Payment Gateway options in South Africa

[AM13]

Hello,

I am just starting my business and my website. I’m based in South Africa, but much of my client base is located in the US and Europe. I’ve almost finish building my website on Shopify only to discover how limited my payment gateway options are. Payfast and Paypal are available to me but Paypal only works with USD, not allowing checkout in ZAR, and Payfast has a very low maximum payment limit. If I change my store currency to USD then, from what I’ve read, I must then open a bank account in the US. I do have a bank account in the US already, but then taxes, accounting and actually getting my money would be more of a nightmare than they already are.

All the apps able to solve my problem only work fully with Shopify Payments, which is not yet available in South Africa

Can someone please clarify for me if there is a straightforward solution to this problem? I've read through related topics on the forum and not found any answers. Maybe there is some updated information on it that I haven’t run across?

Thanks!!

[Nick · Accepted solution]

Hi @AM13,

Nick here from Shopify. 

Really good questions! I completely see where you are coming from if your client base is mainly in the US and Europe. If it was me I would stick to keeping things with your native currency as that is where your business is set up and registered. I would recommend using one of the gateways Shopify is partnered with, in South Africa which you can see here. 

You can change your currency if you like, but what you get paid out and what kind of bank account you need to accept it depends on the payment method you are using to collect the money. You can set your store so your customers see their native currency with a currency converter app from the Shopify App Store. The checkout would display in ZAR though. 

Hopefully, this helps answer your question and gives you an idea of the next steps to take. 

All the best, Nick

[Diana20]

Hey, 

I´m also comfronting with the same problem, we got two shops and the both of them are working on the same credit card. On the first shop we already bought a new domain to change it from .myshopify in just .com .. so on the second shop we tried to do the same but it´s showing me the same warning and I´m not able to buy it.. I already tried your steps to clear the browser or to verify my Information. I also tried to switch different Browser and still not working.. what should I do to be able to buy a new domain for the second store?

Sorry for writing here but I really do need help and I would be greatful if you´d help me

[AM13]

Hi Nick,

Thanks so much for your reply! You've confirmed what I had been able to discover and I appreciate the advice.

I will check out the currency converter apps and hopefully at some point in the near future more options will be available here through Shopify.

The only question I have now is whether Paypal Express will work. It's listed as an option in SA but when I "check out" in test mode it says it doesn't support my currency. I guess I'll have to contact them directly?

Thanks again and all the best,

Amber 

[Lorraine_Woolf1]

I'm helping set up a store for a friend in South Africa,

and we're facing this same nightmare.

Basically, there are no on-site payment options for South Africa, i.e., customers always enter their credit card details on another website, e.g. 2Checkout, PayFast, etc.

This is very disappointing, because studies show less conversions; some customers want to enter their credit card on the merchant website. If they get redirected to some gateway that they've never heard of, e.g. "PayFast" they may rapidly lose trust, and abandon the transaction.

So effectively, South African merchants are handicapped and will have fewer conversions.
This would all be solved if Shopify Payments were available in South Africa, which it isn't, and yet Shopify has the audacity to charge us 2% of all sales for not using it. Despicable. Not to mention all the other ways it handicaps foreign stores, for example the lack of multiple currency support. And yet they charge the same monthly fees as the un-handicapped stores. Shopify should really be ashamed. You suck.

[Lorraine_Woolf1]

Hi AM13,

"..much of my client base is located in the US and Europe. [...] Payfast and Paypal are available to me but Paypal only works with USD, not allowing checkout in ZAR, and Payfast has a very low maximum payment limit. If I change my store currency to USD"

Firstly, we were able to use USD as a currency, which works OK with PayPal,

but then when we tried to use PayFast, it wanted our currency to be in ZAR, which was a deal-breaker, so we have effectively dropped PayFast.

We are now trying 2Checkout, and are waiting for them to activate our account.

But actually, I don't really see the point in any of these companies, since none of them offer on-site checkout; they all complete checkout on their own websites: this creates a "trust issue", when a customer in the USA who has never heard of "PayFast" gets redirect to their website to complete payment.
Contrast that with PayPal, whom almost everyone in the USA is familiar with and have greater "trust" in.
Therefore, we will probably just stick to PayPal Express as a checkout method.

The problem we then ran into, was that it doesn't show the credit card logos:

I hope some of this is helpful,

and yeah, Shopify should be ashamed of the way they treat merchants in developing nations; these countries are already handicapped when it comes to doing business online, and Shopify just make it so much harder.

[Nick]

No worries at all @AM13, glad to know it helped you. 

---

The only question I have now is whether Paypal Express will work. It's listed as an option in SA but when I "check out" in test mode it says it doesn't support my currency. I guess I'll have to contact them directly?

---

That's exactly right. Your best bet here is to talk to PayPal directly about this. Shopify wouldn't have any control or say over a third party payment gateway and which currencies they support. 

[AM13]

Hi Lorraine Woolf1,

Thanks for your responses! Yeah, it's really so frustrating. Maybe I'll also take a look at 2checkout. Let me know how it goes for you! I'll post an update on what's worked for me when I finally figure it all out. Then maybe others will find help in our struggles, it's so hard finding your way through this mess to a viable solution. I don't know why they can't just give us access to all their features when it comes to sales.

Just one quick question, if your stores main currency is in USD, does that matter to 2Checkout? 

Thanks again!

[Lorraine_Woolf1]

Hi

We are still submitting verification documents for 2Checkout, so its gateway isn't live/connected for us yet,

so indeed we are waiting to see what the deal is with currency.

I did notice however, that for their withdrawl options, the options are basically PayPal, or Wire Transfer,
and this strongly implies that USD is going to be OK.
Other South African gateways insisted we have our store in ZAR, which doesn't work well for us, because we're not really trying to pass as a South African store; the only reason it's a South African store is because the merchant is in South Africa, and will want the funds to end up in his South African bank account -- that's literally the only reason).

[AM13]

Hi,

I hope it works out, it would be great to find a smooth solution in the end. I've just sent an inquiry to them. I was just wondering if the percentage they charge is including or on top of Paypal's usual percentage per purchase. If it's on top of, that would be like 13% per purchase...

Your merchants issues and end goal are definitely inline with mine. Thanks for sharing your info with me, I really appreciate it 🙂

[SRS52]

Hi, I'm in the same boat. To the point, where we are considering setting up offshore structures to avoid this. 

Has the 2Checkout solution checked out? 

[Lorraine_Woolf1]

2Checkout came back to us with a generic response asking us to please submit X months worth of sales history.

We were very taken aback because, um, this is a brand new store, we have no sales history.

We need the payment gateway, to get the sales history, to give to 2Checkout.

So... we decided to just launch with PayPal (which links to FNB account) and accepts USD.

The primary currency on the website is USD,

and we use an app to facilitate currency conversion,

but when the user checks out it is in USD, and we get paid in USD.

Indeed, it would be so much easier if we could just use Shopify Pay.

During my research, I encountered the Stripe Atlas program:

https://stripe.com/atlas

..where for USD 500, they will register a US company for you, and open a bank account for you, in the USA,

thus you can set up a Shopify US store.

If you can think of any other way to set up offshore, please share.

It all comes down to creating a foreign bank account. What's the easiest way to do that, without leaving South Africa?

[SRS52]

Great news that you have something up and running. I have also settled on
Paypal and attempted to link my FNB account today.

Do you need the app to facilitate the currency conversation if the primary
currency is USD and the checkout is in USD?

I assume it will be for purchases outside of the US?

I have some research being done in terms of setting up offshore and will
let you know if anything feasible comes up.

[AM13]

Hi,

I finally heard back from 2Checkout. Here are the questions I asked: 

1. Will your service allow my store currency to be in USD and pay ZAR into my South African bank?

2. Does your 2monitize plan include Paypal's percentage? Or would I also be paying a percentage to them on top of this?

And this is an abbreviation of the email they sent me:

~"To answer your first question, please be informed that we do not support ZAR as a payout currency. The available payout currencies for your type of account are: USD, EUR or GBP. If most of your sales will be placed in ZAR, then the amounts will be converted to USD and the payment will be released in this currency. If you do not have an USD bank account, then your bank will convert the funds to ZAR.
Regarding your second question, please check our payout options:
Paypal, Payoneer, ACH International Wire, with a fee for the international wire of 15 USD/ GBP/ EURO per payout. 
Also, note that Payoneer is a separate company, and the card is administrated separately. 2Checkout does not charge fees for the transfer of funds to this card, however, there are wires associated with the account that are assessed by Payoneer.
Please see here all the payout details:
https://knowledgecenter.2checkout.com/Onboarding/Payouts
If you are selling physical goods, then I would advise you to apply for 2Sell and in case your business is based on subscriptions mostly, then 2Subscribe model might be a better option. 
2Monetize is a product dedicated only for merchants selling digital goods.
The displayed pricing is the standard one for your country. In case you sell outside your country, then a cross-border fee (+2%) is going to be applied on top of the standard price (there are a few countries for which the cross-border fee does not apply and you can find the entire list here https://knowledgecenter.2checkout.com/Documentation/01Product_catalog/05Pricing_and_charge_scenarios...)
All fees are applied per successful sale. Please note that there is a rolling reserve "fee". The rolling reserve is a built in feature for our system, and helps to mitigate potential chargebacks or refunds that may be necessary in the event you were to leave 2Checkout. These funds are calculated at a set rate for each type of business and at the time a payment is made to you. This same amount is then returned to you in the payment cycle that follows the 90-day hold period.
We are currently set up to send payments once a week (2Checkout release the funds in three currencies - EURO, GBP or USD). In case one of your customers orders using a different currency than the mentioned ones, then a 4% FX fee is going to be applied."~

I hope this helps. I think I will also just use PayPal for now. The only other option would be maintaining 2 identical shops and link them. One with the shop currency set to ZAR and the other to USD, then people in SA can use Payfast for the one and everyone else PayPal with the other...grrr...

As for the currency conversion app, I have Debut theme and needed one. I use a free app that's working great so far called Auto Currency Switcher, very helpful support staff as well.

[Lorraine_Woolf1]

Hi

Many thanks for sharing that.
A point of confusion with your situation:
As I understood it, you want to primarily sell to South Africans, in ZAR;

South African Shopify stores can only have 1 currency, which is what the customer sees during checkout

(You can use an app to show multiple currencies, but the customer then still sees your primary currency during checkout),

thus you have to choose between ZAR or USD.

If you're selling mostly internationally, the ZAR might throw them,

if you're selling mostly to South Africans, the USD might throw them.

Thus I can understand why you might want to create 2 separate stores:
1 to market internationally, and 

1 to market in South Africa.

(I wonder if the USA Shopify accounts, which apparently support multiple currencies – the South African ones don't without an app – would solve this problem for you).

In our case, we were selling mostly internationally (and pretty much not to South Africa at all), so it did not make any sense whatsoever for us to sell in ZAR,

whereas you seem to be the other way round: you want to avoid USD.

With 2Checkout, it's still unclear on whether they can even support a store with ZAR as their primary currency?

Anyway, interesting stuff. 
Yes this has been a total nightmare.

Because of this, I don't think I can recommend Shopify for South African ecommerce; 
but at the same time, I'm not sure what the best alternative will be.

Best of luck 🙂

[AM13]

Hi,

No, sorry for the confusion... I am based in SA but most of my customers are in the US and Europe. I want to be able to accept payments easily from these places, but also want South Africans to not be excluded as customers.

I think I'll stick to PayPal for now with my store currency set to USD. PayPal will at least pay out into my SA bank account. 

It looks like 2Checkout will support it but with lots of different fees. Conversion fee, plus it looks like a $15 fee for Forex or something, where we're based fee... not so clear cut. 

I'm looking in to Peach Payments now as well, just to see, but I've got a feeling it'll be a similar story to Payfast or 2Checkout.

I agree with you, Shopify doesn't make it too easy with the payment gateways. I'm always going back to look at other website builders/hosts that would be friendlier to my location (and budget!), but it always feels like starting over and ending up back in the same place. 

Thanks and good luck to you too!

[AM13]

Oh! just saw that last part... It doesn't look like they support ZAR as the stores main currency...

[ChantelP]

If you have a bank account with FNB you can link your account to PayPal to recieve your payments into an SA account.

[ChantelP]

I recieve payments in this manner for my holiday rentals from Airbnb. Its works fine, I'm going to use this option then because I was going to add PayFast now I will stick to paypal and just show conversion for SA customers.

[Eucliff]

Hi Nick I also have same problem I am in South Africa most of my customers are in the United state and my store is in South Africa . My question is how United States customers are going to checkout if my store currency is in rand do they need to open South African bank?