Blockchain technology is a compelling answer to security and fraud in SA
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, says accounting, payroll, and payment systems specialist, Sage.
Yet despite this, few merchants and banks have started to consider in any great 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, the research found.
Some 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, said 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, Pittaway said.
“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,” he said.
Banks, insurers and other global companies are abuzz with the opportunities blockchain could bring in terms of how the global economy works and how businesses record transactions.
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, Sage said.
“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,” said 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,” he said.
Read: A simple demonstration of how SA businesses can use blockchain technology
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