Capitec, a major South African retail bank, has decided to stop customers from making EFT payments (bank transfers) and real-time payments (immediate transfers) to cryptocurrency exchanges. The bank says this is to protect its customers from fraud.
The bank clarified its position, stating that they want to protect customers from potential fraud. In their words, “Capitec is committed to protecting our clients from fraud, which is why we made the decision to block EFTs and immediate real-time clearing payments to crypto exchanges on our app and business web interface.”
However, Farzam Ehsani, CEO of VALR (a South African crypto exchange), responded to the new development. He explained that Capitec informed VALR that it would block its customers from sending money to the crypto exchange.
He added that this decision was specific to Capitec, as other banks in South Africa still allow these transactions.
Read Also: South Africa Tax Agency wants crypto users to declare assets
Inconsistency in restrictions
Carel de Villiers, co-founder and CEO of Shiftly, raised a complaint on X (formerly Twitter) that he couldn’t fund his VALR account using Capitec. He showed an error message from Capitec that said payments to the crypto exchange were not allowed.
He, however, confirmed that it works on the web but is blocked on mobile, suggesting inconsistencies in the restrictions.
Capitec’s Suggested Alternative
Capitec mentioned that, given the growing interest in cryptocurrencies, they recommend using their Capitec Pay feature as a more secure alternative for making payments, and they are working to get this integrated with crypto exchanges.
Capitec explained that its app now works in real-time with their Fraud Centre, allowing them to block payments or warn users if fraud is reported on any accounts. This new feature means that if a bank account has confirmed fraud, it will be blocked for all Capitec customers, regardless of how new the account is or which bank the account belongs to.
In their words, “This means that a brand-new account, created at any bank just a few hours ago, with confirmed fraud against it, will be blocked for all Capitec clients.”
What You Should Know
The South African Revenue Service (SARS) has announced that it will include cryptocurrency transactions in its compliance programs, requiring taxpayers to report their crypto transactions and investments for tax purposes.
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