Many businesses owners moving into e-commerce focus on choosing the best platform, design and even delivery method, but leave payment options to the last, which is where the real challenges can creep in, says KYLE ROZENDO, CTO at SID.
While online retail still only accounts for 1% of retail revenue in South Africa, the growth rates of more than 20% year-on-year since 2000 speak volumes about the need for every business to seriously plan for an online presence.
The 2016 numbers from World Wide Worx released in April this year, not only show good growth for the year, but forecasts for 2020 show the figures doubling from their current baseline.
While this is great news for the economy, there remain many obstacles for the general business community when it comes to taking the leap in creating a virtual channel to market.
First of all, setting up an e-commerce offering is more complex than one thinks. Most businesses focus on choosing the preferred platform, design and even delivery method. Payment options are often the last thing business owners consider and, unfortunately, this is where the real challenges can creep in.
Most website platforms have e-commerce plugins which will accommodate global payment options such as PayPal. Card payment facilities are also offered by many payments service providers and this increases the merchant’s ability to take payments.
However, South Africa’s broader payment landscape is not nearly as sophisticated as we assume.
As we know only 1% of retail spend is channeled online and while some seasoned online shoppers may be perfectly happy with online security, there is still many a wary first-time shopper who may feel daunted by having to set up a Paypal account or nervous about sharing credit card details.
To add to the card challenge, only one fifth of South Africa’s banked population has a credit card, which further narrows a merchant’s pool of potential customers.
Fees, fraud and fuss
There are two main questions facing merchants when it comes to payment options: what are the benefits to my business, and how easy will it be for my customers to use?
The costs to merchants when the customer uses a credit card for a transaction can be unattractive. Merchants have to pay transaction fees to their payment service provider, as well as additional fees to the (acquiring) bank which holds their internet merchant account.
Trust can also be an issue. While we may feel a level of comfort when transacting with an e-Bay or an Amazon, when using a small, local e-tailer for the first time, many shoppers will feel uneasy about parting with their personal and financial details.
Chargebacks add to the merchant risk. Should credit card fraud take place, the onus is on the merchant to prove that the purchase was in fact made by the cardholder. Should they fail to do so, they could bear the costs of the reimbursements.
Merchants accepting credit cards will also need to comply with The Payment Card Industry Data Security Standard (PCI DSS). This is a proprietary information security standard for anyone who handles branded credit cards from the major card schemes, including Visa and MasterCard.
Setting up an internet merchant account can also result in delays and administrative hassle for a business eager to get their offering online.
Not only will the acquiring bank’s consultant do a full audit of the website’s compliance (terms and conditions, privacy, delivery and refund policies etc.), but the company will have to undergo additional compliance checks on their financial history.
Working through a payment aggregator can cut out the frustrating process of applying for an internet merchant account. However, the trade off will be paying higher transaction fees in order to make use of their platform.
Offering choices which work for customers and your business
Merchants need to find the best method to reach their customers in a way which makes the best business sense.
Adding an instant EFT solution to the e-commerce payment offering can make a significant difference to both the merchants’ business as well as the user experience.
Merchants stand to save significantly on transaction fees when receiving instant EFTs. Credit card payments can often be charged at a rate of 2 to 4% per transaction, whereas instant EFT fees are generally significantly lower.
It should be noted however, that merchants must also take into account how long it will take to receive their funds from their payment service provider. This can vary from anything from one to two days (as in the case of SID) or up to five days in the case of some of the aggregators. While this is important for any business, it is critical to smaller businesses, which are reliant on cash flow.
Instant EFT payment facilities are easy to set up and website developers can quickly get the merchant trading online.
From the buyer’s point of view, EFT is something they know and trust. Online customers will interface with their banks via a secure payment page which adds to their comfort and sense of security.
Moreover, because there is instant feedback, should there be insufficient funds in the account, both the customer and the merchant will know immediately, cutting down on fees resulting from returned transactions.
Most importantly, instant EFT allows far more people to actually trade and shop online. All a merchant needs is a valid bank account and the customer simply needs their regular online banking username and password.
EFT has reached its maturity in South Africa. Customers know and trust it as a means of transaction. Businesses who are looking to go digital should ensure that they have included instant EFT into their payment bouquet. To ignore instant EFT would not only cut them off from the lion’s share of local shoppers, but would cut themselves off from a payment method which offers the lowest cost to company available.
Samsung unfolds the future
At the #Unpacked launch, Samsung delivered the world’s first foldable phone from a major brand. ARTHUR GOLDSTUCK tried it out.
Everything that could be known about the new Samsung Galaxy S10 range, launched on Wednesday in San Francisco, seems to have been known before the event.
Most predictions were spot-on, including those in Gadget (see our preview here), thanks to a series of leaks so large, they competed with the hole an iceberg made in the Titanic.
The big surprise was that there was a big surprise. While it was widely expected that Samsung would announce a foldable phone, few predicted what would emerge from that announcement. About the only thing that was guessed right was the name: Galaxy Fold.
The real surprise was the versatility of the foldable phone, and the fact that units were available at the launch. During the Johannesburg event, at which the San Francisco launch was streamed live, small groups of media took turns to enter a private Fold viewing area where photos were banned, personal phones had to be handed in, and the Fold could be tried out under close supervision.
The first impression is of a compact smartphone with a relatively small screen on the front – it measures 4.6-inches – and a second layer of phone at the back. With a click of a button, the phone folds out to reveal a 7.3-inch inside screen – the equivalent of a mini tablet.
The fold itself is based on a sophisticated hinge design that probably took more engineering than the foldable display. The result is a large screen with no visible seam.
The device introduces the concept of “app continuity”, which means an app can be opened on the front and, in mid-use, if the handset is folded open, continue on the inside from where the user left off on the front. The difference is that the app will the have far more space for viewing or other activity.
Click here to read about the app experience on the inside of the Fold.
Password managers don’t protect you from hackers
Using a password manager to protect yourself online? Research reveals serious weaknesses…
Top password manager products have fundamental flaws that expose the data they are designed to protect, rendering them no more secure than saving passwords in a text file, according to a new study by researchers at Independent Security Evaluators (ISE).
“100 percent of the products that ISE analyzed failed to provide the security to safeguard a user’s passwords as advertised,” says ISE CEO Stephen Bono. “Although password managers provide some utility for storing login/passwords and limit password reuse, these applications are a vulnerable target for the mass collection of this data through malicious hacking campaigns.”
In the new report titled “Under the Hood of Secrets Management,” ISE researchers revealed serious weaknesses with top password managers: 1Password, Dashlane, KeePass and LastPass. ISE examined the underlying functionality of these products on Windows 10 to understand how users’ secrets are stored even when the password manager is locked. More than 60 million individuals 93,000 businesses worldwide rely on password managers. Click here for a copy of the report.
Password managers are marketed as a solution to eliminate the security risks of storing passwords or secrets for applications and browsers in plain text documents. Having previously examined these and other password managers, ISE researchers expected an improved level of security standards preventing malicious credential extraction. Instead ISE found just the opposite.
Click here to read the findings from the report.