Payment Integration Options for E-Commerce in South Africa

e-Commerce is a growing industry within the economic sector in South Africa. Standing for electronic commerce, and well-known and referred to by all as e-commerce, the phenomenon involves the distribution and exchange of goods online for monetary value. In other words, it is the practice on online shopping through the use of a credit card, or any bank card.

Unfortunately, due to our histories of inequality, and the distinctions and particularities that categorise our market demographics, South Africa has been behind the curve on all things digital, and innovation. Despite this, there has been a recent shift to the digital, where, ‘physical goods, digital goods, and services’ are promoted, and even sometimes provided electronically.

A particular benefit of e-commerce, especially in South Africa, is the potential reach it poses to the business, and the increase in possible customers who consider and support a particular brand. As Satist SA emphasises, it is a growing phenomenon, both in size, importance and value to business owners and customers alike, ‘the number of users is expected to amount to 21.5 million users by 2029’.

RMB also forecasts, ‘the value of e-commerce transactions in South Africa is expected to surge 150% to R225bn by 2025 in response to a marked shift in consumer behaviour’. It is due to this, that payment integration becomes a priority, too.

Holistically, payment integration refers to the ‘checkout’ option that customers encounter when deciding to finalise their online orders. Due to the unique economic landscape of South Africa, payment integration becomes unique, too, with a variety of options available for those wishing to make transactions with their bank card.

I therefore endeavour to expand on integration best practices, how it is adopted in a South African context, provide examples of payment integration options, how to best implement it for business owners, and also present related risks and opportunities of e-commerce integration in this Global South context.

So What does Payment Integration Actually Mean?

What are the Key Elements Business-Owners Should Consider?

It is important that customers not only have a pleasant experience when perusing your website, or shopping for resources and services on digital mediums, but so too, when proceeding to the check-out, entering their card details, and feeling satisfied with the payment going through smoothly, and hassle-free.

There are resultantly many factors that should be considered and weighed out, in accordance with customer experience, the longevity, and sustainability of the business. EY addresses important elements such as, ‘integration with other systems, scalability, customisation, maintenance, and customer experience’. Out of the above list, maintenance and user experience are of tantamount importance to the South African context.

Users need to feel comfortable and safe when utilising your e-commerce options. Due to cyber-crime, hacking, and overall uncertainty we experience as South Africans, it is important that we feel secure and protected in our private purchasing choices. This, alongside tailoring the purchasing experience according to the products and services on offer, and the customer’s needs, should be made a priority. Transaction fees, and experiences for local and international purchases should also be incorporated so that any user, from anywhere, is aware of the consequences and repercussions of their purchasing decisions on your website.

In summary, factors to consider include:

User experience
Security and protection
Transaction fees
Differences in local and international purchases
Solid and manageable maintenance
Compliments user preferences, and business types

The above are important to account for when integrating e-commerce into your business. It determines the effectiveness of not only your website ‘checkout’, but whether or not a customer is likely to return to, and support your business again.

Below is a list of the best e-commerce options for South African businesses. I will expand on some of them, and offer a holistic perspective on what their strengths are in the industry, as well as how business owners can implement them according to their business’s type, and needs effectively.

1. Payfast

Payfast is an e-commerce option for primarily online payments and transactions. It permits effective and smooth online transactions through either the use of bank cards, EFTs or Zapper. This means that customers can choose which kinds of transactions they make, based on their comfortability, as some will not feel comfortable with disclosing card details.

Payfast is easily available, and adapts to your business, and business type seamlessly. Small transaction fees are paid per successful transaction made on your website, with no monthly payments. The amount paid is therefore dependent on the success of your business. The more purchases made, the more you pay for this integration type.

Payfast transaction fees vary by payment method. Credit and cheque cards are charged 3.2% plus R2.00, Instant EFT and Capitec Pay 2.0% (min R2.00), and Apple Pay/Samsung Pay 3.2% (min R2.00). MoreTyme is 5.5% plus R2.00, Mukuru Pay 3.9% plus R6.00. Digital wallets like Masterpass, SnapScan, and Zapper charge 3.5% plus R2.00. Store Cards, Debit Cards, and Mobicred have fees of 3.2-3.5%. Payout fees are R8.70, with refunds charged at R2.00 excluding VAT.

Payfast integrates with over 70 plugins to easily integrate with int your store including: Shopify, Prestashop, Woocommerce, Mageto, and Ecwid.

Features:

Wide Payment Options: Accepts credit cards, debit cards, and instant EFT (Electronic Funds Transfer).
User-Friendly Interface: Easy setup and integration for e-commerce websites.
Mobile-Friendly: Optimised for mobile transactions, allowing users to pay via their smartphones.
Robust Security: Implements advanced fraud prevention measures to ensure secure transactions.

