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Take a trip to South Africa with MoneyBadger and Blink.
Stop wondering why they’re #1 in BTC Map’s Countries Leaderboard and discover one of the few places where anyone can live on Bitcoin alone.
BREAKING: Through MoneyBadger, the latest Blink version - 2.4.8 - adds support for paying Zapper and Scan to Pay/Masterpass QRs in South Africa. Users can now shop for burgers, coffee, fuel, and online at thousands of stores directly through Blink.
To celebrate this monumental upgrade, Blink spoke to Ben Blaine, MoneyBadger’s Head of Growth. In the following interview, we cover the company’s history, South Africa’s affair with QR payments, and the many ways in which you can already live under the Bitcoin standard in the country.
“If you go into a shop, there is a very high probability that you can pay with Bitcoin there, thanks to these integrations,” Ben told us.
First things first, before diving into the deep end, Ben Blaine explains to Blink what MoneyBadger tries to accomplish. The company’s motivations:
“MoneyBadger's mission is to make it possible to pay anywhere in South Africa with Bitcoin, and to get Bitcoin to be a mainstream form of money. In my head, mainstream means we can start with 1% of money going through Bitcoin, but I would like to get to 10% of transactions going through Bitcoin. That's a lot of money. That's our main mission.”
However, not everything is orange in South Africa. For reasons we will get to in the “On Bitcoin Reserves And Exchanging To Rands” section, MoneyBadger has to liquidate the merchant’s Bitcoin:
“As a company, we think the fastest way to do that is to work with existing payment networks and retailers. So, you pay with Bitcoin, and we convert it to local currency, the rand. We pay the merchant or the payment service provider in rand.”
This liquidation is not ideal for Bitcoin from a network effects perspective, but it’s the situation at the moment. And, as we will see, the MoneyBadger off-ramp is evolving and improving faster and faster.
Sometimes you have to be at the right place at the right time. MoneyBadger started operations facing a huge challenge and an equal opportunity. Their job was to integrate Bitcoin’s Lightning network into Pick n Pay’s existing QR infrastructure.
“The first experiment or pilot site of this was with one of South Africa's largest retailers, Pick n Pay. They have around 1500 stores at the moment. They have very large wholesaler stores, massive warehouses selling goods, smaller stores, grocery stores, they have clothing stores, they have liquor stores, and they have convenience stores at gas or petrol stations. A very broad range. They already had a QR payment system in all stores, as QR payments are quite popular in South Africa.”
To integrate Bitcoin into the mentioned payment system, MoneyBadger created an app that now serves as a bridge between South Africa’s QR ecosystem and Bitcoin, but let’s not get ahead of ourselves.
This is what the first iteration of the MoneyBadger app was like, according to Ben:
“Our basic app was literally just a QR scanner with a bit of intelligence. So it was able to read the Pick n Pay code and say “oh, I've got a Pick n Pay QR code. Let me fetch the amount in rand, create a Lightning invoice, and open it in a Bitcoin Lightning wallet.” This converted the QR code into a Send Bitcoin transaction in the Blink wallet, or in any other Bitcoin Lightning wallet. It was a good proof of concept that worked very well. There were quite a lot of people using it. It was a bit clunky because you had to have two apps on your phone to make the payment, but it worked. If you want to spend Bitcoin, you can now spend Bitcoin at one of Africa's largest retailers.”
Again, not ideal, but a giant leap for mankind. MoneyBadger’s two-app setup worked, and proved people were interested in paying with Bitcoin.
“You would think it's only at a few stores, but actually, the majority of the stores have received a payment in Bitcoin. So, it's a very widespread adoption. Still smaller numbers compared to people paying with card or cash, as to be expected, but interestingly, we're seeing people showing up and spending Bitcoin all across the country.”
On the one hand, the widespread availability of QR payment options in South Africa enables MoneyBagder and Blink to hyperbitcoinize the country. On the other hand, it creates an environment that’s hard to navigate for the untrained eye. Luckily for us, we have Ben to guide us:
“There are three well established companies in South Africa that offer QR scanning apps and merchant acquiring services: Zapper, SnapScan, and Scan to Pay. And then, there are even more providers who will print the QR code on the bill, with their own QR code formats. There's a lot going on, but the net result is that there are lots of different QR code formats used at retailers and no common standard in place, however it’s a commonly available payment option.”
This chaos is fertile ground for Bitcoin to take over:
“It's a double-edged sword. There are many QR payment systems out there that we can leverage, but it's also confusing for customers. As a result, it makes a very complex environment. However, many merchants have a QR payment option, and now, thanks to MoneyBadger, it becomes interoperable for bitcoiners.”
But let’s get to the specifics, exactly how many merchants does MoneyBadger reach? The answer might surprise you:
“Zapper has 31,000 businesses that use these Zapper QR codes. One integration with Zapper, and now MoneyBadger works in all those businesses. And Blink’s new version will also be able to scan Zapper codes.
A few weeks ago, we integrated with Scan to Pay. They list 650,000+ merchant locations on their site.”
Nomenclature aside, both services account for extremely large numbers of Bitcoin-ready merchants. Through MoneyBadger and Blink, South African bitcoiners and tourists can spend their BTC in all those stores and businesses without breaking a sweat.
We took advantage of the fact that we were speaking to Ben Blaine to get a first-hand report of Blink’s status in South Africa:
“Blink is definitely an outlier among the Bitcoin Lightning wallets in South Africa. We've got these circular economies. They're mostly in popular coastal vacation areas of the Garden Route in South Africa. It's where all the people from the cities go on holiday when it comes to summer. The people who stay in these towns and don't go back to the cities want to get off the grid and build strong communities. They want self-supporting towns.”
The subject of circular economies came up, so we asked Ben about South Africa’s finest, the almighty Bitcoin Ekasi:
“One of the most famous projects is Bitcoin Ekasi, a surfing camp that decided at some point they were going to pay all of their staff in Bitcoin. Kasi is township slang that derives from the Afrikaans word “lokasie” (location/township) and is a lower-income area. Bitcoin Ekasi is working in the Kasi and giving people small amounts of Bitcoin to clean up their area or to brand their houses with Bitcoin logos.
They’re mostly using Blink because it’s easy to download, easy to use, and it's got the learning element to it. It's also both the point of sale and the spending tool.”
Ben also gave us a new reason why it’s a good idea for early Bitcoin users to start with a custodial wallet like Blink:
“Blink just hits that sweet spot. It's also custodial, so for a beginner, you've got that added benefit that if you lose your phone - phone theft is a problem in South Africa - it's easy to recover your account using your email address.”
Have you ever considered the issue of phone theft before? We wouldn’t recommend Blink or any other custodial wallet for storing significant funds. However, for everyday use, nothing beats Blink’s ease, simplicity, and reliability.
Bitcoin has somewhat of a bad rap in South Africa. Unfortunately many scams have been conducted with Bitcoin where people posing as brokers took money to buy Bitcoin on behalf of others and then disappeared with the funds. Bitcoin Ekasi and the other circular economy communities are fixing this from the ground up, and using MoneyBadger, Blink and Pick n Pay as a credible way to onboard to Bitcoin. Ben explains:
“That's the onboarding experience: download Blink, I'll send you some Sats, go to Pick n Pay. That way, you don't have to ask me questions like: Isn't Bitcoin a scam? Where can I spend Bitcoin? You've experienced it, you’re in control and we can skip hours and hours of debating whether or not Bitcoin is real money.”
And here’s another reason Blink is the ideal wallet for Bitcoin beginners:
“You always want that first experience to be as low friction as possible, because each step creates a drop off.”
Inevitably, the natural flow of the conversation led us to ask about Bitcoin’s legal status in South Africa: Do users have to pay capital gain taxes? Is Bitcoin considered money or an asset?
“Bitcoin is considered an asset. If you're paying with Bitcoin and the person receiving the Bitcoin gets rands, MoneyBadger is essentially selling their Bitcoin. You are disposing your assets. You are making a profit or a loss on that sale, and you need to report that to SARS.
On an annual basis, if you're under R40,000 - about $2,500 - you are exempt from capital gains tax. ”
Again, not ideal, but most countries are in that exact situation. It is one of the many obstacles Bitcoin has to overcome to become the world’s premium medium of exchange. In South Africa, Bitcoin functions as currency practically, but is considered a “financial asset” from a regulatory point of view. In other jurisdictions, the store of value case is still the most prevalent. That leads us to ask, do any of the merchants MoneyBadger works with keep the Bitcoin they get?
“We do have one, Butler's Pizza. They've got a great brand and a bunch of locations. They’ve been around for 20-plus years in Cape Town. Butler's Pizza decided to accept Bitcoin a year and a bit ago, and they keep the BTC. \”
Take note, South African merchants. This great opportunity is in front of you, ripe for the taking.
Our last question to MoneyBadger’s Ben Blaine couldn’t be more obvious. Can a simple bitcoiner live on BTC alone in South Africa already? Is the dream that advanced?
“You can pay for almost everything. You can definitely survive. The one thing that is a bit tricky at the moment is EFTs, aka Electronic Fund Transfer, what we call a bank-to-bank payment in South Africa. However, you can transfer to any South African bank account with a Lightning payment using Orange. And Orange also has an integration with an app called Swoop.”
In conclusion, South Africa is living in the future. MoneyBadger and Blink are helping to make the dream come true. There’s still a long road ahead and many things to improve, but the future looks bright for Bitcoin as everyday money.
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