Table of Contents
Key Points
- Capitec Bank has blocked EFT and RTC payments to cryptocurrency exchanges, citing fraud prevention and promoting Capitec Pay as a secure alternative.
- The crypto community criticized Capitec Pay’s higher fees, with industry leaders noting its 1-1.4% transaction cost compared to EFT’s minimal charges.
- VALR CEO Farzam Ehsani argues that the policy is disproportionate, stating that other South African banks still allow crypto transactions.
Capitec implements crypto restrictions over fraud risk concerns
South Africa’s largest retail bank by customer base, Capitec Bank, recently imposed restrictions on electronic funds transfers (EFTs) and real-time clearing (RTC) payments to cryptocurrency exchanges, emphasizing fraud prevention as the primary motivation. Capitec now requires customers engaging in crypto transactions to use its alternative payment option, Capitec Pay, which comes with a higher transaction cost. While the bank stresses this measure as a means to protect users, it has triggered significant backlash within South Africa’s crypto community, who argue that Capitec Pay's fees—at 1 percent to 1.4 percent when linked to third-party services—are substantially higher than EFT fees.
Crypto community questions Capitec’s costly shift
In a statement, Capitec said the policy reflects its commitment to customer safety. “Capitec is committed to protecting our clients from fraud, which is why we made the decision to block EFT and RTC payments to crypto exchanges on our app and business web interface,” the bank explained, urging clients to adopt Capitec Pay for secure transactions. The bank also expressed intentions to collaborate with crypto exchanges not yet compatible with Capitec Pay to streamline the transition.
The move arrives as South African interest in cryptocurrencies grows, with Capitec acknowledging this demand but reiterating security as a top priority. However, local crypto advocates have voiced concerns over Capitec Pay’s cost, stating that the high fees are a significant burden compared to EFT alternatives.
Crypto industry voices frustrations over Capitec’s approach
Farzam Ehsani, CEO of South African cryptocurrency exchange VALR, criticized the restrictions, suggesting that they are disproportionate to actual fraud risks in crypto transactions. Ehsani noted that the percentage of fraud-related crypto transfers is minimal, contending that Capitec’s restrictive policy could strain its relationship with the South African crypto industry. Posting on X (formerly Twitter), Ehsani remarked, “Capitec Pay is extremely expensive compared to EFT… a more reasonable approach would be fraud warnings rather than outright restrictions on legitimate crypto transactions.”
While other South African banks continue to allow direct transfers to cryptocurrency exchanges, Capitec’s decision sets it apart, sparking debates over the bank’s alignment with the rising demand for crypto services in the region. Industry leaders caution that this approach may alienate Capitec’s crypto clientele, raising broader questions about the bank’s long-term strategy within South Africa's evolving digital asset market.