Advantages:

Local Expertise: Tailored for the South African market, understanding local consumer behaviour.
No Monthly Fees: Pay only for transactions, making it cost-effective for small businesses.
Multi-Currency Support: Accept payments in various currencies, appealing to international customers.

Considerations:

Transaction Fees: Fees may vary based on transaction volumes, so it's essential to analyse costs based on your expected sales.

2. Yoco

Yoco serves as the most efficient point of sale integration type in South Africa. Yoco is the integration platform to utilise when your business is in its early stages, and minimal fees and expenses can be allocated accordingly. As your business grows, so too, can your plan with Yoco.

As per their website, they characterise themselves as ‘smart card machines built for speed’. Promoted on the basis of ‘pick and pay’, you, as a business owner, can choose the card machines that work best for your business, order it, and have it delivered for free within three business days. You can also plug Yoco into your online store, it integrates with web builders like: shopify, woocommerce, shopstar, wix,

Yoco supports transactions with Mastercard, Visa, American Express, Apple Pay, and more. Pricing is also flexible, and tailored according to your business goals and objectives. Price plans start as small as R49 per month.

Yoco also comes with free benefits such as immediate pay-out, an online gateway which supports online transactions, cash advance options, and easy generation of invoices per preferred period. Yoco's transaction fees for online payments begin at 2.95%, with no minimum or fixed fee per transaction. The rate decreases based on your monthly transaction volume, dropping to 2.6% once you hit R100,000 per month. For volumes over R200,000, custom rates can be negotiated with Yoco. For international card payments, fees start at 3.40% and can decrease to 3.00% based on monthly sales.

Features:

Mobile Card Machines: Allows businesses to accept card payments anywhere using mobile card readers.
Online Payments: Enables e-commerce stores to integrate payment options on their websites.
Real-Time Reporting: Provides detailed insights into sales and transactions through a user-friendly dashboard.

Advantages:

Quick Setup: Easy onboarding process, ideal for new businesses.
Transparent Fees: Flat-rate transaction fees, ensuring predictable costs.
Strong Customer Support: Offers excellent assistance to help businesses with payment-related queries.

Considerations:

Limited Payment Options: While Yoco is expanding its offerings, it primarily focuses on card payments, which may not suit businesses needing diverse payment methods.

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3. Zapper and SnapScan

Zapper and SnapScan are mobile payment options; a fast-growing and much preferred payment option shared by many South Africans. Both mediums utilise QR-codes for immediate and seamless transactions: online and in-store.

As market leaders, the two entities compete mostly in their pricing, and the benefits they offer to customers. Both involve the transfer of funds to a mobile app, where payments can thereafter be made through scanning and entering a private pin.

Zapper offers many price plans, tailored according to your business type, and forecasted growth. Starting off solely according to transaction fees, plans increase according to monthly fees, alongside included benefits such as account managers, and loyalty cards. Zapper perks include a mobile app, 3D secure authentication, tapping, and customer support.

SnapScan is powered through Standard Bank, and may pose as an efficient choice if your personal and business bank accounts are registered through Standard Bank. Card options are fixed monthly, whereas QR-code options are flexible, and tailored to the net worth and longevity of your business.

These two entities therefore operate most effectively for fast, quick and seamless transactions, mainly through mobile payments; perfect for users who do not want to connect their purchases directly to their bank accounts.

4. Ozow

Ozow operates similarly to Zapper and SnapScan, due to the fact that it is cashless, and cardless. Operating primarily through the use of a mobile app, customers can link their bank account, and transfer a specific amount of funds through to the account. Upon making the payment, they can use QR codes, payment links or online transactions to make payments for varied products and services.

Ozow works hand in hand with customer protection and consumer privacy, optimising their safety in every transaction. As a business owner, perks for integrating this option include paying as you go, no monthly subscriptions, email and support, and 1.5% or a minimum of R1 on all transactions, made from any bank.

Ozow offers a free service for the first 12 months if your total transactions are below R1 million. Once you exceed that threshold, a 2.5% transaction fee applies, this fee decreases to 1.5% for businesses processing over R10 million monthly. Ozow imposes a refund fee ranging from R3 to R8.50, depending on the transaction value.

It's important to note that using their integrations incurs an extra charge; for example, transactions processed through Shopify are subject to an additional fee of 0.3%. This pricing structure makes Ozow an attractive option for growing businesses looking for flexible payment solutions.

