Up to 30,000 online merchants in South Africa can now accept digital currency Bitcoin, through a partnership between local Bitcoin exchange BitX and payment gateway, Payfast.
The system is currently in beta testing mode, according to Payfast, but sellers can already start accepting Bitcoin payments from local and international buyers.
“What makes this different from most Bitcoin platforms/transactions, is that while buyers will make a Bitcoin payment, sellers will receive South African rand in their PayFast accounts (and then, bank accounts),” the group said.
The payment company noted that sellers are not required to own a Bitcoin wallet, or even understand how the digital currency works, as payments are converted to rands.
Over the past five years Bitcoin has matured from being a theoretical crypto-currency to a viable transaction mechanism – though not without its controversies and downfalls.
The currency is considered to be extremely volatile, and open to potential market manipulation through cyber attacks.
“If a seller listed a product on their website for 1 BTC (at an exchange rate of R6,900) and someone purchased that item at a later date, when the rate of exchange is lower (say R6,000), they would ultimately lose out on the transaction (or have some explaining to do to their accountant),” Payfast noted.
However, the company pointed to many advantages to using the system:
- It can be much cheaper to accept Bitcoin than other international payment methods;
- Transactions are not subject to reversals or costly chargebacks;
- Payments can be sent and received from almost anywhere in the world;
- It is fast (particularly compared to international bank transfers).
In October 2013, Stellenbosch-based BitX – a market platform that allows individuals to trade Bitcoin using South African Rands – was acquired by Switchless, a provider of enterprise Bitcoin solutions.
Currently, BitX lists 1 Bitcoin valued at R6,790.