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South African consumers are eager users of new payments technologies, which means that bitcoin and the blockchain may soon be on the radar for some of the country’s early adopters.
However, few merchants and banks have yet started to consider in much depth how these technologies may affect their businesses.
Research from the Sage Payments Landscape Report shows that consumers in South Africa place a lot of importance on businesses adopting safe, progressive payment methods. Fast and secure payment methods such as PayPal and in-app payments are most likely to make a business appear modern and progressive to consumers, finds the research.
About 96% of South African consumers believe that it is important that a business offers multiple payment methods. For example, mobile payments solutions such as digital wallets are enjoying explosive growth as South Africans look for more secure, convenient and easy ways to pay, says Charles Pittaway, MD of Sage Pay, a division of Sage.
This raises the question of how bitcoin – the digital currency – and blockchain – the technology that enables bitcoin – could transform the payments landscape in South Africa. Adoption of bitcoin has been slow worldwide, partly because users regard it as complex and because it is not widely supported among financial institutions.
”The blockchain offers a fascinating glimpse into how money might be moved around in the future and how transactions might be made more secure, transparent and accountable,” says Pittaway.
Essentially, blockchain works as a global and public ledger without a central database that can be tampered with. It is a permanent record that cannot be corrupted, creating a trail of financial DNA. Information relating to trades is stored across a number of computers, which makes hacking theoretically impossible.
“Though it’s far from the mainstream, technologies such as blockchain could one day offer compelling answers to the issues of security and fraud we face,” says Pittaway.
“In a time of digital invention, business builders must use the smartest technologies to reinvent their payments processes. Those that use trusted, convenient and secure payment mechanisms will win in the digital economy.”