Is Payfast best for online shops?
Updated with ChatGPT’s help!
This article is written primarily for South African citizens, though readers from other countries may find valuable insights as well.
When setting up an e-commerce store, a common question we hear is: “Is Payfast best for online shopping? Which payment gateway should I use? “ The right choice depends on a crucial factor: Will your business focus only on South African customers, or do you plan to sell internationally?
Selling Within South Africa
If your business is geared exclusively toward local customers, Payfast is our top recommendation. Designed by South Africans for South Africans, Payfast offers reliability, security, and a wide array of payment options.
Selling Globally
If you want to cater to an international audience, consider using PayPal or Payfast, depending on how much complexity you are willing to handle, how you wish to access your funds, and the payment flexibility you want to offer your customers.
A Closer Look
Payfast is a homegrown payment gateway that allows merchants to accept payments securely via various methods:
- Credit & cheque cards
- Instant EFT
- ATM debit cards (Visa Electron, Maestro)
- Masterpass and Scode
- Bitcoin (subject to evolving acceptance policies)
- Mobicred (credit facility)
All funds are deposited into your Payfast account in South African Rands (ZAR). While Payfast’s primary market is local, it also accommodates certain international payments without currency conversion complications.
Key Benefits
- Simple setup: Creating an account is quick and free.
- Transaction fees: A percentage (1.9% – 4% depending on the payment type) is charged per transaction, with some including an additional R2 fee. Transfers to your bank account cost R8.70 (excluding VAT).
Payfast is known for its transparency and helpful customer support. You can explore their full Terms and Conditions for more details.
Why Payfast Often Beats PayPal for Global Sales
While PayPal is a highly trusted global payment gateway, it does not support South African Rands (ZAR). This presents several challenges:
- Currency restrictions: Your store’s currency must be set to USD, EUR, or another supported currency.
- Price management: Product prices must be listed in foreign currencies, requiring constant monitoring of exchange rates.
- Currency converters: Plugins can display ZAR prices on your site, but transactions will still be processed in your store’s base currency.
In contrast, Payfast keeps transactions in Rands, simplifying accounting and eliminating foreign exchange complications.
Can You Use Both Payfast and PayPal?
Technically, yes. However, most e-commerce platforms allow only one default currency, making it impractical to use both without creating a confusing experience. Payfast’s comprehensive support for local payments, combined with its growing global reach, makes it a simpler, more seamless solution.
Other Payment Gateway Alternatives in South Africa
Beyond Payfast and PayPal, consider these additional options:
- PayGate: A long-standing provider that supports both local and international payments.
- Peach Payments: Offers a wide range of payment methods, including cards and alternative solutions.
- Yoco: Known for card readers, Yoco also provides online payment tools.
Conclusion
Selecting the right payment gateway hinges on your business model and market reach. For local operations, Payfast is user-friendly, affordable, and perfectly suited to South Africa’s payment landscape. For global ambitions, they offer international versatility but adds complexity due to currency limitations.
Stay tuned for our upcoming guide on simplifying PayPal integration for South African merchants.