Global payments company PayPal has partnered with South African payments service PayGate to broaden payment options for online shoppers.
According to the two companies, the partnership will open up global sales opportunities for local e-commerce merchants, which can now offer PayPal as a payment method without merchants having to open up a new bank account.
PayGate GM of business development Brendon Williamson said that PayPal is a “standout favourite” for overseas customers wanting to buy goods from South African merchants.
According to PayPal head of business development for sub-Saharan Africa, Malvina Goldfeld, having PayPal as a payment option could draw international buyers to local sites, being a trusted and secure payment brand.
“Rightly or wrongly, someone from the US or Europe may not feel comfortable giving their credit card details to a site based in South Africa. But with PayPal, that psychological barrier is removed,” Williamson said.
While PayPal’s services are generally available in South Africa, the rand is not supported by the service, which makes transacting through the platform relatively expensive for merchants, with transaction and ZAR/USD conversion costs eating into margins.
Conversion fees of up to 2.5% are applied above the prevailing exchange rate. For merchants, this is on top of the 2.4% to 3.9% + $0.30 fee (which can reach far higher, according to user reports) charged per transaction.
PayPal recently announced that it had signed up 1 million accounts in South Africa, with merchants such as Mr. Price, Netflorist and Singita signed up to its services.