Why Bitcoin can gain a foothold in the African mobile payment market?

There are signs that Bitcoin’s use in the mobile payments market will continue to grow in parts of Africa in the coming years, with data showing that mobile payment users are expected to reach 101.34 million in 2016.

According to EY’s 2015 Africa Attractiveness Report, capital investment in Africa grew 136% to $128 billion between 2013 and 2014, and foreign direct investment (FDI) created 188,400 new jobs, an increase of 68%.

Thabang Mashiloane, co-founder of South African company Chankura, said they found that ±13% of the $128 billion went to the remittance industry within Africa, and that the large number of unbanked Africans living abroad may be better served in the coming years, as the limitations of the lack of infrastructure for blockchain/bitcoin use cases are addressed. This will be at the expense of mobile payments, he said.

Mashiloane told Cointelegraph:

“I think the African continent will become one of the regions with the most widespread Bitcoin adoption.”

He also said:

“Mobile money is a thriving banking industry in Africa, but one of the most important elements is missing – access to global financial services. Bitcoin will enable all Africans, regardless of economic status or educational background, to participate in global financial markets. For example, providing a way to buy stocks on Wall Street. African farmers will be able to trade freely with anyone in the world without barriers, using Bitcoin and smart contracts for escrow services. This is something that mobile money or the traditional banking system cannot do.”

Bellaj Badr, a Moroccan blockchain expert, said that the use of Bitcoin will grow rapidly in South Africa and sub-Saharan African countries, where communities have been accelerating the adoption of digital currencies and many promising Bitcoin companies have been established, such as ICE3X, BitX, and BitPeasa.

“I am 100% convinced that the Bitcoin revolution is starting in Africa. Bitcoin will be as successful as mobile payments.”

Mashiloane believes that Bitcoin is disrupting mobile money in Africa and that for the next generation of financial enterprises, Bitcoin will become the backbone of Africa’s financial infrastructure.

Citing Kenya as an example, he said the reason traditional banks cannot compete in these countries is that their systems are too expensive to implement. He said:

“Mobile money systems are expected to be 70% less expensive to implement than banks. I think Bitcoin is doing the same thing as mobile money: it’s much cheaper to become a Bitcoin financial business than a mobile money business. As I mentioned before, this will require these Bitcoin financial businesses to partner with existing blockchain infrastructure companies to advance payments, remittances, lending, insurance, and other blockchain use cases that may be challenging the financial landscape.”