Absa South Africa, the third largest bank in South Africa, has restricted the services of AltCoin Trader by disabling the QR payment code of Zapper, a payment provider of DPO PayGate, a client of AltCoinTrader.
AltCoin Trader, the third largest crypto exchange in South Africa, is among the top 5 clients of DPO PayGate by payment volumes.
AltCoinTrader has decided to take the issue to court for an interdiction to stop ABSA from restricting its services with Zapper. Zapper claims it is under direct pressure from ABSA to terminate its service offering to AltCoinTrader, despite the exchange being a third-party client.
Speaking to Global Crypto TV, a South-African crypto news outlet, Richard De Souza, CEO, AltCoinTrader, said:
“The notice came as a significant surprise to us,” de Sousa told Global Crypto, “we have an excellent relationship with the PayGate team, and have been told on numerous occasion that our payment volumes via their service make up some of their largest. So why they would cease to serve us really seems counterintuitive.
PayGate have a contract with us, and this legal action is to ensure that they comply to the contract. If it gets to the stage where contractually PayGate is able to terminate our services in a reasonable way and within a reasonable time frame, we will consider that. However this seems to be a bullying tactic and is unacceptable not only in the crypto industry but for business in general.”
PayGate, a service provider to Zapper (a South African fintech company that provides seamless payments, vouchering and loyalty services), is a leading payment service provider operating in 15 countries across Africa. The online platform serves over 25, 000 merchants that include airlines, hotels, restaurants, and e-Commerce businesses. Zapper is one of its
The company recently partnered with MasterCard in an effort to launch tokenization efforts as part of MasterCard’s efforts to onboard over one billion people across the African continent.
In South Africa, we’ve partnered with @DPOPayGate, @walletdocApp and @peachpayments to roll out our tokenisation services to merchants and top billing platforms over the next few months. pic.twitter.com/Nep553Q9tk
— Mastercard MEA (@MastercardMEA) August 20, 2020
MasterCard has already opened its platform to digital and crypto firms that would like to leverage its vast digital network to launch customized cards for their clients.
This is not the first time that crypto exchanges have had altercations with banks in South Africa. In late 2019, FirstRand Bank, one of the ‘big five banks’ in South Africa, notified major South African cryptocurrency exchanges – Luno, ICE3X, and VALR – that their bank accounts would be closed, prompting a move by exchanges to Standard Bank, one of the most crypto-friendly banks on the African continent.
Cryptocurrencies are not regulated in South Africa. However, an Intergovernmental Fintech Working Group (IGFWG) has drafted a policy position paper on crypto assets which is currently looked at by regulators.
NB: BitKE will be interviewing AltCoin Trader CEO, Richard De Souza, and we shall update on the unfolding story
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