This is a long overdue post, on 2 June 2016 Roslyn Lavery from PayFast presented a talk on the Trends of Online Payments in South Africa. I am blogging about it in August. But, that is the nature of this year, life has been galloping on at an incredible pace!
This is a somewhat disjointed post because my notes are now a couple of months old, but here are some of the highlights from Roslyn Lavery’s talk.
Roslyn began by charting the progress of online payments, explaining that the trend began with products like air tickets and downloadable products but gradually increased to the space where we are today. (In the past week I have bought air tickets, books, hair dye and a membership online).
While PayPal has a strong international market share, the South African regulatory environment has resulted in a situation where they are an expensive provider.
The South African market is distinct from the international market where the majority people have credit cards, but the South African market where 20-30% of the market makes use of electronic funds transfers. About 1 percent of South African online commerce transactions are completed using cash on delivery.
The South African bankable population is strongly banked, with 78% of the bankable population having a bank account. The requirements to be regarded as part of the bankable population are meeting the legislated age requirements and having a disposable income.
While the majority of customers don’t perceive a difference between making payment online and in a physical store the banks do.
From a practical point of view, Roslyn recommended offering as many payment options as possible. The main difficulties that online retailers experience relate to showcasing products through their stock photography and the actual logistics of getting the products into their customers hands. The online space through products like WooCommerce and Shopify have made the technical side of running an online store easier than ever.
Throughout South Africa, the rate of fraudulent transactions using credit cards is about 1.5% while PayFast boasts an exceptional rate of less than 0.3% of all transactions. The highest level of fraudulent transactions takes place with resellable products.
The main benefits of using PayFast:
- Strong support for both the merchant and the customer (this is a huge benefit to small businesses because it drastically decreases their support requirements).
- PayFast offers integration with major e-commerce platforms including WooCommerce and Shopify
- PayFast can accept international cards.
A few weeks after our meetup, PayFast also announced that they now support recurring billing!