PayFast is a South African Online Payments Processor or payment gateway. The company has expressed its frustrations that led to dropping bitcoin, through an announcement on its website. From July 20, 2019, PayFast has said that it will cease supporting bitcoin payments because the transaction fees are high and confirmation times take longer than usual.
According to the company, Bitcoin’s current limitations are responsible for the difficulty for the company to offer it as an alternative to traditional payment methods. Cryptocurrency is expected to make online transactions cheaper, faster, and convenient but it isn’t quite the case for them. “Unfortunately, there are a number of limitations and design flaws unique to Bitcoin that make it an impractical substitute for cash, including high transaction fees and long confirmation times for buyers. We have tried various ways to mitigate these problems, but unfortunately, these issues are fundamental. 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 20 July 2019,” PayFast explained.
A ten-minute window for the confirmation of bitcoin payments was usually available on the platform before the announcement. Bitcoin network had repeatedly failed to confirm some payments in the ten minute time frame and this caused such transactions to fail. Currently, the Bitcoin network does not have the power of speed that can equate the number of transactions that need processing. “To eliminate any risk posed by bitcoin’s price volatility, Luno locked the bitcoin to ZAR exchange rate for a ten-minute window. If the transaction was not sufficiently confirmed within ten minutes, the payment was unsuccessful and a refund would be due,” PayFast said.
The popular payment processor, VISA handles 24,000 transactions per second which way up from the bitcoin network’s 7/second. The Lightning Network in charge of bitcoin’s, however, promises improved transactions by making them instant, low-cost, scalable, and acceptable across different platforms. PayFast is most certainly still open to the crypto space as they hope that it grows soon enough an accommodates faster payments over time.
“We are eagerly following the developments of cryptocurrencies and the supporting technologies that are aiming to enable faster payments. As soon as these become workable alternatives, we look forward to supporting cryptocurrencies as a payment method in the future,” the South African company stated.
PayFast had “entered into an exciting partnership with South Africa’s biggest Bitcoin exchange, Luno (previously known as BitX)” in June 2014, marking its first move of adopting bitcoin.
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