Africa Tech Trends is a fortnightly column by Tom Jackson focusing on the most important developments in Africa’s technology industry, and examining how technology is changing the way business is being done on the continent.

Bitcoin in Africa

It is too early to say whether it will truly take off, but Bitcoin is arriving in Africa. The software-based online payments system – or cryptocurrency – is not backed by any central bank, but has nonetheless taken off across the world. Nor has it been short of controversy.

South Africa’s largest Bitcoin exchange BitX, which launched last year and operates in South Africa and Kenya as well as other countries, has now released a mobile app promoting better understanding and use of Bitcoin.

Ghanaian company Beam is another using Bitcoin, looking to undercut the likes of MoneyGram and Western Union, while Bitcoin ATMs are also arriving on the continent. The virtual currency is also being used to tackle the Ebola crisis. Beam has launched a Bitcoin Against Ebola website, which allows Bitcoin holders to make donations in support of relief efforts in Sierra Leone.

It is still early days, and much of what will dictate whether Bitcoin takes off in Africa depends on how it manages to hold up in the rest of the world. But Africa has a history of searching out alternative payment methods, so why not?

Doing more with mobile money

Everyone knows about the importance of mobile money to Africa. On a continent where less than 30% of the population are bank account holders, and fewer still own credit cards, mobile has become key. There are more mobile money accounts than bank accounts in at least nine countries in Africa. The biggest and most famous service – Kenya’s M-Pesa – has over 19m subscribers.

Now that mobile money is well established, the trend is towards how to do more with it. This column has focused before on inter-operability and making it easier to move money regardless of country or service provider. But operators are also adding extra services on top of simply being able to send and receive money.

Kenya’s Safaricom has led the way with this. Last week the company – which operates M-Pesa – partnered local start-up Dynamic Data Systems to launch payments tracking app M-Ledger. The app records mobile money transactions, with users able to view and manage past transactions. Data can be extracted into a spreadsheet.

Safaricom has been ahead of the game with these extra services for some time. In 2012, it partnered the Commercial Bank of Africa (CBA) to roll out M-Shwari, which gives M-Pesa customers access to an interest bearing savings account as well as the ability to take out small loans. The 2013 launch of Lipa na M-Pesa enabled merchants to accept payments for goods and services from their customers.

However, Safaricom is not the only company at it. Tigo Tanzania in September launched Tigo Wekeza, which allows customers to earn interest on their mobile money balances. Customers can also recommend a non-profit beneficiary.

This wave of extensions of the use of mobile money, demonstrates the concept is here to stay and set to become more pervasive. Traditional banks must innovate to catch up, or become redundant for most Africans.

Bridging ‘digital divide’ in rural areas

Kenya’s Universal Service Fund (USF) has finally become a reality. Such funds are common in other parts of the world, and involve telecoms firms paying subsidies and fees to the fund. This money is the used to bridge the digital divide by rolling out telecoms services in rural areas.

The digital divide in Africa is gaping and real. The problem is that rolling out telecom infrastructure to rural communities is difficult, expensive and not sustainable for operators. Though it is certainly an admirable thing to attempt to connect rural communities, most providers find that the costs of rolling out connectivity outweigh the gains in terms of new customers. A USF is the best way Africa has yet found to deal with this problem.