South Africa is seeing a shift in how its people manage and spend their money, and the days of solely relying on traditional bank accounts could soon be a relic of the past. Instead, we are seeing more individuals diversifying their funds across various alternative payment methods (APMs), including cryptocurrency. For the country’s merchants, embracing crypto payments is no longer just a nice-to-have, but a crucial requirement to future-proof their business and take advantage of a rapidly growing customer base.
Statista projects that South Africa’s local cryptocurrency market will reach US$615.5 million by 2025, with a user base of over 7 million people by 2026, which represents a significant, yet often untapped, market for retailers. This is set to change, with Ecentric and partners Money Badger providing the robust infrastructure and simplified solutions needed to empower merchants to seamlessly integrate crypto payments to tap into this dynamic consumer base.
MoneyBadger’s Bitcoin-to-rand solution leverages QR code technology to allow customers to pay in Bitcoin, while merchants receive the exact rand amount instantly. The platform launched in Pick n Pay in 2023 and now processes thousands of transactions every month.
Table of Contents
● Crypto: Not just an investment, but new tender
● Crypto regulation is coming of age in South Africa
● Trends shaping the future of payments
● Empowering merchants through Consumer Services and Money Badger
● Real-world crypto success in South Africa
● Making crypto payments simple with QR codes
● Not just transactions: A comprehensive solution for merchants
● Building customer loyalty through crypto wallets
● It’s time to adopt crypto payments
Crypto: Not just an investment, but new tender
While many have tended to see cryptocurrency as a form of investment to be held or traded due to the growth in value since its introduction, the original intention – particularly for Bitcoin – was to act as a peer-to-peer electronic cash system that was more secure and efficient than using physical money. We are beginning to see this become reality: today there are millions of people holding various cryptocurrencies in wallets, who increasingly see it as an alternative to traditional money or card-based payments, and want to be able to spend their crypto just as easily as any other payment method.
Crypto regulation is coming of age in South Africa
The South African regulatory environment around crypto assets has matured over the past few years, and has transitioned from being largely unregulated to being overseen by the Financial Sector Conduct Authority (FSCA), with a relatively well-defined body of regulation. While some uncertainties still persist, as seen in recent legal cases, it is clear that crypto usage is well on its way to becoming standard business practice.
Growing regulatory clarity will only provide a more trustworthy and stable environment for both merchants and consumers to engage with crypto, further driving its adoption locally.
Trends shaping the future of payments
Looking beyond individual adoption, there are several trends that are accelerating the integration of crypt into the broader economy, including:
● Diversified wealth: Modern consumers are no longer putting all their eggs in one basket, and there is a noticeable trend of people disbursing their funds across various wallets and APMs such as stored value cards, and moving away from sole reliance on traditional bank accounts. And, they want to be able to spend without having to convert their funds into cash, which takes time, and will cost them money. Eliminating these inefficiencies will further drive up the usage of crypto for everyday transactions.
● Bitcoin communities: Across South Africa (and elsewhere), we are seeing the emergence of grassroots Bitcoin communities, who trade locally in cryptocurrency and are striving to create their own circular economies. Ensuring that merchants in these areas are capable of accepting crypto payments not only allows them to be part of these communities, but to act as a link between these groups and the broader economy.
● Remittances: A growing number of expatriates are using stable coins to send money to their families back home, as it is proving to be quicker and cheaper than traditional banking or remittance services, providing people with greater choice and control over their money.
● More secure travel: Having your bank card cloned and used fraudulently after going on a holiday is an experience that many may likely be familiar with. While there is recourse, people have to deal with the inconvenience of cancelling cards, waiting for replacements, and often having to deal with a lengthy wait for a refund. Crypto is a fundamentally different mechanism: here users have to actively send the funds, rather than allowing another party to withdraw them. Your crypto remains secure unless your device is stolen and unlocked with your credentials, offering a peace of mind that traditional card payments lack.
Empowering merchants through Consumer Services and Money Badger
Recognising these developments, Ecentric proactively established a dedicated Consumer Services division, in order to enrich its catalogue of services offered to merchants, and as such, the partnership with Money Badger was seen as a natural and necessary progression for the company.
