If you’re an entrepreneur ready to launch your small business online, it’s important to have the ability to receive payments directly through your website. In South Africa, when it comes to online payments, we’re fortunate to have several popular payment methods that consumers are actively using and trust to make payments online.
According to Statista, at the start of 2020, the most common payment methods of online shoppers in South Africa were:
- Credit card
- Bank transfers or EFT
- E-wallet
Payfast Black Friday data from 2021 shows that this trend has persisted with credit card payments leading the way. Our data also show that since 2020 there has been a notable increase in QR code or scan-to-pay payments, such as SnapScan, Zapper and other payment apps powered by Ukheshe Scan to Pay (formerly Masterpass) that are connected to digital or e-wallets.
Accepting credit card payments for small business
To cater to a broad online consumer base, it’s important to at the very least offer Visa and Mastercard credit card payment options, which are the most popular credit cards in South Africa. A significant percentage of South Africans have bank accounts, with a linked credit, cheque or debit cards that they are comfortable using to make payments within physical retail stores and on ecommerce websites.
By taking credit card payments on your online store, you’ll be able to prevent cart abandonment because online shoppers will be more likely to complete their transactions using an easy-to-use payment method that they are accustomed to using on a regular basis. All they need to do is enter their card details at checkout, verify the payment and voila, they’ve completed their purchase on your online store.
Popular online payment methods for small businesses in South Africa
While your online store will do well by offering the credit card payment option, the reality is that the more payment methods you offer, the more you’ll cater to each individual online shopper’s preference of how they would like to pay you.
Importance of online payment methods for small businesses
Small businesses play a vital role in the South African economy, and their success largely depends on the ability to reach customers beyond physical store locations. By incorporating online payment methods, these businesses can tap into a larger customer base, expand their reach and drive more sales. Online payment methods also offer convenience to customers, enabling them to make purchases anytime and anywhere, further boosting sales for small businesses.
Accepting Instant EFT payments
Instant EFT is a convenient payment method because shoppers don’t have to find their credit card in their wallet, purse, or handbag and copy the card’s information every time they want to shop online. If Instant EFT is enabled on your online store, all they need to do after selecting it is log into their banking profile and approve the payment on their mobile device.
Accepting QR code payments
Contactless payments through payment apps like SnapScan and Zapper grew in immense popularity during the COVID-19 pandemic. By loading their preferred payment app on their smartphone, online shoppers can quickly scan a payment QR code at checkout on your online store and approve the payment via their banking app. Scan to pay is as simple as it sounds.
Mobile Wallets
Mobile wallets have gained significant popularity in South Africa, providing a convenient way for customers to make payments using their smartphones. Services like VodaPay, SnapScan and FNB eWallet allow users to link their bank accounts or cards to their mobile wallets, making transactions quick and hassle-free. Small businesses can benefit from accepting payments through mobile wallets, as it caters to the growing number of smartphone users in South Africa.
Digital Wallets
Digital wallets, such as PayPal and Skrill, allow businesses to receive payments from customers globally. These wallets offer secure online transactions and are especially useful for businesses involved in cross-border trade. Integrating digital wallets into the payment process can expand a small business’s customer base beyond South Africa’s borders.
Factors to consider when choosing an online payment method
When selecting an online payment method for a small business, several factors should be taken into account to ensure a seamless and secure transaction experience for both the business and its customers.
Security
Security should be a top priority when choosing an online payment method. Look for payment providers that offer robust security features such as encryption, fraud detection and tokenization to protect sensitive customer data.
Transaction fees
Consider the transaction fees associated with each payment method. Some payment providers charge a percentage of each transaction, while others may have a flat fee structure. Evaluate the costs and choose a payment method that aligns with the business’s budget.
Integration and compatibility
Ensure that the chosen payment method integrates seamlessly with the business’s website or ecommerce platform. Compatibility with popular shopping cart software, content management systems and other relevant tools is crucial for a smooth payment process.
Customer experience
Consider the user experience of the payment method from the customer’s perspective. A streamlined and intuitive checkout process can minimise cart abandonment and improve customer satisfaction.
Setting up online payment methods for small businesses
Implementing online payment methods for a small business involves a series of steps to ensure a secure and user-friendly payment experience.
Registering with a payment service provider
Small businesses need to register with a payment service provider (PSP) that offers the desired payment methods. PSPs handle the technical aspects of payment processing, including security, transaction management and customer support.
Setting up a payment gateway
For online transactions, businesses must set up a payment gateway that enables the secure transfer of customer payment information. The payment gateway ensures that the transaction details are encrypted and transmitted safely.
Creating a seamless checkout process
Design a user-friendly and intuitive checkout process on the business’s website or ecommerce platform. Minimise the number of steps required to complete a purchase and provide clear instructions for customers.
Ensuring data protection and compliance
Comply with data protection regulations, such as the Protection of Personal Information Act (POPIA) in South Africa. Implement necessary measures to safeguard customer data and ensure compliance with relevant industry standards.
Benefits of offering online payment methods for small businesses
Implementing online payment methods can yield several benefits for small businesses.
Increased sales and revenue
By offering convenient and secure online payment options, businesses can attract more customers and increase sales. The ability to accept payments 24/7, from anywhere, expands the business’s reach and potential customer base.
Improved customer satisfaction
Online payment methods provide a hassle-free experience for customers, enhancing their satisfaction. Easy checkout processes and diverse payment options contribute to a positive customer experience, increasing the likelihood of repeat purchases and positive reviews.
Business credibility
Accepting online payments establishes a sense of professionalism and credibility for small businesses. Customers perceive businesses that offer secure online transactions as trustworthy, which can lead to increased customer loyalty and brand reputation.
What makes Payfast the best payment processor for small business
Payfast is a leading online payment gateway that enables businesses of all sizes in South Africa to get paid online. When you sign up for a free Payfast account online, you can easily integrate the online payment portal with your website or online store, whether it’s hosted on Shopify, WooCommerce (a popular ecommerce plugin for WordPress websites), a custom-built website or any of the 80+ shopping cart platforms we support.
Once set up, small businesses can easily accept credit card payments from almost anywhere in the world; not to mention Instant EFT payments, QR code payments like SnapScan and Zapper, as well as a variety of other popular payment methods from across South Africa.
See how PayFast helps businesses with values like those of www.capemasai.co.za to do better business, every day.
Start using Payfast today
Our online registration process makes it easy for you to sign up for an Individual, Business or Cause account. There are no monthly or hidden fees, and with us, you don’t even need a merchant bank account to start getting paid.
Sign up now or contact us for more information on how Payfast can help grow your small business online.