Payment gateways in South Africa (2024) | Complete A – Z guide

Unpacking payment gateways for your business (2024) | Complete A – Z guide 

These days, more moving parts are involved in running a successful online business than ever. If not approached correctly, some can become an unnecessary challenge for your business, especially when it comes to accepting payments. Here’s a definitive guide on how to make payment gateways your friend, not your foe. 

Gone are the days when cash was king. Going cashless is the way forward. Ensuring your customers have flexible, secure, and user-friendly payment options is critical to keep your business competitive. 

This is where payment gateways come in.   

But where do you begin? Which one do you choose? Do you choose just one? Are there downsides to using them? Does having one make such a significant impact on your sales?   

There might be a million questions around payment gateways, but you’re in the right place to find all the answers you need. Welcome to your A – Z payment gateway guide.  

Read Next: Everything you need to know about digital payment services in South Africa. 

Understanding payment gateways and how they work 

Before diving head first into which payment gateways are available and, even more important, which ones are worth your time, you’ll need to understand the basics.   

Although not the most complicated cog in the machine, payment gateways have a few key components you should be aware of. Here’s a quick rundown of the foundation of payment gateways. 

Payment gateways and payment processors? What’s the difference? 

By now, you’ve seen two terms referenced quite a bit, payment gateways and payment processors, but what makes them different? These are two distinct components of successful transactions, essentially working together but performing separate actions. 

• Payment gateway – The payment gateway collects customer information related to a purchase, secures those details, and sends them to the processor.

• Payment processor – A payment processor receives sensitive customer information and then uses those details to contact the customer’s bank and the merchant account, debiting one and crediting the other. 

What is a merchant account? 

Although it might seem like a lesser aspect of successfully integrating a payment gateway into your ecommerce store, there’s more to a merchant account than you may think. The first thing to know is that a payment gateway and merchant account are not the same thing, and you need both to take payments online.  

Consider a merchant account as a unique type of bank account that your business will use to accept credit or debit card payments from your customers. Whenever your store receives compensation from customers, these funds are held in this account temporarily before being deposited into your bank account. 

Primary types of payment gateways 

Generally, there are three types of payment gateways:  

• On-site – Typically, large-scale businesses will use on-site payments handled on their own servers. The entire checkout experience and payment processing are all conducted through an in-house system, making dealing with large amounts more manageable.

• On-site and off-site combined – Using this method, the front-end checkout will happen on your site, while the payment processing occurs through the gateway’s back end. While this does offer increased security, it does take away some of your control over your customer’s journey.

• Redirect – A redirect payment gateway usually provides various payment methods through a third-party site. Customers are redirected to a second site to complete their purchase, and while this does simplify things for the merchant, it does add a step to your customer journey. 

Choosing the best payment gateway 

There’s no getting around it: deciding which payment gateway to use can be difficult, considering how many options there are. No two eCommerce businesses are alike, but here are some considerations that you can use to help you pick your ideal payment gateway. 

What payments are your customers going to use? 

The very first and one of the fundamental questions you need to ask before choosing a payment gateway – what are your customers already using to make payments? The answer can be pretty broad or narrow, depending on your customer base. 

Check which cards the payment gateway accepts. While the most common are Visa and Mastercard, numerous gateways also accept American Express and Diners Club cards. If you collect international payments, find out if the gateway supports local credit cards.  

How soon would you have to start accepting payments? 

The entire process of setting up your merchant account and the payment gateway itself generally takes about 3 to 4 weeks. You’ll be relieved to know that in South Africa the turnaround times can be as soon as 48 hours.  

Note: Make sure to provide all the required documentation for FICA purposes upfront as this is essential in getting your merchant account.

On the point of merchant accounts, keep in mind that a payment gateway can include a merchant account, or provide the option of funds going into a provided bank account.   

So while a new gateway applicant will need to provide proof of banking details (business/personal dep. on the nature of their business – sole proprietor or PTY ltd, etc), this is for FICA and compliance purposes.   

Every single rand earned through a gateway is deposited into a provided account from which the merchant can withdraw funds to their own (or) business account. This helps with risk, reconciliation, tax, and refunds. Fees are also typically deducted from the merchant account in these cases, and not via debit order.  

Note: The above is applicable to most situations but where fees are owed and they can not be collected from the balance of the merchant account, there would typically be a debit order put in place to recover the fees. 

Does it offer your small business payment options, such as automatic recurring payments? 

If your business accepts recurring payments, like subscriptions, you’ll want to look out for a system that will save your customers’ payment details, automatically allowing you to charge them on a routine basis.  

While many gateways do have this feature, you’ll be required to have an online merchant account in nearly every case.

Does the payment gateway offer hosted or non-hosted payments? 

Making your customer’s payment journey as seamless and quick as possible means you’ll need to consider using hosted or non-hosted payment pages.   

While both have benefits and disadvantages, do your research to see which ones work more successfully with your chosen payment gateway. 

