the widespread use of smartphones on the continent. Our experience in Africa has strengthened our capability to serve consumers regardless of geographical location or origin," says Artur Schaback, COO at Paxful.

See also