PayPal and M-Pesa in South Africa


After a long lull, South Africans are being bombarded with two break-trough solutions in the area of payment options.

First, in the middle of March 2010, FNB announced the introduction of PayPal to South African market. This will enable South Africans to not only make online payments to anywhere in the world via PayPal (they were able to do that before), but also to receive online payments from anywhere in the world via PayPal. With more than 81 million customers in 190 markets, PayPal is the biggest internet payments service provider. The South African variety of PayPal will bear a mark of exclusivity: anyone who wants to make use of it has to be an FNB customer.

Then, at the end of March 2010, Vodacom and Nedbank announced that they will introduce to South Africa M-Pesa, a mobile money solution that makes it possible for millions of people who do not have access to banking sector to pay bills and to transfer money from person to person using a cell phone. M-Pesa has been enormously successful in Kenya.

bidorbuy community is closely following both PayPal-SA and M-Pesa-SA.

PayPal is expected to boost international trade on the site, especially where South African sellers trade with buyers from another country. PayPal also offers security measures, which people who are wary of shopping online for fear of fraud may very well find worth the additional fees PayPal charges. However, it will not make sense as a local payment option, because all PayPal transactions are in US dollars and incur a conversion fee. For SA-based buyers and sellers bob-Pay solutions are the best option.

M-Pesa, or a similar payment solution, is expected to bring to bidorbuy those South Africans who do not have access to an internet enabled computer. They will come in search of bargains to buy, as well as in order to make more money by selling on this consumer-to-consumer online trading platform. It is estimated that only about 10 percent or 5, 5 million South Africans access internet via computers. Everybody, however, has a cell phone, which is why M-Pesa may have a profound effect on bidorbuy and e-commerce in general.