Setting Up Your Online Store: How To Choose A Payment Gateway

Payment gateways are a crucial topic that will undoubtedly come up when you are looking to start an online store. Having the right payment gateway allows your customers to transact smoothly and ultimately gets you paid!

What is a payment gateway?

At its core, a payment gateway is a technology that allows businesses to receive payments from their customers.  The payment gateway communicates with financial institutions securely to process transactions. Every time a customer uses a credit card, ebucks or instant eft, the payment gateway verifies the transactions and collects funds from the bank for you. Ca-ching. 

Why do you need a payment gateway?

Your online store would be nothing more than a catalogue of products without the capacity to accept payments. This is where a payment gateway comes into play. You’ll need a payment gateway to accept payments online through your e-commerce store. While different payment gateways provide different services, they should all provide you with the assurance that your customers’ payments are being processed safely and securely.

A payment gateway can allow you to be paid using a variety of methods. For example;

A good payment gateway should also offer consistent fraud protection by being PCI compliant, as well as services for credit card chargebacks, reconciliation, and overall account management.

How do you choose a payment gateway?

It can be difficult to choose the right payment gateway, especially if you have no prior experience or knowledge about the different providers. But don’t worry, we’re here to help. Let’s have a look at some of your options:


Paygate is a local payment gateway that provides both merchant accounts and gateways. They offer a wide range of services, including the ability to accept cryptocurrencies.

Monthly Cost: ranges from R0 – R450 pm

Card Transaction Fee: R1.25 

Payout Period: 1 – 2 business days 


Yoco is a global payments platform that offers customers small pocket-sized card machines and an online payments platform, making online and physical transactions simple and accessible. They have been around since 2015 and are headquartered in South Africa. 

Monthly Cost: Free

Card Transaction Fee: R1.25 

Payout Period: 1 -2 business days 


PayFast offers merchant accounts as well as gateways, but they are more focused on local businesses rather than international ones like Yoco. The company was founded in 2007 by Jonathan Smit and Andy Higgins and has grown into one of South Africa’s largest online payment processors.

Monthly Cost: Free

Card Transaction Fee: 3.2% + R2.00 

Payout Period: 1 – 2 business days 


SnapScan is yet another local online payment processor which allows users to scan QR codes using their smartphones or tablets for quick cashless payments at thousands of stores across South Africa. Snapscan also allows you to send Snaplinks to customers to receive payment. 

Monthly Cost: Free

Card Transaction Fee: 3.5%

Payout Period: 1 – 2 business days 


PayPal is an American multinational financial technology company operating an online payment system in the majority of countries that support online money transfers. PayPal is one of the world’s largest Internet payment companies, allowing users to send and receive money using a secure, easily accessed platform.

Monthly Cost: Free

Card Transaction Fee: 2.4% to 3.4% plus R5 per transaction

Payout Period: 3 – 5 business days

Before selecting a payment gateway, take the time to conduct some research and determine the following:

  • Which payment processors are accessible in your country?
  • What are their costs, such as monthly fees, per-transaction fees, and any other hidden costs?
  • Which e-commerce platforms do they support through integration or third-party plugins?
  • What further services do they provide, and are they free or are there additional fees?
  • Do they provide local customer service and after-sales support?
  • Do they have positive online ratings from customers and businesses?

Our go-to payment gateway

There are a few recognisable payment service providers around the globe that act as a payment gateway for their merchants. In South Africa, PayFast is a popular payment solution that processes payments on behalf of more than 80,000 merchants.  For South African-based online stores, we recommend Payfast.

One of the benefits of choosing PayFast is that you can sign up and start receiving payments without the need for a merchant bank account, important for small businesses or side hustles just getting going. You also don’t need to be concerned with meeting the rigours of PCI DSS requirements, which are necessary when handling sensitive credit card information, as PayFast handles all of this for you.  

Setting up PayFast as your payment gateway is a simple process that can take minutes depending on your e-commerce platform. PayFast also integrates with over 80 different shopping cart platforms including; Shopify, WooCommerce, Xero, ECWID, and Magento. The best part is that they only charge per transaction. There are no monthly fees and no signup or setup fees whatsoever.

Take a look at their transaction fees below:

Payment Method Fees (excl VAT)
Credit and Cheque Card3.2% plus R2.00
Instant EFT2.0% (minimum R 2.00)
MoreTyme5.5% plus R 2.00
Masterpass3.5% plus R 2.00                   
Store Cards3.2% plus R 2.00
SnapScan3.5% plus R 2.00
Debit Card3.5% plus R 2.00
Scode 4.5% plus R 5.00
Zapper3.5% plus R 2.00
Payment method transaction fees on Payfast

When launching your online store, it’s important to sign up for and activate your payment gateway as soon as possible so you can begin accepting payments. There is no limit to what your online store can achieve with the right business model and payment gateway.

If starting your online store seems stressful, reach out. We’re here to guide you through the process.