Capitec crypto backlash

UNPOPULAR MOVE: CUSTOMERS URGED TO USE MORE EXPENSIVE PAY APP INSTEAD

- Ciaran Ryan

South Africa's crypto community reacted with dismay to Capitec's announcement last week that it would restrict customers from sending funds to crypto exchanges.

Capitec says the purpose is to protect clients from fraud, and urged customers to use Capitec Pay as an alternative for crypto transactions.

That doesn't sit well with many in the crypto community.

They point out that this will be considerably more expensive - as much as 1% of the transaction value - than the much cheaper electronic funds transfer (EFT).

That cost can go as high as 1.4% once the costs of integrating with a payment services provider is factored in, Farzam Ehsani, CEO of crypto exchange VALR, posted on X.

Ehsani said payments should be getting cheaper, not more expensive.

The dismay over the new restriction by Capitec stems from the fact that crypto companies have spent vast time and resources making sure they are licensed as crypto asset service providers (Casps).

Now a blanket restriction is being placed on the crypto community at a time when they believe restrictions should be easing rather than tightening.

Capitec's explanation

Here's the statement from Capitec: “Capitec is committed to protecting our clients from fraud, which is why we made the decision to block EFT [electronic funds transfer] and immediate (Real Time Clearing) payments to crypto exchanges on our app and business web interface.