July 21, 2008
Web developers: which payment gateway do you use for your South African clients?
I’ve posted a topic on the drupal groups site asking people which payment gateways they use for their South African ecommerce clients and have got some great feedback. It would be great if we could all use PayPal – but the taxman won’t allow us to.
I’ve only used Virtual Card Services before – commentators on my post have used NetCash and Setcom.
The issue isn’t just choosing the right payment gateway (and balancing monthly fees with percentages taken per transaction) but also how you access your money. Usually that means setting up a merchant account with a local bank (which means a sorted business plan) and being prepared to pay the monthly fees which go along with that. In addition, the bank will take between 5 and 7% per transaction.
Explaining this to clients is fun! That sadistic side of me enjoys watching their face drop…and then I share their sadness. It would be great to have a PayPal-like payment gateway which has no monthly fees, interfaces directly to any South African bank account, and takes a small percentage (is 3% too much to hope for?!).
Comments(14)
Roger Saner is a web platform developer (using 
Thanks very much for the link back in your interesting article, it’s lovely to see that so many people are still interested in this topic!
Hi Roger,
I noticed your comments above and would like to let your readers know that Setcom does offer a system like PayPal (our Person-to-Person account) where you don’t need a merchant account to get up and running… So, no monthly fees, no merchant account, you will only pay Setcom per transaction. You can also trade in USD with the P2P account. Setcom also offers an alternative to credit card transactions, our new payment system POLi (www.POLi.co.za). POLi also does not require merchant account. This solution does have monthly fees but the beauty of it is – no credit cards – so no chargebacks!
I am happy to answer any questions you have.
Kind regards
Bronwyn
@Bronwyn: I’m impressed that someone from Setcom is monitoring what people are writing – none of the other payments gateway sites have picked this up – so good for you
Setcom has a good reputation and my client is considering using the “no merchant account” option with you. The only reason he doesn’t want to is that he is selling high-volume lost-cost product: maybe R10 per product. With Setcom’s fee structure (4.9% + R4 per transaction), that works out to R4.49 per transaction. Maybe there’s a better way for him to receive money than working this through a payment gateway? Maybe you have some ideas, because I don’t!
Ah, enter POLi. ::reads a bit about it:: Hey, this looks really good. So, I can integrate POLi into my shopping cart (I’m using the ecommerce module on drupal – is there an integration for that?) and when it comes to payment time the client selects POLi as a payment method, gets redirected to their online bank account where they make payment. They’re then redirected back to the initial website which receives a payment confirmation from POLi and then marks the transaction as “paid.” Is that about right?
Question: the “How to use POLi” page says that at one of the steps the client may have to install an activex control. In Internet Explorer. (?) Is POLi Windows-specific? I use Firefox and I use a Mac…
Oh dear, the faq page says that POLi only works on Internet Explorer 6 and later. *sigh* *deep sigh* *deeper sigh* Why develop a technology that excludes almost 40% of web users? Additionally, the people most like to implement POLi and recommend them to clients are your tech geeks. As a web developer I will never recommend a technology choice which targets only certain browsers. It would be really hard to justify a payment option which would *have* to say, “Click here to pay via POLi – but only if you’re using Internet Explorer 6 onwards.” ActiveX is Windows-specific: why don’t you develop the POLi functionality using a javascript library? That way you could include the 40% of the world who don’t use IE.
Next question: how, exactly, does POLi sit between me and my bank account? From the demo login screens, it would seem entirely possible that my login information for my (FNB) bank account would pass through POLi. This is analogous to a man-in-the-middle attack…and if so, I’d have some security concerns about using the system. (Oh wait, this is answered on the FAQ page).
Aside from these questions, I’m excited about POLi – it’s a great idea, within the South African space, to let people do direct bank transfers instead of credit card transactions – it makes sense. I hope that more people start adopting this – but I don’t think that’s going to happen until it’s not browser-specific.
So many questions! Great!
