First lets clarify what a payment gateway is.
A payment gateway facilitates online payments by securely transmitting transaction data between a merchant’s website or application and the financial institutions involved in the payment process. It acts as an intermediary that securely captures and transfers payment details, such as credit or debit card information, from the customer to the payment processor for authorisation and settlement.
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 from South Africa 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.
Luckily there are a variety of alternative trusted payment processing providers to choose from in South Africa. Here is a short overview of 5 payment gateways that operate in SA together with applicable fees.
- PayFast
- Yoco
- PayU
- Peach Payments
- PayPal
| Payment Gateway | Fees (Ex VAT) |
|---|---|
| PayFast | Credit/Debit Card Fee: 3.2% + R2.00 per successful transaction. |
| Yoco | Online Payments (Yoco Gateway): 2.95% per transaction. |
| PayU | Credit/Debit Card Payments: 3.5% + R2.00 per transaction. |
| Peach Payments | Debit/Credit Card Payments: 2.95% + R1.5 per transaction. |
| PayPal | Domestic Transactions (South Africa): 3.4% + fixed fee. International Transactions: 4.4% + fixed fee. Currency Conversion: 3-4% fee. |
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 even alternative payment methods like Bitcoin.
Features: Easy integration with various e-commerce platforms, local payment methods, recurring billing, fraud protection, and comprehensive reporting tools.
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
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): 2.95% per transaction.
No monthly fees
Website: www.yoco.co.za
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: Customizable 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
Overview: Peach Payments is a South African-based payment gateway and online payment processor that provides businesses with tools to accept payments online. It is designed to help e-commerce merchants, digital businesses, and service providers accept payments through various methods, such as credit and debit cards, instant EFT, and other local and international payment options.
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
Recurring Subscription: 3.5% + R1.5 per transaction
No monthly fee or setup fee
Website: www.peachpayments.com
Overview: PayPal is one of the most widely recognized 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.
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 R3.50 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 (for ZAR, it’s generally R3.50).
Currency Conversion Fees:
PayPal charges a 3-4% fee for currency conversions on top of the exchange rate.
No monthly fee
Website: www.paypal.com
Choosing the right payment gateway requires research. If you are using a content management platform like Woo Commerce and require a certain service like subscriptions, it is important to understand which gateways are supported as not all gateways listed above will integrate seamlessly.
A payment gateway is a vital technology for e-commerce businesses and online merchants. It securely handles payment transactions, facilitates authorization, and helps ensure that funds are transferred correctly between customers and merchants. By offering a variety of payment options and security features, payment gateways play a crucial role in modern online shopping experiences.
The fees listed above may be subject to change. Please confirm fees with the payment processor.
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