Categories: Bitcoin Business

PayFast ditches bitcoin, blames ‘design flaws’ in cryptocurrency

Click here to view original web page at techcentral.co.za

South African online payments provider PayFast is ditching bitcoin as a payment method, saying the cryptocurrency has several “limitations and design flaws that make it an impractical substitute for cash”.

PayFast was the first — and only — payment gateway to make bitcoin available as a payment method in South Africa. It has blamed high transaction fees and long confirmation times for buyers as some of the reasons for removing bitcoin from the platform.

“We have tried various ways to mitigate these problems, but unfortunately these issues are fundamental,” it said. “The resultant poor user experience has led us to re-evaluate bitcoin as a payment method on our platform and a decision has been taken to discontinue support for bitcoin from midnight on 20 July 2019.”

It said bitcoin had held promise as a global currency that would allow for a faster, cheaper and easier way to move money on the Internet. This included the movement of funds for day-to-day transactions, such as buying a cup of coffee. “Our aim was to enable that promise for our buyers and merchants, and to support this alternative to traditional payment methods,” it said.

“PayFast was able to process bitcoin transactions by partnering with local bitcoin exchange Luno, which acted as an intermediary between a buyer’s bitcoin wallet and PayFast. A buyer always paid the bitcoin amount while a seller received the equivalent rand payment in their PayFast account,” the company explained. “To eliminate any risk posed by bitcoin’s price volatility, Luno locked the bitcoin to rand exchange rate for a 10-minute window. If the transaction was not sufficiently confirmed within 10 minutes, the payment was unsuccessful and a refund would be due.”

Transactions failed

“As bitcoin has grown in popularity, it has become increasingly difficult for the network to sufficiently confirm transactions within the 10-minute time limit. Since the network isn’t able to handle the volume of instructions at the speed required, the majority of bitcoin transactions on the PayFast platform ended up being unsuccessful.”

It got worse, PayFast said. In addition to the frustration that buyers experienced when their payments failed, bitcoin users also often incurred a non-refundable fee for every attempted payment. This is the fee the network charges to process a transaction. “Anyone trying to pay using bitcoin opens themselves up to the risk of paying the bitcoin processing fee, even if the payment fails. The processing fees themselves may vary according to the bitcoin price and the time required for acceptance to the blockchain. The more bitcoin gains in value, the higher these fees,” the company said.

“The overall slow performance and computational power consumed by the bitcoin blockchain to validate transactions make bitcoin less useful currently as a means of exchange and better suited as an asset.”

PayFast said that it’s estimated that the bitcoin network can only process about seven transactions per second, whereas Visa handles about 24 000 transactions a second. “Even newer cryptocurrencies fare significantly better than bitcoin, with ripple processing approximately 1 500 transactions per second.”

It said it may again support bitcoin and other cryptocurrencies in future, but not until the problems are resolved.

“Until such time, we have decided to end support for bitcoin. This means that bitcoin will no longer be displayed as a payment method on PayFast. If you, a PayFast merchant, currently have bitcoin enabled and are promoting it as a PayFast payment method on your website, we recommend that you remove any logos and references to bitcoin before 20 July.” — © 2019 NewsCentral Media

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Late Hal Finney Predicted $10 Million Per BTC After Satoshi Release

Although some Bitcoin critics will spite anyone who believes that the cryptocurrency will be worth more than 1000× its current… Read More

4 hours ago

Bitcoin {BTC} adoption: Booking.com chief as well as U.K. Central Bank leader are optimistic about virtual currencies

Bitcoin is placed right at the top of the market, with the BTC dominance rate currently at 68.7%. The trading… Read More

4 hours ago

Top Pro Athletes Like Messi Would Make a Killing in Bitcoin Earnings

According to Messari research, Lionel Messi's take-home pay would be "12,700 $BTC" annually. Cristiano Ronaldo's would be 10,000 bitcoins. |… Read More

4 hours ago

House Financial Services Committee Will Continue Libra Review

Representative Maxine Waters, chair of the United States House of Representatives’ Financial Services Committee, says the committee will continue to… Read More

4 hours ago

Circle CEO Says Tokenized Fiat Currencies Are on the Horizon

Jeremy Allaire, the CEO of blockchain-based, crypto-inclusive money transfer company Circle, said that the firm has long held that major… Read More

4 hours ago

Devcon uses Ethereum platform to issue 150 tickets

Devcon5, the Ethereum Foundation’s fifth annual conference which takes place October 8-11 in Osaka, Japan, is using the Ethereum platform… Read More

4 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More