Cross-Border Payments Is The One Real Use Case For Blockchain
During my discussions at the conference, I was amazed to find out that remittance fees can be as high as 20% of the overall transaction amount. So sending ZAR1,000 would actually cost up to ZAR200—a very high barrier to sending money. This (fee discussion) came to light during the pre-event workshop discussions around blockchain. Attendees at the workshop fell into one of three categories –
- BitCoin believers – Blockchain is overhyped and it’s the currency, which is amazing
- Blockchain hypsters – Not a misspelling of hipster, but rather someone who hypes up the technology without fully understanding it
- Pragmatists – People who understand the present-day limitations and use cases of blockchain technology
I place myself and probably 60% of the group into the third group. We agreed that cross-border payments is a very practical use case with real consumer and business benefits that can be achieved by early adopters. Banks could disrupt an existing market segment, solidify their footprint of lucrative remittance routes and increase their profits.
Retailers Must Become Connected Retailers
I learned a new phrase, “Connected Retailer.” Essentially it is in the spirit of an omnichannel retailer, but its offering is connected across multiple channels—the payment offering is the same across all channels and the consumer does not have to change their preferred payment method just because they interact with the retailer across a different channel.
With many Africans leapfrogging straight from in-person cash to digital payments, many retailers are struggling to keep up in their payment offerings for the new digital world.
Customer Centricity Is Not A Project
Rather, it is a culture. It shouldn’t be just a “flavor of the month” project that comes and goes with a taskforce or council. Banks and retailers are beginning to understand that consumers have the power and capabilities to move their business to an organization with a laser focus on customer experience. Witness the rise of Capitec – they started 16 years ago and are now the 3rd largest bank in South Africa.
Customer experience is not just window dressing, but a core element of a business. In the payments world, this means that old fashioned resiliency, availability and scalabilty are critical. The consumer might have a wonderful shopping experience, but if the payment system is down, their transaction cannot be completed, leading to high levels of dissatisfaction.
The audience at Seamless Payments was a good mix of retailers, banks, processors and FinTechs, who shared a collaborative perspective that I expect will see the region’s evolving payments industry continue to grow.