May 14, 2009
Payment gateways for websites in South Africa – a crowdsourcing experiment
I’m currently at the Net Prophet conference listening to some fine minds reaching into the future of the connected sphere in South Africa over the next 10 years. Since so many people here are familiar with e-commerce, I’m posing a question to the dev AND marketing minds here.
I’ve developed a few e-commerce websites for South African clients, and each time I go through the same process with them. To get to the point where it’s possible to sell products online, you need:
- A business plan to show to a bank where you will
- apply for a merchant account.
This means you’re paying something around R200 a month so that you can accept credit card payments…AND per-transaction fees of around 5-8%. Not that you’ve accepted any payments yet, but you have the capability. Then you need a payment gateway, which you’ll typically pay around R100 a month for, and you’ll also pay a per-transaction fee, either a set fee or a percentage.
Once all this is done, it’s time to set up a website with a shopping cart, and start selling. The costs look like this:
- R200/month for the merchant account, plus 5-8% transaction fee.
- R100/month for a payment gateway, plus per-transaction fees.
- Monthly website hosting fees, say around R100/month.
Total monthly costs: R400 plus per-transaction fees.
So before we even get to the website design and development costs, we’re looking at R400/month. Obviously people moving small volumes of product can’t spend R400 a month to do this, which is why most SME’s don’t have e-commerce sites.
A great solution is to have PayPal active in South Africa, but they’re not going to do that any time soon, or probably ever. Since I’m a drupal developer, I posted a thread on groups.drupal.org (which has grown quite a lot) to ask what payment gateways people use, and pretty much heard the same story.
So, 2 questions:
- Is getting a merchant account the only way of accepting credit card payments online, if you’re a South African?
- If so, is there an easier and more cost-effective way of doing this>
Comments(17)
Roger Saner is a web platform developer (using 
Please let me know what the answers are. I’ve been working hard on this as a really small publisher of content, and have been on a two year journey. I’m getting solutions, but in SA they are still pretty clumsy.
I just so happen to be setting up an online retailer at the moment, and I’ve looked everywhere, and from what I can tell, the best option is Setcom.com. There’s no monthly fees, and because they offer a “virtual wallet” solution, you don’t require a merchant account to accept credit cards. They also offer Instant Bank Transfers, which was how I actually found them in the first place.
I’m just waiting on their response as to why the Instant Bank transfer only works in IE. Hopefully their alternate option, SID, does. If that looks good, I’ll be signing up.
Setcom is great, but they’ve built their system to work as an ActiveX control which only works in Internet Explorer. That cuts out Firefox users, all linux users and all Mac users. That’s a big #fail!
I used Setcom for about a year and got so frustrated by their interface. I also found that people were unwilling to use their credit cards on this system because it’s unknown and untrusted – 90% of my traffic comes from the US.
In the end I abandoned them because it just wasn’t working for me.
I’m finding that for the stuff I sell, (books & CDs) it’s much better to get listed with US providers like Amazon.com (this works really well) and use American payment gateways like Clickbank (still testing this one). I’m not sure how this would work for other products, though.
For what it’s worth…
I agree that companies such as Setcom aren’t well known, and therefore customers are put off, however, like in my case, when selling to South Africans your options for a decent payment gateway is limited. Considering the other companies are just as low key: paygate, mygate, vcs even. I don’t see much of a difference.
Me neither – there’s nothing much which differentiates the available options. It’s like choosing the best option among lots of bad options. I wonder if there’s a better way?
Try http://www.netcash.co.za
I think this reduces the
R200/month for the merchant account and
R100/month for a payment gateway
(=R300 per month)
into R120 per month.
There’s obviously still the transaction fees.
There’s also a ZenCart plugin to NetCash for R100 and others here: http://www.joomla-host.co.za/site/index.php?option=com_oscommerce&osMod=index&Itemid=&catID=52_35&cPath=52_35
My intial research lead me to MyGate. Liked their approach, openness & professionalism. I was particularly excited about their Express option which allowed you to use a Netcash merchant account and not have to apply for one yourself. When the time came to flick the switch I contacted thema nd they told me the Express option had had been discontinued as they (and others) were being put under pressure by the banks to not offer this service any longer. I moved on.