How secure are their encryptions? 

Another crucial consideration when choosing your payment gateway is ensuring that their encryption systems are secure. You should aim to settle on a gateway that works with PCI-compliant companies and adheres to the Payment Card Industry Data Security Standard (PCI DSS). 

Double-check that the gateway maintains PCI compliance, as these standards are there to protect customer data and payment information.

Is the payment gateway’s reputation good or bad? 

This is a cosmetic consideration, but you’ll have to choose a payment gateway that your customers and other businesses trust. If a payment gateway has a less-than-favourable security history leading to cart abandonment, it’s best to stay away. 

In this case, it’s best to stick to larger, more popular payment gateways such as Netcash, Payfast, Peach Payments, and other reputable providers. Brand recognition works to your benefit here and will highlight your commitment to customer security. 

Benefits of using the best payment gateways for small businesses 

Using online payment gateways for your business holds several benefits you should be aware of before choosing which one to go for. These include the following:  

• Customer convenience – Having the best payment system for small businesses gives your customers an unmatched level of comfort where payments can take place around the clock and from any location.

• Improved purchase speeds – A payment gateway removes many barriers between choosing an item and making payment for it, increasing the likelihood of customers completing a purchase.

• Access to broader markets – As it’s easier to set up an online version of your brick-and-mortar storefront when using a payment gateway, your business can reach more comprehensive, more global markets. 

• A user-friendly experience – Payment gateways are designed by experts in the field, meaning you have a secure payment solution and can also give your customers a more enjoyable user experience.

• Increased transaction speeds – An online payment gateway can store customer details. This means they won’t have to manually input their details every time, making the shopping experience faster and simpler.

• Enhanced security – Your online payment gateway comes with many built-in security measures that give you peace of mind and ensure you adhere to relevant security standards. 

Payment gateway limitations 

It’s impossible to have the good without the bad, and when it comes to payment gateways, some limitations can be considered drawbacks. However, instead of a make-or-break situation, understanding and accepting these limitations is part of the game.   

Here are the most significant limitations to be aware of:  

• A gateway rarely accepts all types of cards or payments. As much as companies want to advertise the universality of their gateways, they seldom highlight which payments or cards they don’t accept. If there is a specific payment method you want to offer, be sure to ask before signing up.

• International customers may only sometimes have a payment option. You’ll need to be 100% sure that your payment gateway can work with various stores and payment platforms, especially if you’re looking at international payments.

• There is always the possibility of security flaws. With the evolution of the digital world, security concerns are unavoidable. And while a high-quality payment gateway should be secure, data breaches, mobile payment issues, and malware threats can happen. 

Payment gateway stacking and is it worth it? 

Ready to level up your payment gateway game? Well, then, your business should definitely look at stacking payment gateways. This is an effective tool to use in an effort to eliminate the effect of any gateway limitations, and above that, it’s a simple process to boot.  

Basically, payment gateway stacking works by employing more than one eCommerce gateway platform, maximising the amount of options your customers have for their purchases.  

Netcash’s online payment gateway and why you should consider it 

As the landscape for the best payment gateways for eCommerce continues to expand, picking one isn’t easy. Thankfully, there are standout options that you should consider when making your choice, but start with Netcash to save yourself a lot of time.  

With the Netcash Online Payment Gateway, you’re set to take advantage of a few key benefits that set it apart from the competition. Besides being already integrated into various shopping cart plugins, it also supports customised integration, meaning you won’t have to stress about API issues.  

By now, it’s clear that three aspects of having a payment gateway rise above the rest, offering various ways to pay, potential reduction in abandoned carts, and excellent after-sale support. With 20 years worth of payments experience, you can rest assured that choosing the Netcash Online Payment Gateway means you can bet on all three of those.  

If you’re considering payment gateway stacking, you’ll be happy to know that the Netcash payment gateway comes with various payment methods. These include:  

• OZOW Instant EFT and Capitec Pay 
• Credit Card (Visa, Mastercard, American Express, and Diner’s Club) 
• Scan to Pay including Zapper, Snapscan, and major banking apps 
• Payflex 
• Bank EFT 
• Retail Payment 
• Visa Click to Pay 

Finally, the Netcash eCommerce Payment Gateway also comes with the latest security features and aims to meet and adhere to all relevant standards. This means you’ll always be up to date with changes and advancements in the payment gateway security field. 

Get in touch: Reach out to Netcash today to get started with your payment gateway. 

Final thoughts | Payment gateways 

An important and integral feature of the digital economy, payment gateways acting as interfaces used to collect customer payment information are crucial to your business’s success. When it comes to something so vital, it’s best to not leave any stone unturned, and with this complete guide to payment gateways, you’re set.  

Allowing your customers the opportunity to safely and securely share their sensitive payment information and details is non-negotiable. Your next step is simply signing up to Netcash Online Payment Gateway. We’ll take care of the rest.