Payfast aims to provide PayPal like services in South Africa

Mergers, Acquisitions and Financial Results

A number of local online merchants have started using Payfast - a PayPal like service making secure online payments possible using Internet banking (EFT). While credit cards are still the main payment method used for online purchases in South Africa, this is starting to change as more people without credit cards go online and gain access to Internet banking.

“Whilst with the implementation of the National Credit Act, credit cards have become more difficult to obtain, services like PayFast are making it easier for online merchants to accept payment via EFT,” said Jonathan Smit, Managing Director of PayFast.

"Using PayFast's EFT solution is safer than using a credit card as there is no risk of charge backs. PayFast's Instant EFT still gives the benefit of immediate fulfilment of purchases for the buyer and, like credit cards, there is no manual bank reconciliation required for the online merchant."

Payfast said that since it launched commercially services in September, there have been over one hundred sellers that have chosen to accept PayFast as a payment method.

"The uptake of PayFast has been encouraging so far with very positive feedback. Many smaller merchants have however also requested a credit card service to complement the EFT solution, which we are currently working on and plan to launch during the course of Q4 2008,” says Smit.

“Whilst credit cards are unlikely to be completely replaced with solutions like PayFast's anytime soon, Instant EFT does provide a viable alternative to online shoppers, especially those that do not have credit cards, whilst at the same time providing a safer and cheaper payment alternative for South Africa's growing number of online merchants,” Smit concluded.