Online shopping hit the mainstream in South Africa during 2014, says e-commerce payment services provider PayGate and the growth is set to continue during 2015.
“The number of merchants we serve doubled this year, and the vast majority of those are new entrants to the market,” says PayGate CEO Peter Harvey. “We’ve also seen significant growth in the number of transactions. Considering the weakness of the SA economy and of the rand, that’s an extremely positive development.”
Harvey says a number of factors have contributed to this growth, including the launch of new mobile payment methods. “During this year we’ve added Zapper and MasterPass as mobile payment options for our merchants, and we’re seeing a lot of traffic coming from mobiles.”
At the same time, he says, “the big banks and retailers are now really pushing their e-commerce offerings. It has become much easier, more convenient and more secure for ordinary South Africans to buy goods and services online. Anecdotally, we’ve noticed that the number of packages being delivered to our own offices has gone through the roof this year.”
It has also become easier for new retailers to get online, adds Harvey. “It’s definitely cheaper to start an online store than a brick-and-mortar store – there is no insurance, no warehousing costs, lower electricity costs, lower rent. And everyone is now recognising the value of the smaller merchants and making it easier for them to get online.”
PayGate itself has launched a new service, Payment Collection Service (PCS), aimed directly at small and startup merchants. “Navigating the banking system has been a barrier to entry for a long time,” says Harvey. “PCS aims to get new online retailers into the system quickly and easily – they can literally activate an account and start trading overnight. There’s also a clear path for them to migrate to more sophisticated payment services with different fee structures as their business grows.”
PayGate has expanded its business in other ways, says Harvey, cementing significant new European relationships, establishing a UK data centre and expanding its footprint in Kenya, Nigeria and Rwanda. “Africa is now top of the list for new global product launches,” he says; “there is a massive generation hungry for new products and new ways of doing things. There is enormous demand for safe, efficient e-commerce and consumers are going to continue to drive change.”