Credit Card Processing in South Africa

By Greg Phillips (Software creation partner - Entrepreneur.co.za)

I have been asked numerous times in the recent past about payment gateways that South African companies can use, and which ones are the best to go with. So in this monthly, I'm going to give you a brief breakdown of the payment processing landscape in South Africa.

Whilst preparing this column, I decided I would do a search of as many credit card processing companies in South Africa as I could find within a 45-minute period, the idea being that if I could not find them within this timeframe, they shouldn’t be on this list.

The cost of each company’s service was determined using the following criteria:

1. Setup fee;

2. If a service is available to perform the transaction without the service provider being shown to the consumer, then this option would be selected;

3. Transact R500 to determine the transaction fee;

The list is ordered from cheapest to most expensive. (Inclusive of VAT.)

* Click on company name to go to their website

Note: The cost breakdown above is intended to indicate costs for using the company’s service to set up e-commerce transactions on a website, and have the transactions processed ‘behind the scenes’ (meaning customers don’t see the processing company in question).

My recommendations
Based on the above results, your best bet would seem to be Virtual Card Services, though I have reservations in recommending them in all circumstances.

In the list you will see Setcom at the bottom of the pile, which is unfortunate as it seems to be the only service that allows you to conduct transactions in multiple currencies, and also has similar features to Paypal where you can transact between two people (not necessarily a company and a consumer) or between two companies.

When making a selection like this, which company you choose will depend on what you need to achieve. If you are going to perform credit card transactions mainly in South Africa, I would recommend Entellipay, Paygate or Virtual Card Services. If you are going to be doing a lot of very small transactions, I would recommend VCS. If you need to transact in multiple currencies from consumers across the globe, I would recommend you swallow the more expensive pill in the form of Setcom’s offering.

As I mentioned, I gave myself 45 minutes to find these companies, so if I have missed some good payment gateways that you know of, please let me know by clicking here to go to the forums, or by emailing me at greg@flock.co.za.

Hope this helps when selecting your payment portal.

All the best, and have a great October!
 

dd