Payment Gateways in South Africa: Pricing Breakdown & How to Integrate For E-Commerce
Entrepreneurs turn to global platforms like Shopify and Squarespace for their ease of use, sleek design templates and integrated e-commerce functionality. But very quickly, a technical wall emerges. These platforms are built to work seamlessly with Stripe and Shopify Payments. Both are unavailable to South African merchants.
This creates a friction point at the most critical juncture of the customer journey: checkout.
A payment processor is the tool that allows you to accept money online. It acts as the middle layer between your customer’s card or bank account and your business bank account. Without it, you cannot collect payments in real time. Without real-time payments, you cannot sell at scale.
South African businesses are forced to find alternative solutions. These often require custom integrations, third-party plugins or redirecting customers off-site to complete transactions. Each additional step risks customer abandonment. Each workaround introduces complexity and cost.
The decision of which payment processor to use is not just a technical decision. It’s a financial one. Payment processors charge transaction fees which directly affect your profit margins. These fees typically include a fixed cost per transaction plus a percentage of the sale. While that may seem negligible, over time it compounds.
Example:
If you sell a product for R100 and your payment processor charges 2.5% plus R2.00 per transaction:
- R2.50 + R2.00 = R4.50
- Your net revenue is R95.50
- If your profit margin on the product is R20, you’ve just lost over 22% of your margin to transaction fees alone.
Multiply this by hundreds of transactions and your processor starts to become one of your largest vendors. This is why it’s important to compare the options available and understand both the capabilities and the costs involved.
Need help choosing the right payment gateway? I breakdown 5 powerful processors for South African online businesses.
Overview of Stripe:
Stripe is a widely-used gateway known for its ease of integration and global reach, supporting a wide range of payment methods. It is a global payment processing business which is available in over 46 countries however it has a limited offering within South Africa. Stripe can process payments in ZAR but as a South African business you are not able to create a Stripe account unless you form a US based company with a US bank account.
Stripe is used extensively on content management systems like Squarespace, Shopify and Thinkific which makes it slightly more difficult for South African businesses to accept payments online when using certain platforms.
Stripe offers a service through Stripe Atlas, that that helps entrepreneurs and businesses incorporate a company in the US, open a U.S. bank account, and access Stripe’s payment processing services, all from anywhere in the world. However this comes with legal and tax obligations related to running a business in another country.
Overview of Shopify Payments:
Shopify Payments, the built-in payment processing solution offered by Shopify, is only available in select countries. As of now, South Africa is not one of them. This means South African merchants cannot access the seamless, fee-reducing benefits that come with Shopify Payments which include faster payouts, integrated chargeback management, and the elimination of additional transaction fees.
Instead, South African users must integrate a third-party payment gateway, such as PayFast, Peach Payments, or Paystack. While these platforms are capable and locally supported, their use with Shopify introduces a major financial caveat:
Shopify charges an additional transaction fee (up to 2%) on top of what the third-party payment provider already charges.
Here’s what that means in practice:
Cost breakdown:
Let’s say you sell a product for R1,000 using PayFast as your gateway.
PayFast fee: 3.2% + R2.00 = R34.00
Shopify additional fee (basic plan): 2% of R1,000 = R20.00
Total fees: R54.00
Net revenue: R946.00
That’s 5.4% of your sale gone before accounting for any product, shipping, or ad costs.
This makes Shopify less cost-effective in South Africa compared to WooCommerce or other open-source platforms that do not impose platform fees on third-party processors.
Luckily there are a variety of alternative trusted payment processing providers to choose from in South Africa. Here is a short overview of 8 payment gateways that operate in SA together with applicable fees.
I have summarised all this info into a comprehensive e-book, download it by clicking on the button below.
Many businesses chose a default payment option in a rush to launch and only read the fine print after launch. Its important to consider a payment processor that offers:
- Affordable transaction fees
- Up-to-date compliance procedures
- Scalability options for your business
- Comprehensive and evolving features and integrations
- Efficient service if you have a query, payout or refund to process
- Compatibility with your website builder
- Peace of mind for customers through safe and reliable payment encryptors
- Protection for yourself and your customers with adequate fraud detection systems
1. PayFast
Overview: PayFast is one of the leading payment gateways in South Africa, offering payment processing for online businesses. It supports a range of payment methods, including credit cards, debit cards, EFT (Electronic Funds Transfer) and subscriptions.
Features: Easy integration with various e-commerce platforms, local payment methods, recurring billing, fraud protection, and comprehensive reporting tools. One downfall is that it doesn’t integrate with the Wix platform.
Fees: Credit/Debit Card Fee: 3.2% + R2.00 per successful transaction.
This fee includes a percentage of the total transaction amount (3.5%) and a fixed fee (R2.00) per transaction. The percentage is standard for most e-commerce businesses using credit or debit cards.