I contacted Setcom and was quickly impressed by their service. They have a global footprint and are organised. I didn’t need a merchant account either. Sadly, after creating an account, I got shut down due to a technicality in their T&C which clashed with my business model. They will not involve themselves in third party payments. That is, I can not use them to collect funds for others. I escalated it through the ranks there but it got me nowhere. The trouble with a global concern is that they don’t make their own decisions. There’s a protocal. Pity, because I liked them.
I contacted Payment24, which belongs to some larger behemouth which seems to do a bit of everything. I initial concern was the absence of client support contact numbers. I wanted to have converstaions with people to check we are all happy to work together. Contact forms and auto response reference numbers and responses from different people every time was making me nervous. I eventually got through to someone by dialling their switchboard number and he was very uneasy answering anything. I stopped there.
I’ve now ended up with Netcash who have received mixed reviews, it seems. So far I have been impressed with their can-do approach. We have yet to flick the switch on this one, but no concerns yet.
Tenacity is the name of the game with entrepreneurship, after all
Heya, some people saying for SA, just to have an EFT solution is a way to go for now, but that is not immediate and obviously having everything automated makes it much easier.
I’ve heard good things about MyGate too, but haven’t any experience with any of them.
I’m about to do an ecommerce module for a client, so I’m actually a little nervous. Please let us know if you find out anything more.
Well, I had pretty negative experiences with Setcom…. but that was a few years back, maybe they’ve sorted out their issues.
MyGate is very good, although the need for a merchant account is a pain if you are small. Beyond them, every company we contacted either dropped the ball early on (bad service, no contacts back, etc), or had a structural issue that caused problems for us.
Hope that helps a little! Overall, if you are small there is no “right answer” to this problem at the moment… wish Paypal were in SA!
I’m currently checking out both MyGate, Netcash and AlertPay, my problem is that I’ve decided to work with the WordPress system (after trying both Joomla and Drupal, I like the user friendliness and simplicity of WordPress) and its paid Shopp plugin.
The thing is I have to write the payment processor code for any of the three systems I use.
Anyone have any experience in writing php code for a payment processor and can offer any help?
URGENT URGENT Our airline will launch Feb 2010 Hre-Jnb-Hre B737-500 2 flights a day 111 seats per flight. I need a website with a booking and reservation payment solution to be able to even block a sold seat.
Hi,
I have recently developed a cart using zencart and have been using netcash, they provide a great service, I was told to use a script by customscipts for netcash – what a HUGE mistake, the script did process the credit card payment, yes. The fault with the script was that it did not record the payment or the order in the order page in the admin page, it did not send an email detailing the order to the administrator or the client, so a payment is made without knowledge of the administrator. VERY frustrating.
I contacted the developer and owner of custom scripts, he turned out to be rude and extremely unhelpful. He refused to admit that there could be a problem, refused help without payment and insisted that it was working. I asked him to send me proof that it was working, he never did.
So, for warning to everyone in future, don’t bother wasting your money on custom scripts. You’d be better off without it.
@concerneddev: sorry this didn’t work out for you. Netcash should know better than to recommend a script that doesn’t work 100%, or at least tell you what the limitations of it are.
That said, I can understand why the developer of the script wasn’t going to work on it without payment. He didn’t originally develop it for Netcash – he developed it for himself or a client. I’m pretty sure that the script was provided “in the hope that it will be useful, but without warranty” – meaning that if it doesn’t work, you’re on your own. It’s entirely reasonable that he would fix the script in exchange for payment.
Since you’ve a developer, and have a copy of the script, there’s nothing stopping you from figuring out how to integrate it with zencart. Or switch to drupal and ubercart
Referring to my post on May 14th, 2009 3:55 pm:
Seems like the ZenCart plugin is no longer available on the joomla-host web site.
@concerneddev: I have other people that are complaining about the same problem that you reported (so you are not alone)
ie: it did not record the payment or the order in the order page in the admin page.
It did not send an email detailing the order to the administrator or the client, so a payment is made without knowledge of the administrator (and wasn’t processed as an order in ZenCart!)
I agree – very frustrating.
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