Our PayPal Woes Are Over – PayFast Is Online Payment Processing For South Africa

The highlight of Bloggerati Jo’burg (thanks to Matt and Vincent for hosting it) last night was meeting Andy Higgins, founder of BidorBuy – Africa’s largest online auction site.

For an entrepreneur as successful and well-established as Andy is, he was completely unassuming. In fact I wouldn’t have known who he was at all had he not introduced himself to me, saying that he followed this blog and some of the work being done on Cerebra and Afrigator. How ironic!

We chatted a bit about our respective interests and some of the projects we’re working on, when Andy dropped a veritable bomb (in a completely unassuming way) with a mention that he’s just funded the development of PayFast – a secure, online payment processing site for South Africa. Quite simply, PayFast makes it “safe for buyers to send money and easy for sellers to receive money” online.

Finally!

PayFast lists the benefits for buyers and merchants (bearing in mind that you don’t have to be a massive retailer to be a merchant – I could be a merchant, provided I’m selling something):

For Buyers

* Shop Online without disclosing your financial information
* Pay using EFT with the ease and speed of a Credit Card
* Shop with confidence online

For Sellers

* No monthly fees! Only per transaction fees
* Accept EFT payments with the ease & speed of credit cards
* No manual reconciliation required to accept EFT payments
* Reduced fraud through effective use of technology

This is fantastic news for all of us, and hopefully will signal a whole new generation of online start-ups and useful services. All credit to Andy and his team – by his own admission this is the project he is most passionate about right now, and I can see why.

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  • John

    How is it that our “PayPal Woes Are Over”? What is described here is a SA based CC transaction service for South Africans by South Africans.

    How will this let me receive money for work I do online for people overseas? How will this let people on eBay send me money for stuff they purchase from me?

    Until eBay offers offers this “PayFast” as a payment method I think our PayPal Woes are far from over.

  • http://www.yeahfi.com Henk Kleynhans

    I’ve spoken with Andy Higgins before, and I must agree that he is the perfect person to launch this, considering his experience with BidorBuy!

    I must however agree with John’s sentiment. The big idea of getting PayPal into SA is so that we can SELL to people in the global marketplace that is the internet.

    That is currently our holy grail.

  • http://www.mikestopforth.com Mike

    You’re both right, and sorry if I misrepresented it. As it stands the service allows EFT payments between our four major SA banks. The moment CC functionality is added to the site, which Andy tells me is in the pipeline, it becomes a global offering.

    Sorry about the confusion John, my enthusiasm got the better of me – it still is a step in the right direction methinks?

  • John

    Mike, I do agree that this development is good news for SA e-Commerce and if other online retailers sign up I would strongly consider signing up, especially if it offers some type buyer-protection against fraud that PayPal does.

    Looking back at my post I think I worded it rather harshly. While it’s true that it’s not a substitute for PayPal, it is certainly a step in the right direction.

    What would make this extra nice is if you could send money to an e-mail address rather than an account number. I know that whenever I make a once-off payment via EFT I am very nervous because making a small mistake on an account number can put it into the wrong account and it’s difficult, if not sometimes impossible, to undo the mistake if you don’t pick it up right away.

  • http://wogan.co.za/ Wogan May

    Ever seen AlertPay.com? :) They offer localised South African banking, as well as international to-your-email-account transfers. Just like paypal, except that it’s faster, prettier, and I actually got an email back from their support department in 36 hours.

    And they support South Africans.

    ~ Wogan

  • http://www.payfast.co.za Jonathan Smit

    Greetings All,

    My name is Jonathan Smit and I am the MD of PayFast.

    It’s great to see you guys discussing our service, but I must just let you know that we are currently in a period of beta testing, so are not yet fully operational.

    Yes, our first aim is to be a payment processor by South Africans for South Africans focusing on mediated EFT rather than Credit Cards.

    We will be offering credit cards in the future, and when that happens the offering does indeed become more global.

    John, User to User transfers have not been put in place yet, but the intention is to allow the sending of money to anyone with a valid email address (or cellphone number) just as PayPal does.

    A nice feature about our solution, is that you only have to enter EFT credentials once for your “PayFast Wallet” and after that, no more account numbers need be entered to pay anyone through our system :-)

  • http://blog.jacobson.co.za Paul Jacobson

    This is still a fantastic thing for us South Africans. The ability to transact more securely is a win. Being able to receive funds through PayPal would be fantastic but until that happens, let’s keep moving in the right direction.

  • http://www.ideate.co.za Andrew Smith

    This type of service requires critical mass in order to get off the ground, and it’s often a chicken-and-egg problem. Online retailers won’t add the payment option to their site until there are enough potential customers who use it, and the customers won’t sign up until there are places to use the account.

