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.
Low-cost wireless sport earphones get a kickstart
Wireless earphone brands are common, but not crowdfunded brands. BRYAN TURNER takes the K Sport Wireless for a run.
As wireless technology becomes better, Bluetooth earphones have become popular in the consumer market. KuaiFit aspires to make them even more accessible to more people through a cheaper, quality product, by selling the K Sport Wireless Earphones directly from its Kickstarter page
KuaiFit has an app by the same name which offers voice-guided personal training services in almost every type of exercise, from cardio to weight-lifting. A vast range of connectivity to third-party sensors is available, like heart rate sensors and GPS devices, which work well with guided coaching.
The app starts off with selecting a fitness level: beginner, intermediate and advanced. Thereafter, one has the ability to connect with real personal trainers via a subscription to its paid service. The subscription comes free for 6 months with the earphones, and R30 per month thereafter.
The box includes a manual, a USB to two USB Type B connectors, different sized soft plastic eartips and the two earphone units. Each earphone is wireless and connects to the other independently of wires. This puts the K Sport Wireless in the realm of the Apple Earpods in terms of connection style.
The earphones are just over 2cm wide and 2cm high. The set is black with a light blue KuaiFit logo on the earphone’s button.
The button functions as an on/off switch when long-pressed and a play/pause button when quick-pressed. The dual-button set-up is convenient in everyday use, allowing for playback control depending on which hand is free. Two connectivity modes are available, single earphone mode or dual earphone mode. The dual earphone mode intelligently connects the second earphone and syncs stereo audio a few seconds after powering on.
In terms of connectivity, the earphones are Bluetooth 4.1 with a massive 10-meter range, provided there are no obstacles between the device and the earphones. While it’s not Bluetooth 5, it still falls into the Bluetooth Low Energy connection category, meaning that the smartphone’s battery won’t be drastically affected by a consistent connection to the earphones. The batteries within the earphones aren’t specifically listed but last anywhere between 3 and 6 hours, depending on the mode.
Audio quality is surprisingly good for earphones at this price point. The headset style is restricted to in-ear due to its small design and probable usage in movement-intensive activities. As a result, one has to be very careful how one puts these earphones, in because bass has the potential of getting reduced from an incorrect in-ear placement. In-ear earphones are usually notorious for ear discomfort and suction pain after extended usage. These earphones are one of the very few in this price range that are comfortable and don’t cause discomfort. The good quality of the soft plastic ear tip is definitely a factor in the high level of comfort of the in-ear earphone experience.
Overall, the K Sport Wireless earphones are great considering the sound quality and the low price: US$30 on Kickstarter.
Find them on Kickstarter here.
Taxify enters Google Maps
A recent update to Taxify now uses Google Maps which allows users to identify their drivers, find public transport and search for billing options.
People planning their travel routes using Google Maps will now see a Taxify icon in the app, in addition to the familiar car, public transport, walking and billing options.
Taxify started operating in South Africa in 2016 and as of October 2018 operates in seven South African cities – Johannesburg, Ekurhuleni, Tshwane, Cape Town, Durban, Port Elizabeth and Polokwane.
Once riders have searched for their destination and asked the app for directions, Google Maps shares the proximity of cars on the Taxify platform, as well as an estimated fare for the trip.
If users see that taking the Taxify option is their best bet, they can simply tap on the ‘Open app’ icon, to complete the process of booking the ride. Customers without the app on their device will be prompted to install Taxify first.
This integration makes it possible for users to evaluate which of the private, public or e-hailing modes of transport are most time-efficient and cost-effective.
“This integration with Google Maps makes it so much easier for users to choose the best way to move around their city,” says Gareth Taylor, Taxify’s country manager for South Africa. “They’ll have quick comparisons between estimated arrival times for the different modes of transport, as well as fares they can expect to pay, which will help save both time and money,” he added.
Taxify rides in Google Maps are rolling out globally today and will be available in more than 15 countries, with South Africa being one of the first countries to benefit from this convenient service.