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Paypal and FNB

The Pros and Cons of PayPal in South Africa

Payment gateways such as PayPal, Mygate, PayGate, PayFast, and VCS allow your customers to make purchases on your site. PayPal is internationally recognized as the industry leader in payment, with over 230 million users worldwide.

This would make PayPal a natural first choice as a payment gateway for your site, but as the Rand is not a PayPal supported currency you could only use it to pay others or transfer money into other PayPal accounts. Receiving funds into your account used to be a big problem that held South African online entrepreneurs back from taking full advantage of what PayPal has to offer.

In this blogpost we explore the pros and cons of PayPal in South Africa and look at the implications for the WordPress developer.

FNB to the rescue

In 2010 a partnership between First National Bank (FNB) and PayPal finally made it possible for South Africans to send and receive funds through this popular payment Gateway. The service allows customers to top up and withdraw funds to their qualifying FNB accounts from their PayPal accounts

This video posted by MMClients on You Tube explains how to transfer money from PayPal to an FNB account.

In a recent move (November 2011), FNB has opened up access to their PayPal service, allowing people with accounts at any other South African bank to link their accounts to their PayPal account and receive funds from anyone belonging to the PayPal network across the world.

Limitations of FNB’s service

With FNB opening up its service to clients of other SA banks, it seems as though all South Africans can finally take full advantage of the PayPal service. This is a great step forward, but in dealing with the other South African banks we’ve found that they aren’t aware that this service has been opened to them.

FNB representatives at the recent Tech4Africa conference proved lacking in knowledge of their PayPal services on offer and we’ve had mixed feedback  from our clients on their customer service experience with FNB and PayPal.

The sign up process for PayPal services with FNB is complicated and easily aborted due to the difficulty. This has led to the many of our clients opting for South African payment Gateways.

Keep a look out for our Step-by-Step Tutorial on linking external accounts with FNB. We will be publishing it soon.


  • Pay for products and send money without having to enter your personal information every time.
  • PayPal is immediately recognizable to most online shoppers in any country and it is widely respected and trusted.
  • The easiest gateway to setup, with the least admin.
  • Once you are verified you can display the verified PayPal badge on your site to add to your trust and legitimacy from the consumer perspective.
  • PayPal gives you access to a global network of over 190 countries and regions
  • PayPal is one of the payment gateways with the least fees (about R2.06 + 4.9% of sale). *As Andy has pointed out in the comments below PayFast seems to be the cheapest and most convenient for the South African market.


  • It is unable to use Rands (ZAR) as the primary currency. This means that when your customers checkout and end up on the PayPal payment page they will see the price in $’s even if the price is in Rands on your site.
  • You have to link your bank account to PayPal via FNB
  •  The PayPal checkout process is not streamlined for non PayPal users. It nudges the user toward creating a PayPal account and doesn’t offer the credit card payment option at first.

PayPal and WordPress eCommerce solutions

Working on various eCommerce solutions for our clients, we’ve found that PayPal remains the most requested gateway to use.

PayPal and WP eCommerce

WP eCommerce boasts having the best Payment gateway API. WPEC overcomes the issue of ZAR not being a PayPal supported currency by converting the currency to USD upon Checkout. It does this within the Gateway itself using an external API so that you could still process payments.

We used WP eCommerce and PayPal on a variety of projects, including: Celtic RugTruth Coffee and Vivi Kola.

PayPal and WooCommerce

WooCommerce offers two PayPal Extensions:

Currently WooCommerce does not have the functionality enabling the PayPal gateway to convert Rands to USD upon checkout, but we have had confirmation from WooThemes that it is on their development roadmap.

PROS for a WordPress Developer

  • You are able to test your shop fully using a PayPal sandbox account, which is an exact copy of the actual PayPal.
  • The PayPal system is widely supported by just about every single system, theme and plugin out there.
  • PayPal is well documented and the developer community is fairly mature.

CONS for a WordPress Developer

  • Since the Rand (ZAR) is not a supported currency, it can be difficult to get the amount changed to display Rands.
  • PayPal has a high learning curve and is not user friendly.


Despite the issues faced when using PayPal as a South African consumer, online entrepreneur or WordPress developer it remains the most popular gateway for online businesses.

Further Reading

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15 Responses to The Pros and Cons of PayPal in South Africa

  1. Chris M March 15, 2012 at 11:22 pm #

    Great article, it’s so important that people understand the pro’s and con’s before getting involved. Appreciate the mention of the article I wrote.

    I wrote a post on PayPal in South Africa, it has received 880 comments and it a huge wealth of knowledge, felt I would share it as it does add value:

  2. