The best payment gateway for South African e-commerce in 2024

Online retail in South Africa more than doubled in the last two years, thanks to the explosion in demand for home deliveries brought about by the pandemic.

Without payment gateway, online shopping would be impossible.

Payment gateways allow your business to accept credit and debit card payments from customers. Every time a customer proceeds to checkout, a request for funds is sent to their bank to conclude the purchase.

Once the payment has been completed, the payment gateway notifies your e-commerce platform so you can deliver the product to your customer.

80% of online transactions in South Africa are made with credit and debit cards, and the rest through ETF transactions.

Your e-commerce website should accept at least cards and ETF transfers. The other important aspects of a payment gateway are it's costs, security and possible integration with different e-commerce platforms.

Experts' pick: PayFast

We asked some of Procompare's e-commerce website providers which payment gateway is the best. Their answers are almost identical.

Yuri Shatalov, Aimweb: "We recommend PayFast because it offers a zero monthly fee option and only takes percentages for transactions. It supports credit card, instant EFT and SnapScan purchases. You can integrate it with most e-commerce plugins (WooCommerce, Magento, Shopify etc.)."

Eric Nkosing'phile Mashiyane, Ngqo Marketing: "I prefer and recommend PayFast for my clients. It is easy to integrate and has easy integration steps. The support is amazing and security is never compromised. I have built apps and e-commerce sites for over 8 years and have been using them for around 7 years now. They are the best in South Africa."

PayFast is quick and easy to set up; the account can be active within a day.

Graham de Klerk, Open for Business: "If selling only in South Africa, I recommend PayFast. They offer a wide variety of payment options. It’s also quick and easy to set up; the account can be active within a day. PayFast also offers support for a lot of ecommerce add-on plugins which are mostly free."

Andre Duvenhage, Digital Watermelon Consulting: "We usually recommend PayFast because it’s easy for a customer to sign up, easy to integrate with, and their fees are also not too high."

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PayGate

PayGate, a division of DPO, offers a fully managed solution for accepting payments online. It prides itself on giving its clients a premier service free of administrative hassles.

PayGate is PCI DSS Level 1 compliant and is one of the most reliable and robust payment gateways available to South African businesses. It works with over 100 000 different merchants across 19 countries. Takealot, Superbalist, DHL, and Uber use PayGate as their payment processor.

Pros: Setting up PayGate is super simple, and they even work with your bank to streamline the process.

Costs: Its services are R99 a month (ex VAT). And transaction fees are 3.5% on all successful card payments and 1.5% on Instant EFT payments.

Payfast

PayFast, which was acquired by DPO, is one of the most popular payment gateways in SouthAfrica. It comes with an extensive set of features, excellent support, and a level of flexibility that would make a comprehensive solution for any South African business.

Companies like CellC, Hollywood Bets, Crocs, and many others rely on PayFast to process their payments.

Pros: PayFast easily integrates into 80+ ecommerce platforms and allows merchants to offer up to 7 different payment methods to their customers. You can use it PayFast with Shopify, WooCommerce, Magento, and many other platforms.

Costs: PayFast is free to use, and businesses only get charged transaction fees. The lowest charge is a 2% fee on Instant EFTs, and the most a company might ever have to pay is 4.5% plus an additional R5 when customers pay using SCode.

Yoco

Yoco is a payment gateway that allows its clients to process both online and in-person sales. Their goal is to make the hassle of processing payments a thing of the past.

They’ve made it possible for even the smallest of South African businesses to leap into proper business banking. Currently, over 150 000 business operations use Yoco as a payment gateway.

Pros: Setting up your Yoco account is so simple they claim it’ll take less than 5 minutes. At the moment, Yoco can integrate with WordPress, WooCommerce, Wix, and Shopstar.

Costs: There is no monthly subscription fee for Yoco’s services, but clients are charged transaction fees on a sliding scale, up to R100 000 in monthly sales. Below R20k in sales, clients pay 3.4%, and that number goes as low as a 3.05% fee at just under R100k in sales. At over R100k in monthly sales, clients can negotiate custom rates and enjoy additional benefits.

PayU

PayU is an active investor in the development of fintech solutions all around the world. Currently, it services over 50 different markets, one of them being South Africa.

PayU processes over 6 million transactions daily. They offer customers that do not have access to traditional credit options a way to participate in the market while shielding merchants from risk.

Retail giant, The Foschini group uses PayU to offer their customers the best experience when shopping online.

Pros: PayU offers its clients multiple solutions, including 1-click payments, subscription payments, and instant EFT payments. And the clients enjoy the peace of mind of having top-end fraud prevention systems protect their operations.

Costs: They charge a transaction fee of 2% + VAT on every transaction for all modes of payments.

Payflex

PayFlex is fast becoming the go-to payment gateway for South African businesses looking to attract a younger customer base that is increasingly credit-savvy.

Both customers and merchants like PayFlex as a gateway because of its buy now pay later system. This system allows merchants to make more sales by giving customers the option to buy the products they want on interest-free credit. They claim that merchants see up to 30% increase in sales, up to 80% jump in repurchases, and a rise in order value up tot 70%.

Pros: PayFlex easily integrates with 3 (WooCommerce,Magent, Shopify) of the top 6 ecommerce platforms South African would most likely use.

Costs: There are no upfront charges for PayFlex’s services. Clients pay transaction fees which the partnership managers discuss on a one-on-one basis.

Ozow

Ozow is is the gateway solution focused on ETF transactions. In use for companies like Betway, Vodacom, MrD, DStv, Zando, and Hirsch’s.

Pros: Ozow is the preferred payment gateway for many businesses because of its ability to process payments in real-time. Once made, confirmed payments are irrevocable. That means merchants don’t have to put up with fraudulent chargebacks and payment reversals. Lastly, merchants can link multiple bank accounts to a single Ozow merchant account and dashboard.

Businesses can integrate it with BigCommerce, Magento, Shopify and many other e-commerce platforms as well.

Costs: There are no subscription fees, only monthly transaction fees starting at 2,5% for automated EFTs under R500 000. The transaction fees drop to 1,5% as the processed amount increases.

Peach Payments

Peach Payments is a South African payment gateway focused on larger businesses. It is PCI DSS level 1 compliant and offers integrations with the top ecommerce platforms (WooCommerce, Magento, Shopify, Wix,).

Pros: Peach Payments gateway allows clients to process payments with all major credit cards, including Visa, Mastercard, Diners Club and American Express. Businesses can also collect PayPal, MasterPass, Mobicred, and via Instant EFT payments. At the top of the Peach Payments' feature list are the abilities to process recurring payments and 1-click checkout capabilities.

Costs: Transaction fee is 2.95% + R1.50 per transaction for cards. EFT payments at 1.5% + R1.50 per transaction. There is no setup fee or monthly fee. They offer an enterprise package of R500 for larger business hat transact more than R300,000 per month.

iKhokha

iKhokha is a local fintech startup that offers merchants a device for low-cost mobile payments solution. The device belongs to the merchant, not to the bank. All payments are 3D secure and PCI compliant.

Pros: For now it's e-coomerce payment gateway is only available on WooCommerce platform. It accepts Visa and Mastercard credit and debit cards.

Costs: iKhokha's standard transaction rate starts at 2.85% (excluding VAT) per transaction. The more a merchant transacts, the lower the rate.