Bitcoin Cash: fast, low-fee crypto payments for African businesses
Why African Merchants Should Start Accepting Bitcoin Cash Payments.
Digital asset payment gateways enable merchants to accept transactions of digital currency as payment from customers in exchange for services or goods. A Bitcoin Cash payment gateway allows persons, merchants, and enterprises to accept fast, low-cost cryptocurrency payments. Most systems will accept payments from any country securely.
Why Bitcoin Cash for Business?
Bitcoin Cash is able to process transactions more quickly than the Bitcoin network. This means that the wait times are shorter and transaction processing fees are also typically much lower. The Bitcoin Cash network is able to handle many more transactions per second than the Bitcoin network can.
Even though Bitcoin Cash (BCH) and Bitcoin (BTC) share the same supply, same mining algorithm and even a similar reward system, there are fundamental differences between the two. Bitcoin Cash nodes were once a part of the Bitcoin blockchain and Bitcoin Cash is a fork of Bitcoin.
Beyond these technical differences, both communities also have different objectives. Bitcoin Cash has the goal of becoming a peer-to-peer version of electronic cash that would enable micro transactions on the web and allow online payments to be sent directly from one party to another without going through a financial institution as highlighted in Satoshi Nakamoto’s Bitcoin whitepaper. The Bitcoin (BTC) community on the other hand, finds the store of value proposition more attractive.
Major differences between BCH and BTC
- BCH has cheaper transfer fees which means that making transactions in BCH will save you more money than using BTC.
- BCH has faster transfer times and that means you don’t have to wait long to verify a transaction.
- BCH can handle more transactions per second which means more ecosystem participants can have transactions processed at the same time compared to BTC.
Taking all this into consideration, it makes sense for merchants looking to accept crypto payments to favour BCH over BTC due to the fact that with BCH, they have a lot more flexibility in that they are able to receive fast Bitcoin Cash transactions into their wallets almost instantly.
The Benefits of Bitcoin Cash Merchant Adoption
More and more merchants in Africa are making fundamental changes to their business models and cryptocurrencies, especially Bitcoin Cash is at the core of that transformative shift.
Suppliers particularly in East Asia have started accepting crypto for speed and convenience instead of bank transfers which are cumbersome, especially for African merchants who typically don’t have corporate accounts with their local banks and who then run the risk of losing their funds each time they trust an intermediary or backdoor black market transaction facilitator to either acquire dollars to then wire to suppliers or execute the transactions on their behalf.
By using digital currencies, merchants are realising better profits and quicker turnarounds which is spurring adoption as local traders especially in crypto hotspots such as Nigeria, South Africa and Kenya are turning to using cryptos like BCH to get their goods which they source often from foreign suppliers to market faster. Informal traders who run flea markets or swap meets are particularly interested in this burgeoning trend as they are no longer inclined to purchase dollars using the South African Rand, Nigerian Naira or Kenyan Shilling for example. They also don’t have to shell out fees to money-transfer firms such as Western Union or MoneyGram.
Remittance Use Case
According to Chainalysis, retail-sized transfers (transfers under $10,000 USD) make up a larger share of Africa’s cryptocurrency activity than any other region, and the need for remittances is a big part of this. According to World Bank research, remittances below $200 between two Sub-Saharan African countries cost an average of 9% in fees, compared to the global average of 6.8%. For some country pairs that see large remittance flows, such as South African to Nigeria or South Africa to Malawi, the fees can be as high as 15%. This makes crypto such an attractive proposition because when using BCH for instance, those fees are lowered drastically.
Chinese merchants living and doing business in Africa are also reported to be some of the most prominent users of digital currencies in sub-Saharan Africa as they use it to send funds home.
E-commerce
With digital currencies there is no need to go to a bank, or to withdraw money or enter credit card information before submitting a payment at checkout. Enabling your business to receive fast, secure and low costs BCH payments is increasingly becoming more attractive to online entrepreneurs and in a continent with high unemployment and the fastest-growing internet penetration rates, there’s enormous potential for the next wave of young, educated Africans to adopt crypto and access global markets.
When customers make purchases using a digital currency like BCH as payment, the transaction often goes through the payment gateway at a fixed exchange rate and automatically converts to traditionally recognised fiat currency. This way, the merchant can avoid the volatility of the crypto markets.
What’s really attractive is the fact that crypto payment gateways typically offer lower fees than traditional credit card payment systems. A powerful value proposition for anyone considering doing business digitally. Some of these new tools are quite sophisticated and can be highly customizable and even provide native dashboards to help track payments.
Bitcoin Cash is now a commonly supported crypto by many payment gateways, which can also be integrated with e-commerce platforms, point-of-sale systems, shopping cart software, billing and accounting solutions.
How to Accept Bitcoin Cash Payments
There are a couple of ways a merchant can accept digital currency payments. One can accept payments into a personal wallet or via a third-party payment processor.
Merchants looking to receive crypto payments through their personal wallets will need to set up crypto wallets. Most wallets can be quickly downloaded to any phone or computer, or a merchant can get a hardware wallet.
Third-party payment processors, such as Coinbase or BitPay, GoUrl, Coinify, and Coingate are able to assist with the payment process, just as credit card payment processors do. One benefit of using a third-party payment processor instead of a personal wallet is that they can instantly convert the cryptocurrency into fiat, saving you from any price volatility.
Selecting a reliable wallet and provider can be a daunting process, so you can begin your search with more well-known wallets, such as Bitcoin.com Wallet, BTC.com Wallet, Blockchain BitPay, Electron Cash, CoinText or Coinomi. Keep in mind though that custodial wallets can never guarantee that your funds will be 100% safe from hacks or other attacks.
Payment service providers can connect their platform using a Bitcoin Cash payment API which will enable merchants to integrate and accept BCH payments on their websites. The payment API works by connecting a business’s checkout system to a payment acquiring network, allowing customers to make purchases without having to leave the website to process payments.
A business can also use this payment infrastructure to enable payments via a mobile app. This provides access to real-time purchasing data, allowing them to make more informed decisions.
To start accepting fast, low-cost digital currency payments on your website check out our article on the various payment gateways that support Bitcoin Cash here.