No monthly fees
Website: www.payfast.co.za
2. Yoco
Overview: Yoco is a popular payment processing solution in South Africa, primarily known for its point-of-sale (POS) solutions. It provides card machines for businesses to accept payments in-person as well as online payment processing.
Features: No monthly fees, mobile card machines, online payments, integration with e-commerce platforms, and instant payouts.
Fees: In-Person Payments (Card Machine): 2.95% + R2.00 per transaction.
Online Payments (Yoco Gateway): Local: 2.95% per transaction | International is 3.4%
Settlement fee: R2.50
Website: www.yoco.co.za
3. PayU
Overview: PayU is an international payment processor that operates in South Africa. It offers online payment solutions for merchants, supporting local payment methods like credit and debit cards, as well as international methods.
Features: Customisable checkout, multi-currency support, fraud protection, recurring billing, and seamless integration with e-commerce platforms.
Fees: Credit/Debit Card Payments: 3.5% + R2.00 per successful transaction.
Setup Fee: R0 to R2,500 depending on the package and integration complexity.
Website: www.payu.co.za
4. Peach Payments
Overview: Peach Payments is a South African-based payment gateway and online payment processor that provides businesses with tools to accept payments online.
Features: Offers subscription-based services, supports international payments, process is optimised for both mobile and desktop experiences, offers easy integration with various platforms.
Fees: Online Payments with Debit/Credit card: 2.95% per transaction +R1.5 per transaction
No monthly fee or setup fee
Website: www.peachpayments.com
5. Paystack
Overview: Paystack is a leading payment processing company headquartered in Lagos, Nigeria, with operations across Africa. It enables businesses to accept payments online and offline seamlessly. Acquired by Stripe in 2020, Paystack is recognised for its robust technology, user-friendly interface, and focus on accelerating growth for African businesses.
Features:
- Accepts payments via multiple methods, including:
- Credit and debit cards (Visa, Mastercard, and Verve).
- Mobile money.
- Bank transfers.
- USD payments.
- Supports recurring billing and subscription management.
Fees: Local: 2.9% + R1.00 International: 3.1% + R1.00 per transaction
Website: www.paystack.com
6. PayPal
Overview: PayPal is one of the most widely recognised and used online payment platforms in the world. It allows individuals and businesses to send, receive, and manage money over the internet, offering an easy and secure way to make payments online.
Features: PayPal allows users to send and receive money to and from individuals or businesses globally. Users can link their PayPal accounts to their bank accounts, debit/credit cards, or use their PayPal balance to make payments. One downfall is that you cannot accept ZAR currency using PayPal.
Fees:
Receiving Payments for Goods and Services: Domestic Transactions (within South Africa):
PayPal charges 3.4% + a fixed fee based on the currency received.
The fixed fee for South African Rand (ZAR) is typically around R5-6 per transaction.
International Transactions (from outside South Africa):
4.4% + a fixed fee based on the currency received.
The fixed fee is calculated according to the currency of the payment.
Currency Conversion Fees:
PayPal charges a 3-4% fee for currency conversions on top of the exchange rate.
FNB has a partnership with PayPal which allows you to withdraw funds from Paypal to their FNB or other linked South African bank accounts. You don’t have to have an FNb bank account, it simply facilitates the transfer. However you will need a valid tax number or customs client number or importers code for the balance of payment form to be completed for every withdrawal.
FNB charges 1.5% per withdrawal
Website: www.paypal.com
7. Ozow
Overview: Initially focused on instant EFT and now offers payment solutions that make it easy, fast and sage for customers ot pay and merchants to get paid. Popular for cost-conscious businesses and high ticket items. Can be integrated with WooCommerce and custom stores.
Fees: Local: 2.85% and payout fee of R5.00
Website: www.ozow.com
8. Ikhoka
Overview:Ikohkha is fintech company that originated in 2012 and has recently been acquired by Nedbank. It offers a variety of payment solutions for small to medium sized businesses but most notable being the range of card machines it offers. iK Pay Gateway is their online processor service.
Fees: Local: 2.85% | International 3.25%
Settlement fee of R2.50
Website: www.ikhoka.com
Choosing the right payment partner comes down to more than price. Consider the type of products you sell, your average basket size, your refund frequency and your customer’s payment preferences.
A low percentage fee is irrelevant if the platform does not integrate smoothly into your store or if the customer experience is clunky. Similarly, a beautiful checkout page is expensive if it costs you five percent of every sale.
The right gateway depends on your business model and your growth goals. Map out the real costs, test the integrations on your platform and think about scale. Every extra point of friction at checkout increases abandoned carts. Every extra percent of fees eats into your margins.
The fees listed above may be subject to change. Please confirm fees with the payment processor.
If you’re looking to learn more about payment processor integrations, check out my video that compares four major website platforms namely Woocommerce, Wix, Shopify and ECWID. I use seven key criteria to rank each platform and go through the payment processors available on each platform.
