The current news that First National Bank is about to announce their official partnership with PayPal, is definitely music to my ears and will be a HUGE benefit to small tourism entrepreneurs. South Africans have been able to partly use PayPal, limited only to paying for services and products purchased online.
However now with the First National Bank partnership, this means South Africans will also be able to receive payments using PayPal. PayPay is the acceptable payment method across the world with the majority of internet businesses only offering PayPal option for accepting payments.
What is PayPal?
To those not familiar with PayPal, this is the market leader (literally) that processes credit card payments online without users sharing their financial information with a third party during the payment process.
Buyers
Buyer creates an account with PayPal once-off, then logs-in with email address and password to make online payment with a seller offering PayPal payment option.
Sellers
No monthly fees, no setup costs and no getaway fees, sellers only pay 2.4% – 3.4% + $0.30 USD, depending on monthly volume. These are good news for small tourism operators who will now be able to accept credit card payments without worrying about extra monthly expenses.
My experience
I’m an active PayPal user since I make regular payments mainly for:
1. Web Hosting
I have a reseller’s account with HOSTGATOR in the US, where I’m currently hosting 10 websites a mixture of in-house websites and on behalf of clients. I’m paying less than R350 per month, considering that 3 years ago I used to pay R5,000 each month while still hosting with a local service provider.
2. Freelancers
I use the services of various freelancers from graphic designers for logo designs, web developers for tweaking wordpress themes etc, all mainly based in India. All these skilled professionals I get to access on ELANCE a freelancer’s portal.
Missed Opportunities
I’ve often pulled my hair on missed opportunities to join lucrative affiliate programs (to earn passive commission), since PayPal has been the only payment option for affiliates. Now I’ll be able to participate in various affiliate networks to increase my revenue stream on this blog, since relying on private advertising and Google Adsense is not enough to sustain Travelwires.com
Owner-Managed Tourism Operators to Accept Credit Payments
All small tourism operators who have not been accepting credit card payments, will now be able to offer such a facility without breaking the bank. You’ll only pay a minimal fee for processed transactions, without paying monthly fees, setup costs and getaways fees.
Thank you to First National Bank for opening up the online economy for South Africa, now a new breed of online entrepreneurs will be born.
Blogger Muzi Mohale
I’m Muzi Mohale, based in Roodepoort (South Africa). Blogger with www.travelwires.com. Love Travelwires.com since I get to travel our beautiful country through blogging and get first hand tourism experience.
This is cetainly good news for small business owners. When I first started my Guest House business, the banks scared me off from overseas bookings because of the high costs of cerdit card facilities. Fortunately there are now more viable alternatives. I have used Paypal for 6 years or more; even before they would accept SA credit card payments, and I have never had any problem. Paypal will really make overseas bookings accessible for the small accommodation business owner.
that's great. At least international merchants don't have to worry about shipping to africa.
You missed something important.
If you use Paypal for a tourism operation your buyers can only use their Paypal accounts to pay for items if they are using a computer in the country where they opened their account.
So a British tourist paying for a Cape Town guesthouse booking while sitting at a computer in the UK is fine, no problems there. This is by paying with a Paypal account, not a credit card.
If you have the same British tourist using his laptop at his Cape Town hotel to book a room in say Plettenberg Bay using his Paypal account(not Credit card using Paypal as the payment provider) is where the problem comes in. Paypal own fraud protection schemes will immediately block his account when the login comes from a South African or any foreign IP address and ask him to answer a bunch of security questions and provide copies of official identification to prove that his account has not been hacked and is now being accessed by a crook in South Africa. Not many tourists carry a scanner around with them, they will most likely move on to the next hotel and pay with a credit card after getting burnt on your site.
Just to clarify, if the tourist in Cape Town booked a room in Plett on your site using Paypal by filling in his credit card details there will not be the same issue. The problem is using a Paypal login abroad.
Great to hear that happening in your area! You are right that this will definitely open many new doors for online entrepreneurs. I’ve been using paypal and must say that it is really simple even for newbies.