In Africa, citizens are spending an approximately 27 cents to top up their mobile airtime using a crypto token. It can be strange in the industry of crypto as the vision of the blockchain is to allow the movement of million microtransactions across the world as a challenging one to reach.
However, Wala, a South Africa crypto startup is trying to prove that a simple ingenuity and effective embrace of a nascent technology will make cryptocurrency as a better payment system compared to other traditional options that African countries have. According to the CEO of Wala, Tricia Martinez, they believe in cryptocurrency as a drive for Africa’s financial revolution. Martinez raised $1.2 million selling Ethereum-base “dala” tokens in December as an initial coin offering (ICO).
Based on CoinDesk, Wala is currently facilitating 6,300 daily dala transactions for over 57,000 wallet accounts in South Africa, Uganda, and Zimbabwe. The majority of these transactions are micropayments under $1. The crypto startup displays not only blockchain micro-transactions but also the narrative that the crypto market is suitable in developing nations.
Before the token sale, the startup facilitates customer transactions through mobile app with the current infrastructure in these African nations. It is to support the business models, despite the high charge fees of local banks. The latter system is hurting the startup’s customer base and the firm’s business model.
With this, Martinez concluded that Zero-fee is the solution. However, banks could not support it. Cryptocurrency provides them to facilitate payments through a peer-to-peer network with reduced fees. With over 100,000 merchants of goods and services, the startup established a small-scale circular economy through the Wala’s platform.
Martinez explained that with Ethereum micropayments, they could pay their electricity bills, buy airtime data, and pay kids’ school fees and more. She added that they could manage it across ten markets. Based on bitinfocharts.com, Wala’s Ethereum transaction fees is around $0.17 to $4.15 this year. Through the use of microraiden technology, Wala gets around with the transaction fees.
Microraiden is a simple version of Raiden, technology like the bitcoin’s lightning network. It pushes transactions off-chain with an effort to escalate scale. Unlike Raiden, the microraiden technology can allow decentralized app developers to set up a channel that receives payments. Wala takes in the user payments using that channel and batches the transactions to settle it in the Ethereum blockchain. Wala has a venture capital investment of $2.2 million.