The world is shrinking, with distance and borders becoming increasingly arbitrary as the “global village” narrative takes centre stage.
This is all a consequence of an information age where ideas, cultures, solutions, payments and investment can move from one corner of the world to another faster than ever before.
Africa is also part of this renaissance and rather than get left behind, it has eagerly embraced this connected world because of all the opportunities for development that come with it.
However, this shiny, uplifting pitch of a region on the rise together with everyone else doesn’t tell the whole story. Africa, though more aware of its role in the global order, has more than its fair share of problems that need solutions.
In one very important area – payments and remittances – the continent still has a lot of work to do if it is to rise to the demands of what it means to be globally relevant.
Complicated payments into and out of the continent
The continent’s payments puzzle extends to every sort of transaction, affecting money that flows inward, outward and within the region.
It is markedly difficult to move money across African borders either as a sender from a different continent or a business or individual in Africa trying to buy something or settle a bill in a neighbouring country or overseas.
However, this market is frustrated by the highest transaction fees in the world and by banking systems that are not geared for small transfers because of steep, flat fees.
At the same time, the continent’s significant resources and rising economic fortunes continue to attract foreign investors that are inclined to transfer part of their profits back to their homelands.
Rising fortunes also mean an increase in disposable incomes with Africans interested in paying for goods and services from other parts of the world.
All these cases have in the past been addressed by traditional financial institutions like banks, money transfer agents as well as rudimentary solutions like the passing on of money through a third party.
The solutions are not entirely sustainable because of issues like high costs and punitive charges as well as security concerns where physical currency is involved.
There is clearly room for another solution that addresses all these issues.
Digital currencies and Golix’s payments solution
A Zimbabwean startup decided to take these challenges head-on, turning to technology to develop a solution that has the potential to provide Africans with financial autonomy.
It’s called Golix and it is a digital currency exchange different from other exchanges by virtue of being a platform for African remittances and payments from the continent.
Started in 2014 as BitFinance by two friends, Tawanda Kembo and Verengai Mabika, it was Zimbabwe’s first Bitcoin company.
Both Verengai and Tawanda noticed how the autonomous nature of digital currencies would be a solution to the payments headaches they had experienced in previous startup ventures and in ordinary day-to-day transactions.
They first focused on the buying and selling of bitcoin and built a trading platform which was launched in 2015, providing Zimbabweans with a place where they could buy and sell bitcoin using local payment methods.
Since that time a lot has changed in the world of cryptocurrencies and the platform has also gone through its own transformation.
It experienced a massive growth between 2016 and 2017, with transaction volumes doubling almost every month as Zimbabweans struggling with international payments increasingly turned to alternative solutions like digital currencies which are free from institutional controls and barriers.
The platform now handles six cryptocurrencies, its name changed from BitFinance to Golix (it’s more than just a Bitcoin platform now) and every month the platform now handles over 60,000 transactions from over 40,000 users.
It has expanded its team, bringing more hands on deck in the crucial customer services department and the recruitment of an army of software developers in progress.
Golix is also eyeing the whole of Africa as a market, with ambitious growth plans lined up.
It recently announced plans for a token sale, more commonly known as an Initial Coin Offering, which is a formal fund raise and investment drive that’s globally understood as the digital currencies equivalent of an IPO.
The future of all African payments?
As more people turn to digital currencies like Bitcoin to send money into and out of the Africa, the question of whether or not this will be the future of all payments does arise.
Will digital currencies eventually overtake staid and slow-to-respond service providers like banks in the same way that mobile money has eclipsed retail payments?
The team at Golix is convinced that this will be the case but more importantly, so do the thousands of users that are now finding financial autonomy in digital currencies.