By Trevor Goott – Director of Africa, Unlimint
Over time, people have constantly found new ways to pay and be paid – from barter systems to token money, coins, cheques, credit cards, and now, blockchain-powered cryptocurrencies. What we are currently experiencing in this decade is an evolution of payments that is occurring at breakneck speed. It is safe to say that it is due to the mission to create an even better transaction payment experience, to suit the ever-changing tastes in customers’ needs. This change is powering an exciting shift from brick-and-mortar financial systems and physical shops to technologically powered financial systems and e-commerce stores.
Blockchain technology has become more relevant in recent years, with more countries evaluating the potential that blockchain brings with it. It is starting to become a key discussion topic in the global economy, because it has the ability to revolutionise sectors such as banking, finance, health, insurance, telecommunications, entertainment, and e-commerce.
Globally, businesses that have adopted blockchain technology have recorded new levels of security for financial transactions. These transactions are also faster, more cost-effective, and provide an overall enhanced customer experience. Leading Global companies such as Microsoft, Ikea, Subway, and Expedia, are allowing customers to facilitate transactions using cryptocurrencies as a form of payment (source). It is expected that the number of companies accepting blockchain-powered payments will rise as more and more customers embrace cryptocurrencies as an alternative payment method.
For cross-border e-commerce, blockchain has helped to reduce the transactions charges and security risks associated with exchange rates, while allowing parties to make and receive payments in real-time. In short, blockchain is the natural next step in the evolving e-commerce sector, and its adoption will help drive economic growth. Businesses of today need to be open to this idea and understand how blockchain will help shape the future.
How adopting blockchain will impact e-commerce in Africa:
Key features of the blockchain include the ability to make transactions safer and faster, and these 2 features are factors of success when it comes to driving e-commerce growth. With this technology, businesses in Africa can share and securely store digital assets both automatically and manually and seamlessly handle customers activities such as payment processing, record keeping, invoicing, product searches, product purchases, and customer care – all of which are instrumental to improving customer satisfaction and promoting longevity when it comes to customer retention. This is particularly relevant in the African context since trust and security are major concerns when it comes to transactions on the continent.
These features above also lead to reduced transaction costs for e-commerce stores in Africa. The blockchain system also eliminates the need to go through traditional banking systems and the associated fees charged by these banking systems for processing payments are now saved
By adopting a blockchain-powered e-commerce platform, the opportunity for merchants to access a wider global consumer is significantly enhanced. It presents an opportunity for forward-thinking local brands to tap into new and emerging markets, and for global customers to easily access their products and services. Africa has 41 currencies, and the integration of cryptocurrencies removes two problems: currency liquidity and the high costs associated with multiple foreign exchange conversions. Merchants who accept cryptocurrencies will receive near-instant payments which in turn reduces their working capital needs, significantly reducing the time between the sale and the settlement. It also allows merchants to receive payment from a wider global audience, with minimal changes to their back-office systems and procedures.
While blockchain technology is still in the early stages of adoption when it comes to e-commerce, the upside potential for Africa is tremendous. The companies and merchants that embrace this technology will contribute to driving growth in the sector and transforming cross-border payments which were not possible before. It may take time to adapt and implement, but with a large, young, and ever-increasing tech-savvy population in Africa, this adoption will take place sooner than expected.
At Unlimint, we recognize the potential that blockchain has in improving and simplifying the world of global business. As a forward-thinking payment solutions company, we at Unlimint are constantly innovating to provide seamless solutions, and effectively bridge the gap between the financial world of tomorrow for businesses here and now.