Pick N Pay Sees Surge In Tech-Savvy Shoppers Paying With Bitcoin

A year after Pick n Pay pioneered Bitcoin payments at tills across South Africa, the retail giant is now generating R1 million in monthly sales from shoppers using cryptocurrency.

Customers are purchasing groceries, data, airtime, and even paying their municipal bills using Bitcoin. This marks a significant milestone in the integration of cryptocurrency into mainstream retail in South Africa.

The adoption of cryptocurrency payments has seen substantial growth, with four times more customers utilising Crypto QR codes each month at nearly 700 Pick n Pay stores. This adoption is particularly notable in the Western Cape, followed by Gauteng and KwaZulu-Natal. The majority of transactions involve amounts of R500 or less, although the transaction cap is set at R10,000.

Crypto payments are taking off, and Pick n Pay remains the first and only large retail store to accept cryptocurrency.

“We started from a low base of around R25 000 per month, and it has grown exponentially every month over the past year,” said Deven Moodley, Executive Head for Pick n Pay’s value-added services, financial services, and mobile division.

The payment method is also accepted at PnP Express and Pick n Pay Clothing.

To pay with cryptocurrency, customers need a Bitcoin Lightning, or Binance wallet, and the CryptoQR app from MoneyBadger, or they can scan the QR code directly through their VALR or Luno apps on Android or iOS mobile phones. Customers can pay with any cryptocurrencies supported by Luno, VALR or Binance.

“You simply tell the cashier you want to pay using a QR code, and scan your phone at the card machine and accept the South African rand’s conversion rate at the time of payment,” Moodley said. “For years, crypto was something only computer boffins knew about, but Pick n Pay has paved the way for our shoppers to be early adopters in using their digital currency as a method of everyday payment.”

“We have come a long way since the full rollout in February 2023,” said Carel van Wyk, Founder of MoneyBadger, which manages the interface between the retailer and the crypto platforms. “Working with local cryptocurrency companies to integrate the Pick n Pay QR into their apps required much negotiation and technical work, but it has paid off as we see significant volumes driven through them.”

Van Wyk said delegates at Adopting Bitcoin 2024 Cape Town had been extremely impressed by South Africa’s adoption of cryptocurrencies, and specifically Pick n Pay’s pioneering work in the tech field. “There has been a shift away from the use of crypto as a purely speculative asset towards what it was originally intended for – to be engaged with as a digital currency, increasing spending which has led to an increase in merchant demand.”

“Crypto payments, which continue to grow month-on-month, fit into our Ways2Pay strategy of giving more customers mechanisms to pay in our stores,” Moodley said. “This is part of Pick n Pay’s journey to a less-dependent-on-cash economy, and one that drives financial inclusion which is a priority for the company.”

Cryptocurrency Regulations in South Africa

South Africa has been proactive in developing a regulatory framework for cryptocurrencies to ensure consumer protection and to mitigate financial risks. The South African Reserve Bank (SARB) has played a pivotal role in this regard.

Here are some key points about the current regulatory landscape:

1. Regulatory Guidelines:
   • In 2021, the Intergovernmental Fintech Working Group (IFWG) released a position paper outlining the regulatory approach to cryptocurrencies. This includes guidelines on anti-money laundering (AML) and combating the financing of terrorism (CFT) measures that cryptocurrency service providers must adhere to.
   • Cryptocurrency exchanges and wallet providers must register with the Financial Intelligence Centre (FIC) and comply with the Financial Intelligence Centre Act (FICA), ensuring robust customer verification and reporting of suspicious transactions.
2. Taxation:
   • The South African Revenue Service (SARS) considers cryptocurrencies as assets of an intangible nature. Therefore, profits from cryptocurrency transactions are subject to capital gains tax.
   • Individuals and businesses involved in cryptocurrency transactions are required to declare their holdings and profits as part of their tax returns.
3. Consumer Protection:
   • To protect consumers, the regulatory framework emphasizes transparency from service providers regarding the risks associated with cryptocurrency investments.
   • The SARB has also issued warnings about the volatile nature of cryptocurrencies, advising consumers to be cautious.
4. Future Developments:
   • The SARB is exploring the feasibility of a central bank digital currency (CBDC), which could coexist with cryptocurrencies and provide a stable digital payment option.

Implications for Retailers and Consumers

The success of Pick n Pay’s integration of Bitcoin payments reflects a growing acceptance and trust in cryptocurrency transactions among South African consumers. It also highlights the need for retailers to adapt to evolving payment technologies to cater to diverse consumer preferences.

For consumers, the ability to use Bitcoin for everyday purchases provides greater flexibility and convenience, especially for those who are active in the cryptocurrency market. However, it also underscores the importance of staying informed about the regulatory requirements and potential risks involved in cryptocurrency transactions.

In conclusion, as Pick n Pay continues to expand its Bitcoin payment facilities, it sets a precedent for other retailers in South Africa and beyond. This trend, coupled with a supportive regulatory environment, indicates a promising future for cryptocurrency integration in mainstream commerce.