Pick n Pay, the third largest retail store in South Africa, has launched a payments system that allows customers to pay for goods directly with bitcoin (BTC) across all its stores. The system, launched in partnership with the crypto payments company CryptoConvert, processes payments using the Bitcoin Lightning Network and ensures that payments are settled immediately.
- CryptoConvert announced the integration via a tweet.
- To pay with bitcoin at Pick n Pay locations, customers must download CryptoConvert’s mobile application and link their Lightning wallets. They then have to use the app to scan the QR codes that the cashier generated for their payment.
- Lightning wallets allow users to send, receive and store bitcoin using the Lightning Network, a decentralized network within the Bitcoin blockchain that enables fast and low-cost payments among the network’s participants.
- In November, Pick n Pay started with a pilot of the system in 39 out of its almost 2000 stores in South Africa.
Why it matters
- Traditional payment systems issued by financial institutions (e.g., POS and credit/debit cards) are notorious for their high cost. That is partly because these payments involve several parties, who all take a cut from the transactions. These fees can collectively go as high as 3.5%, according to Business Insider South Africa.
- Bitcoin payments over the Lightning Network eliminate most of these middlemen since it works in a peer-to-peer manner. That should reduce transaction fees significantly.
- A video of one user using CryptoConvert’s system at a Pick n Pay store showed a transaction fee of 0.00000174 BTC on a purchase amount of 0.00072873 BTC. That’s roughly 0.24% in transaction cost — significantly lower than the 1% to 3% range obtainable for card payments.
By the numbers
- Mariblock reached out to the CryptoConvert team for early insights on the bitcoin payment integration.
- Carel van Wyk, ConvertCrypto’s head of special projects told, said:
“I can’t provide exact data, unfortunately, but I can say that our expectations have been exceeded. So far, we have seen transactions at over 100 stores after expanding the trial from 39 pilot stores to all stores this month.”
- Crypto payments are far from being mainstream, though. Bitcoin and other cryptocurrencies still need user experience improvements before they can scale as a means of exchange.
- “There still exist other problems, like price volatility, custody of funds and network capacity, but we are at a point now where bitcoin payments are a viable means for enthusiasts to purchase their weekly groceries,” van Wyk added.
- Pick n Pay’s decision to accept bitcoin payments come amidst an increasingly crypto-friendly posture from the South African government.
- The country encouraged financial institutions to serve crypto clients. It also officially recognized crypto businesses by adding them to the list of accountable institutions.