More South Africans making use of crypto to pay for goods – report

There has been an increase in a number of South Africans who make use of crypto to pay for goods and services.

The increase was revealed in a Luno report titled Bridging digital and fiat – crypto’s role in modern payments released in August. The report shows Pick n Pay records over R1 million in monthly sales paid in crypto from just R25 000 a year ago.

Christo de Wit, Luno’s country manager for South Africa, says they have noticed that cryptocurrency is being treated as more than just an investment.

R3 million worth of crypto payments

De Wit say there has been more than R3 million worth of crypto payments processed for goods and services since September 2023. The average purchase using crypto is R370 and the largest amount is R10 000.

A social media poll by Luno showed that 40% of the respondents said they have used crypto to make payments.

“This provides an indication of how crypto is being used by those potentially more familiar with crypto than the broader public.”

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Familiarity with crypto

De Wit believes the poll is a strong correlation between user familiarity with crypto and their willingness to make payments using crypto. “More than 60% of payments through Luno come from customers who have been with Luno for three years or more.”

Carel van Wyk, founder and CEO of MoneyBadger, says they have noticed that the use of crypto payments are growing but they are still on the fringes of the traditional financial system.

“If people have crypto, there’s a good chance they may want to spend it without having to exit the crypto ecosystem by selling their crypto and sending the money to a bank account.”

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No competition with traditional banks

Van Wyk does not see crypto payments apps competing with other traditional bank payment channels.

“Statista estimates that the global crypto payment market will triple by 2030 to $4.8 billion, from $1.6 billion in 2023. As crypto adoption continues to grow, so could the case for being able to use crypto to pay.”

Overcoming crypto payment hurdles

“The Bitcoin blockchain is currently too slow and costly to be viable as a global payments solution on its own, with the layer-1 blockchain able to process roughly seven transactions per second compared to Visa’s 24 000 and Mastercard’s 5 000.”  

Van Wyk adds that to address these latency issues, developers created the Lightning Network in 2018, a layer-2 network built on top of the Bitcoin blockchain. “Lightning transactions surged by an estimated 1 200% since 2021, underscoring the expanding adoption and scalability of the Lightning Network.”

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