Africa has a youthful, tech-savvy population and is often at the cutting edge in terms of implementing new technology. Mobile money is already a big deal here, eclipsing other large markets such as the USA in terms of usage and penetration. When it comes to cryptocurrency, the African continent could be where it really takes off and starts a true revolution in how people pay for goods and services.
Whilst the most recognised cryptocurrency, Bitcoin, has been around since 2009, the world has not yet adopted this alternative payment method wholesale. Indeed, the market has had its ups and downs. However, moving forward, it seems certain that we’ll see blockchain technology and cryptocurrency become a more integral part of modern life. It has already infiltrated some of the biggest industries on the planet, establishing itself as a popular online casino payment option as well as a trusted method with which to pay tuition fees and buy art pieces.
So, if Africa is where this big change picks up momentum, which industries will we see it effecting first?
Banking
As mentioned, Africans are already enthusiastic users of mobile money, with platforms such as M-Pesa dominating the market above and beyond traditional online banking or other payment methods like Google Wallet and Mastercard’s PayPass. M-Pesa is easy to use for both customer and retailer, accessible to a large number of people regardless of circumstances, and applicable to a greater variety of transactions.
Whilst digital banks such as Monzo, Starling and Revolut are starting to infiltrate markets in the USA and Europe, they are having to overcome the established banking system there. In Africa, this proves less of a hurdle. From digital banking and mobile money, it is not a huge leap to then start using cryptocurrency, as none of these methods require anything further than a registered account and mobile device.
If most transactions are already being carried out using mobile phones, then using cryptocurrency rather than other currencies will barely make a difference to the customer. In fact, they only stand to gain from this shift. By their very nature, cryptocurrencies like Bitcoin are more secure due to their transparency; they are also cheaper to use when transferring money as they cut out the middleman. This decentralized approach to money could fit in well to the existing structure in Africa, as it wouldn’t encounter the same stumbling blocks present in other markets.
Ride Sharing
Once upon a time, using the internet to summon an unknown driver to your location in order to ferry you from A to B would have been seen as a bizarre and downright dangerous concept.
However, with the creation of platforms like Uber and Lyft, it is now a commonplace service used by many people all over the world. On the African continent alone, there are over 50 separate lift sharing businesses in operation; this should come as no surprise when you consider that almost half of the population live in urban areas.
The enormous success of businesses like Lyft (which was, after all, inspired by Zimbabwe’s existing car sharing practice) only looks set to grow as more uses are found for the business model.
So, how does cryptocurrency come into all this? Well, businesses like Arcade City in the USA are putting the power back into the hands of both drivers and customers, rather than retaining it for themselves as a parent company. They utilise the same blockchain technology used by cryptocurrency to decentralise their business model, allowing drivers to set their own rates and customers to rest easy in the knowledge that each transaction is safe and transparent.
This approach also leaves space for professional drivers to develop their business from within Arcade City, including deliveries and roadside assistance amongst their services. This developing sector has the potential to work well in Africa, building on existing systems and remaining mindful of local culture.
Of course, there are many more sectors where the adoption of cryptocurrency and blockchain technology could make a big difference across the continent. These range from the retail industry, where relationships can be built directly between buyer and seller with no need for intermediaries such as Amazon, all the way to real estate, meaning reduced risk, costs and waiting times when buying or selling a house.
The possibilities are endless and the true capacity of this technology in Africa remains to be seen.
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