Lets start with fees. We do unfortunately have to have to charge a minimum amount – this because (obviously) we are charged by the banks (and we know that bank fees in SA are not to be sniffed at). Remember that even if your client has their own merchant account, they will still be charged between 3 – 5% per transaction by their bank and they will also have monthly fees… Your client will basically have to calculate how much they expect to process monthly and then work out over the long term which option will be cheaper – with or without their own merchant account. We normally advise our clients to start out using our P2P solution and then if they start processing larger volumes to move over to our Merchant Direct solution with their own merchant account. The only thing that I can recommend on such small amounts is marketing – i.e. “but 4 items and get one free” kind of thing, encourage the buyer to purchase as much as possible to eliminate the R4 per item fee… By the way, did you notice that POLi is also part of the P2P package? If your client processes a POLi transaction on their P2P account they will only pay 3.4% + R4.00 and not 4.9%
With regards to POLi and IE – unfortunately we never developed the product, we have just licensed it in SA. We would love for it to be available on other browsers, and the developers have been making noises about that, but its not something we see happening in the next few months – but hey, they might surprise us! So, as much as we would love to fix that problem we can’t… I can however say we have had very few complaints about that. It seems that most people run more that one browser on their PC’s in case they encounter issues like browser incompatibility.
For POLi integration, there are three options:
1) if the client uses our P2P solution, POLi will be displayed as an additional payment option on the checkout page to South African buyers. No integration is needed from the seller’s side to display POLi as a payment option to his buyers.
2) If the seller goes for a direct POLi implementation on a “CMS” like Drupal, I would suggest they use the POLi Lite Implementation. All that is needed from the seller is to display a “buy button” to the buyer, which when clicked on will direct the buyer to a fully customizable page for the POLi payment. After successful payment, we will redirect the buyer back to the seller’s website, and include the transaction outcome in the response.
3) We also offer the POLi Full Implementation, where the seller is required to integrate POLi fully on his website. This is the most complex and costly implementation in terms of development costs and time. The buyer will remain on the seller’s website throughout the payment process though and will not see the POLi website at all. Large corporate clients prefer this option.
More questions are always welcome!
You might be pleased to know that we (Setcom) will be dropping our fees on the P2P account next week. For ZAR transactions will be 4.9% and R2.50 per transactions. For POLi transactions it will be 2.9% and R2.50.
Wow, that’s amazing Bronwyn! Why did you make that decision?
We took into consideration the amount the smaller guys are paying as a percentage per transaction – this solution is aimed at SME Business so we decided to make it a bit less, and easier for the smaller guys to trade…
Hey, that’s great news Bronwyn – I’ll let my client know
I need to find out if Poli can be linked with Pay Pal and the others, ’cause they still have the credit card snag, which is not common to my clients in South Africa.
Good day Vusi,
Firstly, I want to let you know that Setcom is phasing out POLi and replacing it with a product we have developed in-house, SID (Secure Instant Deposits). SID operates in the same way as POLi in that it enables payments through internet banking. If you are interested in the product you can contact us and we will give you all the details.
To answer you question (and I hope I understand you correctly) I would say yes, SID (POLi ) can be linked up to a payment gateway, or you can run it on its own… However, please note that PayPal is not a viable payment option in South Africa due to the fact that they do not allow you to withdraw your funds to South Africa. Setcom does offer a credit card solution if you are looking for credit card payments, please go have a look at our website.
Hope this helps,
Kind regards
Bronwyn
Thanks, good article. Do you know any other places that discuss this?
Hi Bronwyn, my clients buy my product daily, how are the frequencies of the bay- back to me, is it once a month, real-time as they pay or what? secondly will you be able to handle commission pay-outs to my clients. I know all the features were available with POLI does SID have the same?Ohhh before I forget thank you for your prompt response.
Hi
We are in the process of setting up an ecommerce site for a sa client, and are looking for a payment gateway vendor who supports ZAR and can be integrated into interspire shopping cart. Would appreciate any advice
Thanks
Ed
Fioricet….
Fioricet….