In what its backers are calling “potentially a world first for a major grocery retailer”, shoppers were for a “limited time” able to pay for their groceries using bitcoin at a Pick n Pay retail store in Cape Town.
In a statement posted on its website, Cape Town-based specialist software payments development house Electrum, said customers at Pick n Pay’s campus store at its head office were able to use the bitcoin cryptocurrency to purchase groceries and services.
“The checkout process is as simple as scanning a QR code using a bitcoin wallet app on the customer’s smartphone,” the statement said. See demonstration video from Electrum below.
The checkout process is as simple as scanning a QR code using a bitcoin wallet app on the customer’s smartphoneIt quoted the retailer’s information systems executive Jason Peisl as saying that although bitcoin and other cryptocurrencies are “still relatively new payment concepts”, Pick n Pay has been able to “effectively demonstrate how we are able to accept such alternative payments”.
Pick n Pay did not say when or even if it planned to expand the pilot to other stores. However, Pick n Pay deputy CEO Richard van Rensburg has subsequently told Business Day that the retailer doesn’t expect to begin accepting bitcoin in the near term. He said the trial has since ended.
“We are unlikely to roll out the solution until the payments industry and regulatory authorities have established a framework for managing the risks associated with cryptocurrencies,” Van Rensburg is quoted as having said. “We have proved to ourselves, though, that it is technically possible to roll out a solution very quickly.”
Electrum provided the cloud-based enterprise payments platform used for the transactions, while the bitcoin infrastructure for the project was provided by Luno, a bitcoin company active in Southeast Asia and Africa, and with an office in Cape Town.
According to Electrum’s website, major major retailers and financial institutions use the company’s technology to accept payments, process loyalty transactions and provide value-added services. Its customers include two out of Africa’s top three retailers.
By Duncan Mcleod for TechCentral
The way that cryptocurrencies have been implemented – with blockchain technology – is absolutely not a viable consumer product, says South African entrepreneur Hannes van Rensburg.
Van Rensburg, who sold his payments platform Fundamo to Visa for $110 million (R1.4 billion) in 2011, was speaking at StartupGrind Cape Town on Thursday evening, reports Ventureburn.
He said that cryptocurrrencies that use the blockchain won’t see the same kind of adoption as credit or debit cards because of the impracticality of settling payments on the blockchain.
“I think there are a lot of things that could happen in the back. I think there’s a lot of things that could happen around settlement of transactions and so forth, but it is a fallacy. I know people are going to shoot me, but I am just a straight shooter,” said Van Rensburg.
One of van Rensburg’s biggest sticking points is the way in which cryptocurrency transactions take place – also arguably one of their biggest selling points.
“If I do a transaction in Bitcoin it means that before it is actually concluded with the text in the distributed ledger, 50% plus one of the participants in this ecosystem have to acknowledge that they have written it into the ledger,” he said
“Now just consider if you were to run it as a global currency where, before you walk out of the shop having bought my packet of chips for a dollar, half the population has to acknowledge that I bought a packet of chips. It isn’t going to work in that environment.”
Van Rensburg said that he still believed that blockchain was an important technology – just not one that is consumer-driven.
Good for business but not for consumers
Van Rensburg’s viewpoint is not a unique one, with many financial experts around the world voicing their concern about the commercial applications of Bitcoin and other cryptocurrencies.
Regulatory uncertainty is a big hurdle, especially in the financial-services industry. Legal frameworks, globally, will have to change to adapt to the growing use of the new technology, said a former former US Reserve official speaking to the Wall Street Journal.
There are also issues of cybersecurity; despite backers of blockchains claiming that they are secure by design, the technology hasn’t been adopted widely enough yet for it to be seriously tested.