gateways
  • Accepting credit card and mobile payments is no longer as costly and complicated as it once was.
  • A slew of agile local and international solutions are challenging those offered by big banks.
  • Small business owners who want to accept card and online payments can expect to pay between 2.2% and 3.5% per transaction.
  • Some options also charge monthly fees, and sliding scales for higher turnover.
  • Here's how leading options currently stack up.
  • For more stories, go to www.BusinessInsider.co.za.


Local card and online payment solutions - particularly for small businesses - have increased and improved significantly in recent years. The days of small businesses relying on big banks and pricey card machines are now largely gone - and in their place are agile startups with apps, hardware, and gateways, that offer fairly competitive rates.

Aside from the direct offerings from big banks, businesses looking to accept credit card payments - either via websites or in-person - now have several options. These are thanks to a selection of startups selling cheap and sleek card machines, those offering Quick Response (QR) solutions for in-person payments, and online-only payment solutions.

These businesses make a lot of their money directly through fees and commissions charged to business owners - usually in the region of 3%, depending on turnover. But many also generate revenue from payment analytics. Businesses that want to learn more about their customers' spending habits can also tap into these features - and modern analytics software, often offered for free with payment processing packages, can help shape business strategies.

Some payment gateways also offer add-ons like shopping carts of varying quality that can also help close sales.

For these reasons, cheapest isn't necessarily best, particularly for growing businesses, and it's worth digging into each company's feature set and tailored offerings to find out if there's a solution that's particularly relevant to your business.

Here's how several of the leading players, excluding options directly from the big banks, stack up:

SnapScan

SnapScan was one of the forerunners in the QR payment revolution in South Africa, and in some regions, it's still the most ubiquitous payment method of its kind.

It's a common in-person payment solution for small businesses like market stalls and coffee shops, thanks in part to integrated features like automatic tip calculation and no need for card processing hardware. 

In recent years, SnapScan has also made moves into online payments with the ability to process online directly without the need to scan a code - though customers will have had to upload their payment details to the SnapScan app to participate.

Standard Bank bought a majority stake in the company in 2016.

Number of merchants: 60,000

Monthly fee: None

Standard commission: 3% (excluding VAT). Decreases to a minimum of 2.6% depending on SnapScan turnover.

Zapper

Zapper is another scan-to-pay option that started with a primary focus on app-based QR code processing. It's expanded to include online payments and has a presence in multiple countries. 

Like SnapScan it gained initial popularity among small businesses that could accept card-based payments without the need for expensive hardware.

Zapper has partnered with Mastercard's digital wallet MasterPass, which drastically increased the app's reach - it's now accepted at over 70,000 Masterpass-enabled merchants.

Number of merchants: Unclear

Monthly fee: Free / R199

Standard commission: 2.9% (excluding VAT) on free account / 2.2% excluding VAT on paid account

Yoco

Yoco started as a way for small businesses in South Africa to accept physical card payments. It was founded on the principle that small businesses like restaurants, coffee shops, and market stall owners shouldn't have to invest in expensive hardware and exclusive agreements with big banks. It has since expanded into accepting online payments.

Yoco currently sells its entry-level card processing machine for a flat rate of R299, and a more advanced system for R999, both of which accept payments from most leading banks.

Number of merchants: 130,000

Monthly fee: None

Standard commission (card machines): 2.95% (excluding VAT). Decreases to a minimum of 2.6% (excluding VAT) depending on turnover - with custom rates for amounts higher than R100,000 per month.

Standard commission (online payments): 2.95% (excluding VAT). Decreases to a minimum of 2.6% (excluding VAT) depending on turnover - with custom rates for amounts higher than R100,000 per month.

Paystack

Paystack is a Nigerian-based fintech company that recently entered the South Africa payment gateway market. The company processes online and offline card and electronic funds transfer payments. Paystack currently processes payments in South Africa made via cards – including Visa, Mastercard, American Express – EFT and Masterpass, and it's planning to integrate PayPal and Snapscan in due course.

Number of merchants: 60,000 across 40 countries

Monthly fee: None

Standard commission: 2.9% (including VAT) + R1 (local and international transactions)

PayFast

PayFast focuses primarily on streamlining the online payment processes for businesses within South Africa. The company will securely process seven different payment options, including credit and cheque cards, instant EFTs, Masterpass, SnapScan, and Zapper. 

How much the merchant pays depends on which payment type the customer chooses at checkout, with fees ranging from 2% for EFT processing, up to 4.5% plus R5 for Scode payments.

Number of merchants: Unclear

Monthly fee: None. Per payout fee of R8.70 (excluding VAT).

Standard commission: 3.5% plus R 2.00 (SnapScan, Zapper, credit, cheque, and debit card)

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