Google vs e-Bay – the SA chapter

This is according to World Wide Worx CEO Arthur Goldstuck, whose company has conducted research into the South African e-commerce market.

PayPal is owned by auction site e-Bay and is restrictive to South African consumers wanting to transact online with international merchants.

Goldstuck says it is still quite complex for small players in the South African e-commerce environment to roll-out payment solutions, so an alterative to PayPal offered by a big player like Google could increase the prevalence of merchants in the SA online space.

Although PayPal does enable South Africans to open an account and send money, for example to make a payment to a vendor if they also have a PayPal account, South African account holders cannot use its full functionality. Goldstuck says PayPal views South Africa as a high-risk environment along with much of the rest of the continent. This is despite the country’s advanced banking system. Given its recent move to establish a specifically South African site, Google clearly knows South Africa is on the map and is familiar with the environment here, says Goldstuck.

He says although there are alternatives to PayPal, it has become such a big brand that it is almost perceived by consumers as the only solution. The introduction of an alternative by another giant would be “great” as this “would force PayPal to become more competitive and not rest on its laurels as it has been doing,” says Goldstuck.

Rudolph Muller, the founder of local broadband activism site www.myadsl.co.za says PayPal is not South Africa friendly, as one must have an overseas account to utilise its functionality. If Google does launch its own payment system, this is likely to be South Africa-friendly given its recognition that the country is a respectable financial destination. Muller says this would have a significant impact on South African consumers, as they would be able to buy online from sites that previously only accepted PayPal. His readers are clearly irritated by PayPal not fully supporting South African consumers, as seen in their complaints on the site’s forum.

The Wall Street Journal reported on the possibility that Google could launch a PayPal equivalent late on Friday, but the company itself has yet to confirm this. The news followed an Internet conference the previous day hosted by US securities firm Piper Jaffray, where Google’s plans were debated. Since then, the news has been widely reported on by the international media.

Even the blogging community – web users that keep online journals – is pleased. According to www.blogherald.com , PayPal has long been the payment method of choice for smaller bloggers that sell advertising on their sites. But, a new player in the space could have “ground breaking” consequences, “as an electronic currency exchange underpinning the vast majority of transactions and transferable into multiple currencies would go a long way in providing a more level playing field…” the Blog Herald reported.