Updated payment processing for South African e-commerce websites

E-commerce payment gateways

Online stores are cropping up all over the place and it has become increasingly easy to buy almost anything online. This means that the online payments sector has grown tremendously with new payment providers launching every year. Our previous review of South African payment gateways has therefore become a bit dated and in need of a refresh.

If you run an e-commerce website or online service and want to accept payments online, you need an account with an online payment gateway. They will take the payment details, verify it with the credit card company, and then process the payment. The money sits in your account with the payment gateway and you can then transfer it out to your bank account whenever you want.

If you already accept credit card payments in your physical store, the application process is easier since you already have a credit card merchant account. You now need to apply for an online merchant account. It is best to do this with the payment gateway that your bank uses (which means less paperwork) but you can generally use any other payment gateway.

How online payments work

These are typically the different services that the payment gateway will offer:

  • Option 1: When the user is ready to check out they get redirected to the payment gateway site to enter their credit card details. The site processes the payment and sends the user back to your website together with a message on whether the transaction was approved or not. No credit card details are stored on your website’s database.
  • Option 2: When the user is ready to check out they pay directly on your website. In the background you store their credit card details and query the payment gateway. The payment gateway then sends a response accepting or rejecting the payment. Then your site finishes off the transaction. All processing therefore happens on your site and there is no re-direct to another site.
  • Option 3: When the user is ready to check out they pay on your website by doing an electronic funds transfer (EFT). The payment gateway interacts with the user’s bank to process the payment. The bank approves or rejects the transaction and the user gets returned to your site to finish off the transaction.
  • Option 4: The user can elect to pay using various virtual currencies that the payment gateway supports. The payment gateway interacts with the company that issues that virtual currency and then approves or rejects the payment based on the information your company provides regarding the user’s account and available currency.

We generally do not advise our clients to capture or store any credit cards on their sites. This is too much of a security risk. Most of the time, we elect to skip option 2 except for when being used for very large e-commerce stores.

All payment gateways will accept credit cards or MasterCard and Visa cheque cards. Debit cards (which require a PIN number when transacting) are generally not as well supported. However, a debit card is generally linked to a bank account and therefore debit card users can be offered the option of doing an EFT payment if the chosen payment gateway does not support debit cards.

Payment processing gateways

Here’s our list of recommended payment gateways to use. We’ve worked with all of these gateways on our various projects over the years and we consider all them reliable and reputable gateways.


PayPal is the world’s most well-recognised online payment provider. Having a Paypal payment option on your site re-assures international users that they are dealing with a legit, established company. When FNB originally brought the PayPal service to South Africa, it used to require having an FNB bank account to use the service. However, that requirement no longer stands and you can link any bank account you have with your PayPal business account via a process that FNB has set up.

The major downside to PayPal is that they do not support the Rand as a payment currency. That means that your Rand prices will get converted to dollars (or some of the other supported PayPal currencies) and your users will make payment in a foreign currency. This is fine when targeting international users but not so great for South African users. Also, the PayPal Payments Pro solution which allows payment to happen on your site (so, no redirect needed) is not available to South African PayPal merchants.

Service to sign up for: PayPal offers the full range of payment processing services from simple “Buy Now” buttons to complex recurring payments. Sign up for PayPal Payments Standard for simple payments with a redirect. Or sign up for Express Checkout if you are already accepting credit cards using your existing merchant account and want to add PayPal as another payment option for those who have PayPal accounts.

Fees: PayPal charges 2.4% to 3.4% + $0.30 per transaction. There is also a PayPal currency conversion fee of 1.5%. FNB charges 1.5% each time you withdraw money from your PayPal account into your bank account.


Service to sign up for: Sign up for PayWeb (for simple once-off payments with a redirect) or PayXML (for more complex payments and no re-direct)

Fees: Fees only upon requesting a quote.

Additional info: You are required to have an account at either ABSA, First National Bank, Standard Bank or NedBank to qualify for PayGate’s services.


Service to sign up for: Sign up for iVeri Lite (for simple once-off payments with a redirect) or iVeri Enterprise (for more complex payments or no-redirect)

Fees: Fees only upon requesting a quote.

VCS (Virtual Card Services)https://www.vcs.co.za

Service to sign up for: Sign up for Virtual Online (for simple once-off payments with a redirect) or Virtual Vendor (for more complex payments or no-redirect)

Fees: R1 plus 0.5% of the value of each transaction and a minimum monthly payment of R145.00.

Sage Netcashhttp://www.netcash.co.za

Service to sign up for: Sage Netcash Credit Card Gateway

Fees: R190 per month. R1.10 plus 3.5% to 5% of the value of each transaction.

Additional info: Netcash is a super merchant so there is no need for a merchant account. They will process your transactions via their own merchant account.


Service to sign up for: Sign up for Website Payments. Setcom’s EFT payment service SID (Secure Instant Payment) has been integrated into many of the other payment provider’s services. You can also sign up for SID directly: http://www.sidpayment.com/

Fees: R250.00 setup + R250.00 monthly. 0.65% charged per transaction.

Additional info: You can make use of your own merchant account so that funds are deposited directly or you can use Setcom’s merchant account.


Service to sign up for: MonsterPay

Fees: R2.00 + 4.5% for every transaction.

Additional info: MonsterPay is a super merchant so there is no need for a merchant account. They will process your transactions via their merchant account. MonsterPay is also owned by Setcom.


Service to sign up for: Business account or Premier account

Fees: Instant EFT: 2.0% of the transfer. 4.9% for credit card transactions.

Additional info: PayFast is one of the only local payment processing companies to integrate with Shopify, the hosted e-commerce platform. This is one of the easiest ways to get your store up and running. Also, if the volume of transactions exceed a certain amount per month a discount is given and charities also receive reduced fees.


Service to sign up for: PayU Easy Merchant (if you don’t have a merchant account), PayU Business (for simple once-off payments with a redirect) or PayU Enterprise (for more complex payments or no-redirect)

Fees: These will depend on the product you choose.

Over the years we’ve built many e-commerce systems and integrated all of the major South African and international payment gateways. We are also a PayPal certified developer. We understand payment processing and can help you integrate with any payment gateway. Contact us to discuss your payment processing requirements.