A South African recruitment firm revealed last week that it now accepts virtual currency payments in Bitcoin. Unique Personnel began using the virtual currency after facing difficulties making and receiving payments throughout Africa.
There are numerous reasons why companies struggle to make and receive payments. Cross-border transactions can be particularly problematic. The reasons include red tape, prolonged time delays from bank-to-bank transfers, theft, fraud, corruption, and failure to get the appropriate approvals and swift codes.
"The sooner our candidates can start, the more productive we all are here in Africa,” says Peter Mommsen, general manager of Unique Personnel. “Payment via block chain is instantaneous and we will honor all our guarantees for our services and candidates.”
That’s not to say that using Bitcoin isn’t without its risks. Mt. Gox, once the world’s biggest Bitcoin exchange, made headlines earlier this year after it filed for bankruptcy protection in Japan, saying it had lost nearly half a billion dollars’ worth of virtual coins after being hacked.
Lengthy payment terms for services provided have long been an issue in the staffing industry; not just in Africa but around the world. Some companies are reluctant to force the issue as it could potentially lead to the loss of future income. However, most companies live or die based on how quickly they receive payments from clients.
“We feel that faster payments can take place in Africa, the sooner the job can get done, which means a more productive environment and continent,” Mommsen adds.
Data released from Adcorp, South Africa’s largest staffing firm, revealed that although the country had lost a net 26,934 jobs during the month of May, this was primarily as a result of permanent recruitment. During the month, 54,184 permanent jobs were lost; but 27,250 temporary jobs and 4,555 agency jobs were gained.
According to Adcorp, this has been one of the anomalies of the past few years; despite the legislation that has been enacted to either reduce the use of temporary workers or raise the cost of hiring them, temporary employment continues to grow.
Banking payments have evolved from written letter of credit, to checks, to online transfers. Virtual currency could be the next step in our fiscal evolution. However, Mt. Gox remains the cautionary tale.