    I honestly hope they pull it off, and that the “techie” community (who are always the early-adopters) put their weight behind it to tip it over the edge. Perhaps PayFast’s marketing strategy should include offering a worthwhile incentive to bloggers to use PayFast in their business dealings so that a critical mass is built up quickly? Bloggers are early-adopters, they have an audience to preach too, and they often run entrepreneurial ventures that are able to adopt new technologies easier.

  • http://imod.co.za/index.php/2008/02/13/i-called-paypalcom-today-from-south-africa-and-asked-wasssup/ Chris M

    Interesting, the whole PayPal topic has been discussed on my blog in great extent, with over a hundred comments on the post. PayFast was mentioned, but the site looks very risky!

    Here’s the link: http://imod.co.za/index.php/2008/02/13/i-called-paypalcom-today-from-south-africa-and-asked-wasssup/

  • http://onlinesuccessblueprint.blogspot.com Rajesh

    I am currently working on an e-Book that offers several working solutions to the problem of accepting PayPal for South Africans and people from other countries similarly affected. Since I have to carry out a number of tests and write the e-Book, this should take at least 2 to 3 weeks at most.

    I will be offering the e-Book in the Warrior Forum as a special offer and need local testimonials. There are ample International testimonials for those looking for a PayPal alternative because of alleged bad service by PayPal.

    As such the ebook offers several working and low cost solutions, in the main, to all disatisfied internet marketers! The ebook also recommends other reliable payment processors for those disillusioned with PayPal and highlights a site that offers evidence based claims of law suits against PayPal.

    So rather than jumping from the frying pan into the fire, the e-Book gives the reader the facts and they decide which payment processor to use ultimately!

    I must admit that I battle with making e-Book covers with the titles. If someone can help doing the e-cover I will give them the free report that promotes the e-Book and later, when ready, a free copy of the “PayPal Problems Solved” e-Book and another high quality ebook that is a gem on starting and sustaining one’s online business in return for another high quality e-Book cover.

    Any takers?

    Regards,

    Rajesh

  • http://onlinesuccessblueprint.blogspot.com Rajesh

    Sorry, neglected to tick the follow up box.

  • http://www.macgeek.co.za Roger Saner

    Thanks Mike, this is good info. At the drupal groups site I’m asking what payment gateways South Africans use – do you have a particular recommendation?

  • kate

    Hi,

    I am a bit dissapointed that a company like PayFast dont even have a landline to contact them on, I dont feel comfortable communticatin electronically the whole time, it is really strange how they opperate like this.

  • Name (required)

    If I have a USA account, can I as a South African , receive money via Paypal????

    Buyers do not want to re enter their details to Payfast – they would rather buy elsewhere. I have to find a way with Paypal.

  • http://www.fastcharge.com Payment Gateway

    Another interesting article from your blog :) When will it stop….hopefully never

  • Zara

    heya – I am setting up a website for my client – What is the best alternative to paypal in SA? Most of my clients payments with be in Rands, but she wants an option to receive money from all over the world. Is Payfast even recognised as a gateway in the US for example? and AlertPay? Do I recommend to her that she opens a US bank account and has both options? I appreciate your advice.

  • http://www.starwaders.com Neville

    Am I missing something? The point is not that PayFast will allow receipt of international payments. The point is that Ebay is the facility that has worldwide exposure and that it only allows PayPal to be used. If I want to access the worldwide market, I have to use EBay and consequently have to use PayPal.
    Am I correct?

  • cli820461277

    ” .Hello,

    ‘Yes’, the Cart can be used for subscriptions.

    Majority of our merchants’ buyers are actually international. Sadly, not a lot of local users are accustomed to buying things online.
    It does not include a website (although we also offer that service separately). You can get any 3rd party to do the website and we will just integrate with them.
    regards
    hazz.hazz”

  • Rodney Mashigo

    Type your comment here…

  • Rodney Mashigo

    can payfast work to pay for online shopping for countries outside South Africa. Example China,Italy etc

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  • Davis Krendor

    I am surprised that no word has been mentioned about Setcom (http://www.setcom.com), well more so it’s now Monster Pay (http://www.monsterpay.com) which they did a re-brand for recently.

    These guys have basically been the South African PayPal for a little over 10 years now. The nice thing that they do though, is offer far more products than other gateways I have seen or used. They even have a Instant Guarenteed (and secure) EFT alternative, called SID (http://www.sidpayment.com). Should give them a look!

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  • buju

    the only way to receive payment via paypal in SA is to have a overseas bank account registered with paypal , and when you want your money in SA , transfer it or better still use the credit card of the overseas account (visa/mastercard) at the atm.

    then if you want to buy and pay using paypal (like on ebay) use another PayPal account that has your SA bank details.

    so next time you are on holiday overseas try to open a account in that country …..this is the only way for now.

    I just wonder when I use my Australian credit card to draw money at the ATM if sars can actually see what im doing ?