This collaboration serves a dual purpose: it fulfils the immediate need to enable APMs, and crucially, it sets Ecentric up to leverage future APMs as they emerge. Money Badger plays a pivotal role by taking away the inherent complexities of crypto, such as volatility, dynamic pricing, and managing different crypto wallets, from the merchant. For the retailer, a crypto transaction processed through this solution looks no different to a standard card transaction, helping simplify operations.
Leveraging Ecentric’s existing massive merchant footprint and its extensible QR code payment solution, Money Badger’s crypto payment solution can be seamlessly added and made available to all of Ecentric’s customers by default.
Real-world crypto success in South Africa
The benefits of crypto payments are best illustrated through success stories of implementation. One such example locally has been Pick n Pay, which has over 1 500 stores enabled, and has seen massive success with thousands of people making regular use of crypto payments at their stores. By embracing this payment method, retailers empower their customers to effortlessly purchase everyday necessities such as groceries, book travel tickets, buy prepaid electricity, and airtime, among a multitude of other services.
This shows that crypto payments are not just for infrequent high-value transactions but are becoming an integral part of daily consumer spending.
Making crypto payments simple with QR codes
Prior attempts to drive crypt adoption locally often failed due to the perception of it being a complex, high-end technology that was reserved for a few. The partnership between Ecentric and Money Badger alters this narrative by simplifying the process for both customers and retailers – particularly for the cashiers.
The consumer experience is remarkably straightforward: shoppers simply use their preferred crypto wallet to scan a QR code. On the backend, Money Badger seamlessly collects the crypto payment, swiftly liquidates it into South African Rands, and then settles the exact rand amount directly into the merchant’s bank account, acting as a crucial intermediary. Money Badger supports various wallets, including Luno, VALR, Binance and all Bitcoin Lightning wallets, either by scanning directly, or through a companion app.
For merchants, Ecentric has undertaken comprehensive, end-to-end development work, ensuring minimal integration effort for existing customers, often requiring only initial testing. For new customers, Ecentric has created advanced APIs that deliver a similar “plug-and-play” experience, ensuring that bringing crypto payments online is far from a “massive undertaking”. This ease of integration, combined with the removal of crypto complexity, makes adoption highly attractive.
Not just transactions: A comprehensive solution for merchants
While the processing of the payment itself is crucial, this represents only a fraction of the overall challenge – perhaps 10% – and the true complexity lies in integrating crypto payments with existing business systems. To address these challenges, Ecentric offers OmniHub, a comprehensive suite that comprises OmniSwitch, which efficiently switches non-traditional payments such as Value Added Services (VAS) and APMs; and OmniOffice, a powerful portal that offers merchants a consolidated view of reconciliation, and enables granular examination of individual transactions. Furthermore, it integrates business intelligence tools, allowing retailers to use their payment data to gain actionable insights that can drive business growth.
Building customer loyalty through crypto wallets
A compelling benefit of accepting crypto payments is the opportunity that it presents for merchants to build new customer relationships. Unlike traditional card payments, which are anonymous, customers who use crypto payments tend to behave more like members of a loyalty programme, largely due to the nature of crypto wallets.
Now, brands can send targeted messages to wallets, informing users about which stores accept crypto payments, special offers, or other relevant promotions, deepening loyalty and further promoting the adoption and usage of crypto. By gaining access to this specific, engaged audience, retailers can not only grow their customer base but also potentially drive customer loyalty, and increase spending by growing the average basket size.
It’s time to adopt crypto payments
It is clear that crypto payments is no longer a niche offering, but a growing mainstream phenomenon both globally and locally. While overall transaction volumes using crypto might seem a small fraction as compared to card-based payments, we are still at the early stages of a transformation that could change how and where we save and spend. Some countries, such as the UAE, are already seeing crypto becoming as dominant as card-based payments, and the potential exists for a similar evolution in other markets as well.
By partnering with Ecentric and Money Badger, South African merchants can gain a competitive edge by future-proofing their business against the growing consumer demand for accepting APMs. Retailers can tap into a market of millions of consumers, streamline business operations, and unlock valuable data-led insights. Moreover, they can potentially reduce banking and acquiring fees, and pass these savings on to consumers to stimulate spending and build further loyalty in the brand.
Embrace the future of payments today and open your doors to a world of new customers and opportunities. Get in touch with Ecentric to find out how we can help transform your payments ecosystem. Contact us today.
