More and more South Africans are paying for ordinary goods and services with cryptocurrency, new data from Luno has revealed.
This week, the SA-born crypto exchange reported more than R20m had been spent through its retail payments platform Luno Pay since the launch in November. The crypto app now processes about R2m in transactions monthly, “signalling adoption across diverse merchant categories”.
Crypto payments through Luno Pay are processed by partner companies, including MoneyBadger, Zapper, Stitch and FiveWest.
Through these partnerships Luno has been able to expand its crypto payments to include businesses across various sectors including Dis-Chem, GeeWiz, One Day Only, Spur, FlySafair, Hirsch’s, Dial-a-Bed, Loot and YuppieChef.
Pick n Pay remains the crypto exchange’s flagship merchant partner.
The company’s data also shows that more than 80% of Luno Pay users are repeat customers on a weekly basis. In addition, purchases range from as little as R1 at retailers such as Pick n Pay to high-value transactions of tens of thousands of rand.
The report is in line with findings from competing cryptocurrency platform Yellow Card, which specialises in stablecoin exchange, payments and remittances.
A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to another asset, such as real world fiat currency. The most common peg is the dollar, and examples include USD Coin and Tether. The other main peg for stablecoins is commodities such as gold or oil.
Yellow Card country manager Kamogelo Mosime recently told Business Day retail customers have been making crypto payments for everyday goods and services for a number of years. That said, the platform’s main speciality is sending and receiving funds across boarders faster and cheaper than traditional banks.
Yellow Card also gives its employees the option to be paid in stablecoin.
“Appetite for digital currency transactions in everyday commerce is growing,” said Luno country manager for SA Christo de Wit.
“The wide transaction spectrum indicates that cryptocurrency payments are becoming more common for both everyday purchases and significant expenses. Our data shows that many customers use Luno Pay regularly for routine purchases and services.”
Blockchain, the technology, which powers cryptocurrencies such as bitcoin, had until recently been regarded as fringe and associated with finance scams.
“South Africans are clearly ready to embrace crypto payments for everyday transactions — an indication that cryptocurrency is evolving from a speculative asset to a practical payment method integrated into daily life,” said De Wit.
This move towards what many would consider alternative forms of payment has been a long time in the making.
In 2021, payments giant Mastercard noted that SA’s consumer appetite for digital payments was taking off as the country started to recover from the Covid-19 pandemic. At the time, the US company said South Africans were considering emerging payments such as, biometrics, digital currencies and QR codes, in addition to contactless options.
“As interest in digital currencies continues to accelerate, 41% of South Africans say they plan to use cryptocurrency in the next year, with more than half (60%) noting they are more open to using it than they were a year ago. While consumer interest in cryptocurrency — especially floating digital currencies such as bitcoin — is high, work is still required to ensure consumer choice, protection, and their regulatory compliance,” said Mastercard.
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