Ozow pride themselves on seamless and effective transactions, but mostly their instant EFT services for varied payments, and varied contexts. An effective option for all possible payment methods, whether it is in-store point of sale, card payments, QR-code scans, or instant EFT. Ozow can be tailored according to your needs and available funds. They provide an extensive range of plugins to seamlessly integrate Ozow with various ecommerce platforms, including Xero, Shopify, CS.Cart, WP Ecommerce, Magento, BigCommerce, WooCommerce, Drupal, PrestaShop, J2 Store, and more.

Features

Instant EFT Payments: Enables users to make immediate bank transfers without needing a credit card.
User-Friendly Interface: Simple integration for online stores, ensuring a smooth checkout experience.
High Security: Utilises advanced security measures to protect transactions and user data.

Advantages

Quick Transactions: Funds are transferred instantly, enhancing cash flow for businesses.
No Credit Card Dependency: Allows customers to pay directly from their bank accounts, appealing to a broader audience.
Transparent Fees: Clear pricing structures with no hidden costs.

Considerations

Limited to EFT: Primarily focuses on EFT transactions, which may not suit all businesses.

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5. Peach Payments

As per their promotions, Peach Payments pride themselves as, ‘the trusted African payment gateway with easy e-commerce integrations and personalised multi-channel support’.

Peach Payments offer integration services in online card payments, instant EFTs, and QR-Code Scans. What distinguishes them from other mediums is its focus, and prioritisation of transactions made via mobile devices. Tailored specifically to payments occurring from this device, such integration can be used if you anticipate your customers will be supporting your business from their mobile phones.

A lot of individuals prefer to use a laptop as opposed to a smartphone, but the medium’s effective mobile app and widgets make for seamless and stress-free purchasing experiences. As per their growth plan, Peach Payments charge 2.95% + R1.50 per transaction, excluding VAT. Furthermore, there are perks such as no monthly or set up fees, easy plugins for setting up, phone and email support, and allowance of both local and international card and EFT options.

This method is ideal if your business model, and your users focus on fast and easy transactions on-the-go, within South Africa, and beyond.

Features

Multiple Payment Methods: Supports cards, EFT, and various mobile wallets.
Flexible Integration: Compatible with numerous e-commerce platforms.
Fraud Prevention Tools: Provides advanced security features to protect transactions.

Advantages

Customizable Solutions: Businesses can tailor their payment solutions to suit their specific needs.
Real-Time Analytics: Offers insights into transaction data to help businesses optimise performance.
Strong Customer Support: Provides excellent assistance to help merchants with payment-related inquiries.

Considerations

Fees: Transaction fees can vary, so businesses should review pricing structures carefully.

6. Mobicred

Aptly put, Mobicred operates as a digital credit card, with digital credit for all users. Prided as, ‘a simple and revolving credit facility that allows you to safely shop online with more than 4000 online stores in South Africa’, Mobicred accumulates collective customer spending into one collective monthly fee, debited to your customer’s bank account at the close of the month.

As a merchant, it is an effective integration option as it can effectively maximise your sales, especially if the goods or services on offer are luxury goods, or on the more expensive side. Customers can place the items on credit, which they will pay off monthly, and all funds come straight to you, immediately, courtesy of Mobicred.

There is also a greater chance of increasing sales, since customers will be more inclined to review and try out specific products on offer. Such is ideal for a business start-up, where you as an owner might need some exposure in the market, and growth in testimonials.

Mobicred applies a commission fee of 3.5% for each transaction, which represents the sole cost incurred by merchants for a Mobicred sale. Clients opting for this payment solution are responsible for covering the cost of credit.

Mobicred is accessible through several payment gateways, including Payfast, Paygate,Peach Payments, and PayU. To enable Mobicred for your customers, simply activate it in your payment options within one of these gateways. After receiving approval, the service will be readily available for your clients, providing them with a convenient and flexible payment solution that enhances their shopping experience. For further insight on pricing and included perks, sign up, and create an account at Mobicred to either learn more, or become a merchant.

Features

Flexible Payment Plans: Customers can choose to pay off their purchases in instalments.
Seamless Integration: Easily integrates with various e-commerce platforms.
Instant Approval: Customers can get approved for credit quickly and start shopping immediately.

Advantages

Increased Sales: By offering credit options, businesses can attract more customers and increase conversion rates.
User-Friendly Interface: Customers find it easy to manage their accounts and payments online.
Promotional Opportunities: Businesses can run promotions to encourage the use of MobiCred.

Considerations

Interest Rates: Depending on the repayment terms, interest may apply, which could deter some customers.

7. Paygate

Lastly, Paygate serves and operates as a conventional payment gateway, primarily for online purchases and transactions. Customers can make online payments immediately, yet securely, and merchants can process such payments with equal immediacy and effectiveness.

Payments are processed and ‘linked to over 70 banks worldwide- making it easier to pay and get paid online’. Particular benefits include low transaction fees, customisation to suit branding, functionality, and processing of payments 24 hours a day, for 7 days of the week.

