Bitcoin cryptocurrency use in South Africa is set to increase as e-commerce takes off, says a local operator.
The cryptocurrency has faced controversy for its association with cyber criminals and fluctuating values. However, according to local Bitcoin wallet and exchange service BitX, the currency provides an ideal platform for e-commerce transactions.
“As more people use and accept Bitcoin, it creates positive feedback loops for usage and trust, which helps grow the industry. At some point we believe it will hit a critical mass that will cause growth to become exponential,” said Werner van Rooyen, head of business development and growth at BitX.
Globally, Bitcoin is experiencing growing adoption with 236 175 transactions per day said BitX, which is based in Singapore with offices in Cape Town.
Van Rooyen conceded that Bitcoin has higher adoption rates in developed economies where it was associated with luxury purchases.
“Those markets already have excellent, established financial services – which Bitcoin certainly can complement – but we expect the biggest benefits will accrue to users in emerging markets, where Bitcoin can solve real pain points.”
Barriers to expansion of Bitcoin in SA include the difficulty in obtaining the currency – which is not supported by any government – and the lack of support from local merchants.
“As with any new technology, but especially for matters related to finance, it takes time for people to develop trust. In this case, trust in the cryptocurrency, and in companies that provide Bitcoin services,” said Charles Elliman, head of business development at PayU EMEA.
“Bitcoin is a natural progression of payments, especially online payments, due to its digital nature. Payment processors like PayU can help provide more avenues for merchants to allow their customers to pay with Bitcoins,” said Van Rooyen.
Bitcoins have traded from highs of $1 242 per coin to the currently quoted price of $420 and Elliman said that educating consumers was a key challenge.
“For South Africa to become a catalyst for adoption in the region, South African e-ommerce adoption needs to start uptrending closer to that of Asia and for companies like BitX and PayU to help educate people and make the overall customer experience better, all within the right regulatory frameworks.”