As any South African who has tried to make money online undoubtedly knows, Paypal does not allow us to receive funds via its system. We can only use it to spend money at other merchants, most often via our credit card.
This has been a huge bottle stopper in the e-commerce climate in this country. PayPal is seen as a secure method to buy online, because the customer never reveals his credit card details to the merchant and thus avoids potential fraud, misuse or abuse of the information. And by not having access to receiving funds via PayPal, South Africans who wish to legitimately collect money from others online are forced to get a merchant number, which in itself is a lengthy and expensive method. (I say legitimately, because there are ways for us to get a PayPal account if we use some loopholes and stretch the system’s boundaries. Email me if you want more info 
)
Now a South African venture is aiming to make e-commerce easier for South Africans. Payfast.co.za, which is now officially out of beta, allows merchants to collect online payments from other South African customers via instant EFT.
There are a number of ways you can collect money: by sending a request (invoice) via email, or by including a “Pay Now” button on your website (this works best for fixed amounts, such as conference registration). You can also use it to receive payment for a shopping cart purchase (where there is more than one item and the amount varies depending on the customer), but that requires a bit more coding on your side.
The unfortunate caveat is that all payments are made by EFT from any of the four major banks and you cannot pay by credit card. That has obvious limitations, the most striking of which is the fact that it limits you to South African shoppers only. Should you want to sell a product or service to international customers, you would need another (maybe additional) system. Payfast says it is working on credit card integration and should have it in place by the end of 2008. From my experience I ignore any timeline promises on any website, but I do hope that this feature is added soon.
Nevertheless, even with this limitation, I can see a lot of opportunity for Payfast. For instance, I am about to start offering short courses on social media to the public. Payfast is a great way for me to collect the payment for these upon registration. Bidorbuy (an investor in Payfast) has integrated it into their auction engine. This allows buyers who do not have credit card facilities (a large chunk of them, I would imagine) to immediately pay for their winning bid/purchase via EFT. The benefits to the seller are obvious.
Another benefit is that sellers no longer have to wait for two to three days before they receive confirmation of the EFT. It is authorised immediately. So, in theory, a retail shop can sell a high price item to a customer, send him an email request to pay the invoice, the customer pays immediately via EFT, and shop gets immediate confirmation and can release the goods. At present, the confirmations usually come form the banks themselves via fax and there is great opportunity for fraud.
So no, it’s not Paypal yet. But it does fill an important gap that will allow a lot of people who would otherwise struggle to collect money online to do so effortlessly. And hopefully it will play a pivotal role in promoting trust and usability in local e-commerce.
have you taken a look at Setcom? It seems to do the same job as Paypal, and without the disadvantages of the South African version
I would be careful with statements like this ‘PayPal is seen as a secure method to buy online, because the customer never reveals his credit card details to the merchant and thus avoids potential fraud, misuse or abuse of the information.’ and rather do some research on the safety of PayPal. Following links might give you an idea on safety issues around it.
http://news.netcraft.com/archives/2008/05/16/paypal_xss_vulnerability_undermines_ev_ssl_security.html
http://www.falle-internet.de/de/html/pr_commu3e.php
Great stuff! Thank you for letting us in on this. I know a number of people like artists who would really like to sell their work online. Setting up online shops is fairly easy, but payment has always beent he bugbear.
I just wonder whether Paypal will suddenly start to show interest in South Africa.
i know you have bank accounts in another country, lady. since you’re probably a permanent resident, at the very least, do you admit income paid into them or into your paypal account?
because that’s a major reason south africans aren’t allowed to have paypal. they can keep it in their paypal account, use their paypal credit or debit card to access it, and not report a single cent to sars.
sars doesn’t like that.
To those, like Mike A, who think that PayPal might “take an interest in SA” please remember that PayPal was here in full .. they were driven out by the protectionist and anti-competitive practices of our banks and by SARB’s paranoia over maintaining currency controls ..between them, they have cost the country billions of rand in lost opportunities. Well done Payfast – I shallbe implementing it asap.
@lynne
You’re right, Setcom is a good alternative, but with much higher fees.
@ALX
I did not say Paypal is fraud-proof. I said that the cc information is not submitted to the merchant, and thus potential fraud is avoided (should the merchant not be legit). I stand by that statement.
@mundundu
The only way that you know that is if you’re me, and you’re not, so you don’t.
But I have heard that the fact that Paypal is not here has actually nothing to do with the Reserve Bank, but rather with with Paypal’s aversion to potential fraud and abuse by an “African” country.
But who knows?
@Andrew
That’s interesting. I didn’t know that Paypal was ever here “in full”. Can you direct me to some online links re that? Thanks.
@Gustav
Thanks for this link, where you can read more info on online payment options in Africa
http://www.davidajao.com/blog/2007/09/26/is-a-common-african-e-commerce-platform-possible/
I’d love more info on how to go about using Paypal.
I sell CDs through a U.S. company, and they will only deposit the proceeds into a Paypal account or post me a cheque. With the state of our Post Office and the high costs of depositing foreign currency, this is not working out very well.
Please tell me how I can us paypal to receive funds.
Graeme
FWIW i have had a good success rate with Moneybookers especially freelancing & selling once off goods to European & South American clients.
For USA Trade, paypal dominates.
Hi I found this website http://www.webs.co.za they have a work around to accept PayPal payments from your website.
paypal is nice.
two of my clients pay me via paypal, and i can choose which account i want it to go to, based on which bills i need to pay. it’s fantastic.
also, wizeman… i looked at that site, and there are WAY too many misspelled words for me to feel comfortable with using it.
WAY too many.
Just want to get email adress for Eve Dmochowska as i need a paypal account to recieve payments for data entry work done and many companies only wish to pay into a paypal account.I have to then try and access these funds but it seems impossible with the current paypal situation. Any help would be appreciated.