Written by:
Brian Herbert
PayFast is a new startup based in Johannesburg and is a direct competitor with PayPal. Essentially, PayFast is a solution for South Africans to purchase goods online, send and receive money using electric funds transfer (ETF) or a credit card.
One of the major benefits for using PayFast is that a credit card is not required. At least in Kenya, many people do not carry credit cards which makes it difficult to conduct business or purchase products online. If a South African has a bank account, they will be able to hook into this service and initiate transactions with merchants that utilize PayFast.
There are three different types of accounts. With a personal account, the limitations for users are they will not be able to accept credit card payments or set up an ecomerce store. Also, all fees are waived for personal accounts. The next level is a premium account which is like the personal account except users with premium accounts can accept credit card payments (see edit at the end of this post). Finally there is a merchant account which allows users full access to the service. All accounts follow the same fee structure which is anywhere from 1.4-2% of the transaction.
Services like these are important for the growth of the e-commerce sector in Africa. However, there needs to be a broader approach with services allowing users to charge their accounts with methods other than a bank account. I will be examining a service by Safaricom in Kenya which offers another alternative.
Check out PayFast here.
8/31/08/ Edit: Richard Catto of Cape Town News brought to my attention the fact that PayFast has yet to enable credit card processing. This is a critical feature for a system like PayFast so it will be able to adopt new users easily. For instance, when purchasing a product from a website that uses PayPal, you do not need to be a PayPal member if you use your credit card to initiate a transaction. According to the PayFast website, this feature is coming and will be a welcome addition to their service. Even thought accepting credit cards is an important feature to launch with, PayFast is young and has an opportunity to improve on its offerings.
It was announced today that the blog aggregator, Afrigator, is being taken over by MIH Print Africa. Naspers Limited, MIH’s parent company is a multinational media company that has its hands in both traditional as well as new media. Their holdings include websites that target a number of different markets from Brazil to India to South Africa, pay television in South and Sub-Saharan Africa as well as a number of vibrant businesses.
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