It is therefore an option for time-saving, convenient transactions, if this is at the core of your brand identity, and business goals and objectives. Paygate offers two packages tailored for different business needs. The Paygate Switch package facilitates real-time payments but necessitates a merchant account. With a competitive base fee starting at just 0.25%, it proves to be the most cost-effective solution for businesses processing high transaction volumes.

On the other hand, the Paygate Plus option does not require a merchant account, allowing for simpler onboarding. However, funds are settled every 72 hours, and the transaction fee for this package is 3.5% on all transactions. Both packages operate on a month-to-month basis, enabling businesses to accept various payment methods, including cards and QR codes, alongside all other payment methods supported by Paygate.

Paygate seamlessly integrates with a number of shopping carts, including WooCommerce, Shopify, Magento, Ecwid, and many more. For businesses requiring unique solutions, an API is also available for custom integrations, ensuring that Paygate can meet the specific needs of diverse online retailers. This flexibility makes Paygate an excellent choice for merchants looking to enhance their payment processing capabilities.

Features

Diverse Payment Options: Accepts credit and debit cards, EFT, and mobile payments.
Recurring Billing: Supports subscription services with automated billing features.
Multi-Currency Support: Allows businesses to accept payments in various currencies.

Advantages

Established Reputation: With years of experience, PayGate is a trusted choice for many businesses.
Robust Security: Adheres to high-security standards to protect user data.
Comprehensive Reporting Tools: Provides in-depth analytics for better business insights.

Considerations

Complex Integration: May require technical expertise for seamless integration into existing systems.
Application can take up to a month to be approved.

The options outlined above therefore serve different purposes and can be used to effectively cater to the needs of both your business, and your potential customers.

How do we Facilitate Effective Integration?

There are many factors for you to consider when facilitating integration in your business. As outlined above, there are many considerations and implications you need to factor in and account for. From a technical standpoint, elements such as Application Programming Interface (APIs), plug-ins, and third-party integration are important to think about.

Application Programming Interface refers to the communications existing between two applications, and the exchange of data and information in the performance of a specific function.

In the context of e-commerce, APIs are important as they connect various points of information that are crucial to purchases and payments being made. Some of these information groups include, ‘catalogue content, order management, pricing information, and customer data, which can be controlled and managed through a business website, or platform of their choice’. Effective APIs therefore allow your business to keep track of customer purchases made easily and effectively.

Plug-ins and third-party integration fall into the same bracket, permitting collaboration and connection between two separate entities, with the goals of facilitating the same outcomes and functions for your business. Such assists in facilitating effective and smooth-sailing transactions, and record-keeping of data through all integration processes.

Third-party integration systems are also effective in managing staff data and progressions, where, ‘payroll, scheduling and HR tools’ can be accessed in one space, enhancing worker efficiency, and in turn, the processing of customer data, and purchases.

Third-party integration will therefore not only enhance the e-commerce facet of your business, but many other internal operations that are crucial to their functioning, too.

Such can be initiated through considering your business type, the needs and flexibility of your business as it potentially grows, the kinds of data that will be stored and recorded through the relevant processes you would like the third-party to assist with, and thereafter choosing the correct software.

Examples of third-party integration systems include:

Social Media Marketing: track the specifics of your followers, market segmentation and demographics, social media analytics, and activity existing on your page, connect your website to your social media platforms, too.
E-mail Marketing: market segmentation, website analytics, and reviewing the conversion rate.
Reviews: Google or website analytics
User Experience: which can also be tracked via your Google business profile, or website analytics.

Results of Implementation

Through integration, many opportunities arise to you, the business owner, but there are a lot of risks to be mindful of, too:

Opportunities

Effective payment methods and reflections.
Customer satisfaction.
Greater and easier access to transaction data and history.
Cost effectiveness: if the correct platform and integration method is chosen, the process can be cost-effective.
Edge over competitors who may still be transitioning into this digital medium: your business appears much more competent and appealing to customers.

Challenges:

Integration can be costly, so it is important to choose a technique and method that works best for your business’s goals and objectives.
There is the potential for many issues with security, such as the breach of consumer data and purchasing information.
Issues and discrepancies with refunds.
Identity theft and credit card cloning.

The pros and cons of payment integration seem to balance one another out; ultimately the implementation of integration will assist in pushing your businesses forward, and bolstering its presence and market share amidst the digital world and their operations. Although risky, it can prove effective for customer satisfaction, and gaining a competitive advantage.

From a South African context and standpoint, payment integration is crucial to the extent that it offers your business an opportunity for growth and change, that is manageable and achievable within our Global South context, and amidst the rapid globalisation and digitisation that permeates worldwide.