27 Sep Information for Multinational eCommerce Companies Entering The South African Market and in Need of Online Payments

South Africa is an anomaly when it comes to online payments.  It is a little more like the UK and Europe when it comes to doing business, so communication is easier, and the payments market runs along similar lines.

Having said that, South Africa, when it comes to online payments, multinational eCommerce companies entering the market need to bear in mind that South Africa has a Gini coefficient of 0.63 which ranks it as one of the highest income inequality countries in the world.  So you have a relatively well educated and well off part of the population, most of whom have a credit card and high propensity towards consumer spending, and then a large percentage of the population who do not have cost effective internet access and disposable income and are more likely to operate with cash, savings accounts or if lucky a debit card and are not yet a significant part of the South African online retail consumer market. 

Most South Africans have a smartphone and access to the internet but the cost of internet access is very high compared to the rest of the world.  The more affluent South Africans have wifi at home and work and the less affluent mostly don’t.

For eCommerce companies entering the South Africa market, the best payment methods to kick off with for online payment are debit and credit card acquiring and perhaps SID automated EFT.  Mobile money is not common in South Africa like the rest of Africa.

When it comes to online payment and repatriation of funds to a merchant outside the country, merchants need to be aware of SARB (South African Reserve Bank) restrictions regarding repatriation of funds.  In order to move money out of South Africa, a mandate is required and all transactions need to be reported in to SARB. In most cases, a local legal entity is required.

If you are looking for a payment provider and want us to make it easier for you to expand to South Africa for your acquiring, please click here to contact us now.  Thank you.