Via My Broadband by Wikus Steyn
Cryptocurrencies had a tremendous run over the past two years, with prices breaching R1 million per Bitcoin.
While cryptocurrency trading has reached all-time highs, using cryptocurrencies for payments has not enjoyed the same success.
Ecommerce platforms in South Africa that accept Bitcoin payments became rare after PayFast ended its support for Bitcoin in July 2019.
Before that, PayFast could process Bitcoin transactions by partnering with Bitcoin exchange Luno, which acted as an intermediary between a buyer’s Bitcoin wallet and PayFast.
Delays in Bitcoin payment processing, high transaction fees, and volatility in the cryptocurrency’s price forced PayFast to stop this initiative.
MyBroadband decided to revisit cryptocurrency payments and test whether we could buy basic items without using the traditional banking system.
To completely bypass using a bank — and not use rands — we mined our tokens. It means that our money did not touch the traditional financial system.
We found several South African online stores that accept cryptocurrencies, including:
- Zasttra, a drop shipping marketplace.
- Future Light, a store specializing in LED lights.
- Boerbier, a website selling beer brewing items.
- Bitrefill, which sells vouchers with crypto payment options.
We were looking for some hard-to-find phone components and decided to give Zasttra a try.
The process to complete the order was simple. We registered an account, put in the delivery address, and chose a payment method.
We picked Coinbase Commerce, as we wanted to pay with a cryptocurrency.
After selecting “Pay Now”, we got the option to either pay with a Coinbase account or select one of the available currencies.
After looking at transfer times and fees for some of the coins, we decided to use Dogecoin from a Binance account.
The estimated processing time was between five and ten minutes, with a fee equivalent to R5.
We withdrew the needed amount from the Binance account to the given address, and after a few seconds, the payment page reflected that the payment had been sent.
Ten minutes later, the page updated, showing that the payment was complete. The order showed as paid under our Zasttra account.
The next task was to see if we could buy a cup of coffee using cryptocurrency. We decided on a Vida e Caffè voucher on Bitrefill.
While choosing the product, we could get estimates on all the available currencies.
It was unnecessary to create an account, as Bitrefill only uses an email address to send you the voucher.
This time we paid with Litecoin. The process was similar to the Zasttra payment described above.
Once payment was completed, the voucher code was shown, and we received an email with the same information.
We visited our local Vida e Caffè, selected our favourite brew, and paid with the voucher.
Following this purchase, we automatically received a new voucher code from Bitrefill with our change.
This experiment showed that it was possible to buy everyday items without using the banking system.
It is, therefore, hardly surprising that cryptocurrencies’ ability to bypass the traditional financial system is of concern to governments, central banks, and revenue collection services.