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    Hangzhou Yisite Tielin Electronic Technology Co.,Ltd. is a manufacturer specializing in eas accessories (eas tagand security tags ) , Our products are widely applied to eas in supermarkets and department stores. transfer it or better still use the credit card of the overseas account (visa/mastercard) at the atm.

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    There are TONS of people making money in self improvement every year…from big guys on infomercials to “underground” marketers in the comfort of their OWN homes.

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    • buju

      FNB now offer paypal services , although a bit slow (about a week to get your money from paypal) its w0orking , Ive now done 4 transactions recieving money via paypal and ive got my money ) minus the fnb commisio) , but its not so bad and ITS WORKING ,

    • buju

      FNB now offer PayPal services , although a bit slow (about a week to get your money from PayPal) its w0orking , Ive now done 4 transactions receiving money via PayPal and Ive got my money ( minus the fnb commission) , but its not so bad and ITS WORKING , now i can really expand my business to overseas markets ….

      • Silver

        I am so glad someone is successful. I have been to FNB six times now. They have opened three different accounts for me.

        What can be simpler than to open an account for my CC and give me the right card to link to Paypal?

        Every time they give me the wrong card to link to Paypal, and the cycle starts again.

        I have even phoned the Paypal helpline in SA and given FNB staff the correct information, and alas, it has taken me three weeks to get my account connected and it still is not done.

        This is even after screaming at FNB “customer” or is it “victim” help line. They jumped on the local manager and the whole situation is still in the toilet.

        My internet activities are suffering because of this I have lost deals for quite a bit
        because of the incompetence of FNB and my inability to accept Paypal.

        I have had both business and personal accounts with ABSA and Standard bank now for many years, and never a hiccup.

        I have decided to give FNB until Friday 18/06/2010 close of business and should they not have things sorted out I will go over to Alertpay and close all the useless accounts they so kindly opened for me

  • http://MaxTheITpro.com Max – The IT Pro

    Well, there’s a mobile money REVOLUTION going on in Kenya called M-PESA (pesa = money in Swahili).

    I’ve been ‘hanging out’ in East Africa (mainly Kenya) for the past 5 years from Canada & I just have to say that M-PESA rocks!! You won’t find this in Sillicon Valley or in Japan folks! I gotta take my hats off to Safaricom for really delivering the goods. I went to buy some aloe vera juice @ the supplement store the other day in downtown Nairobi and paid the cashier with M-PESA.

    When I was coming back from Arusha, Tanzania a month ago, I sent the Riverside Shuttle (based in Nairobi) my payment via M-PESA. I just put in my Safaricom sim (they roam with Vodacom Tanzania), went to my M-PESA menu & sent the funds to Johnstone at Riverside Shuttle. He then told the office in Arusha to give me a ticket the next day. Ya can’t do that in America, Canada, Japan, Korea, South Africa, Russia or China.

    What’s most amazing about M-PESA though is that I can use ANY bank’s ATM to get cash. I go to the “ATM Withdrawal” screen on my phone, then enter the agent# for the bank (Equity Bank is 286286). I then receive a 6 digit transaction code from M-PESA that I must use within 2 hours.

    There’s a soft button on all bank ATM that says “MPESA”…no need to have an ATM bank card. I click that, enter my 6 digit code, plus my mobile # and then choose how much money I want to withdraw from my remaining M-PESA balance.
    As soon as the cash comes out of the ATM, an sms is sent to me about the transaction. Didn’t need a friggin ATM bank card at all!!

    This is truly going to transform East Africa. Vodacom TZ has M-PESA (not as slick as Safaricom’s version in Kenya), AirTel has Zap which is also pretty good. Orange, Tigo and Yu and other mobile players all have mobile money services with agents throughout the region.

    What gives me orgasms about M-PESA & other similar services is that the greedy banks don’t CONTROL anything at all. It’s all done using the mobile network. Equity Bank & Safaricom teamed up to create a mobile bank account called M-KESHO. You don’t ever have to go to a bank but your money is virtual and you can withdraw it from any Equity Bank ATM or use it to pay for goods or services via M-PESA. Lots of poor people (and savvy citizens) are getting M-KESHO accounts further giving the finger to the greedy banks. I LOVE it!!!

    Word on the street is that Safaricom/Vodacom UK is trying to get M-PESA to be seamless so that Kenyans working abroad can send money (they send back about $600 million per year) via their mobile phones. This will literally screw Western Union, MoneyGram and the expensive FOREIGN banks…and I love the thought of that.

    The CCK (Communications Commission of Kenya) is soon going to make it mandatory that all mobile money systems be able to “transact” with each other.

    So, if I’m an Airtel subscriber using their Zap mobile money, I should be able to send money to a mobile # (say Orange Kenya, Safaricom or Yu) without having to be a member of the other network. This is POWERFUL stuff that’s gonna send the greedy banks packing.

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