Bitcoin and other virtual currencies offer a range of unique benefits for people who regularly need to transfer money to someone in an emerging country, such as many states in Africa.
Cryptocurrencies are relatively secure, but in many countries they remain unregulated, so as with any payment method, there is an element of risk.
Although the African continent may not have been as quick to adopt cryptocurrency payments as Europe, Asia and North America, in recent years both individuals and businesses have built up a network of bitcoin initiatives.
For now, it is South Africa which has been at the forefront of a formal blockchain technology uptake, with trials taking place to test out the currency in a range of diverse financial transactions (article convert btc to zar).
What Are The Advantages Of Bitcoin-Based Money Transfers?
Any cash which is sent in bitcoin takes place discreetly. A crypto user can choose to share their transactions, but unless they do so it is not possible to link any purchases back to them and their identity remains protected.
All the best bitcoin wallets encourage a user to generate a new address for every new purchase, so the level of anonymity is only really matched by a cash purchase.
Mobile Payments Are Simple
Just like with PayPal and other online payment services, people who use a bitcoin wallet can make payments from any location which offers access to the internet. Therefore, it is not necessary to visit a bank, money transfer specialist or shop, in order to send funds.
The key difference between PayPal and bitcoin is that no personal information is required for each crypto transaction.
No Purchases Are Subject To Tax
As it is not possible for governments or law enforcement departments to detect or follow transactions made using bitcoin, any sales tax which might usually be applicable is not added on to a purchase.
There Is No Need For Third-Party Involvement
A crucial feature of bitcoin is that no bank, regulatory body or government is able to monitor, disrupt or intercept cryptocurrency accounts.
The benefit of a person to person system is that each user gets to make the transactions they need across international borders, free from conventional currency restrictions.
Attractively Low Fees And Charges
When people send money abroad using a wire transfer or they make purchases from a foreign source, this can often generate a range of exchange fees and charges. The difference with bitcoin is that there are no outside interests, so all of these costs are minimal.
This is especially advantageous for people sending funds abroad. Furthermore, as most bitcoin transfers take place at a rate of one block every ten minutes, the wait times are smaller.
How Do Bitcoin Payments Differ From Money Transfer Apps Like Worldremit And Azimo?
WorldRemit and Azimo are online services which enable their users to transfer money abroad (mobile money transfers). They present a very convenient method of payment but are lacking compared to the freedom offered by cryptocurrency transactions.
Primarily, with bitcoin, there is no one who can see what you are transferring or whom you are transferring it to. Unlike with WorldRemit and Azimo where your transaction history is visible to certain members of staff.
Moreover, WorldRemit and Azimo payments can be traced back to you in seconds, because you have opened an account with the service and verified your identity.
Aside from a greater degree of privacy, a bitcoin payment does not have to be converted from one currency to another, so there are no exchange fees. Moreover, any fees which are charged tend to be very low.
As with all traditional online wallets, payments made through WorldRemit and Azimo are completed with the services’ permission. If the company believes there is a problem, or their terms and conditions were not met, they can cancel transactions and even ban users.
With bitcoin, no permissions are required regardless of the transaction and your account can never be frozen as part of an investigation.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Jens Ischebeck is an Africa focused website publisher. The main sites are apps-for-money-transfer.com and bitcoin-guide-africa.com (both sites cover international money transfer apps for inward and outward remittances) and fast-bachelor-degree.com (accelerated bachelor degree by online studying).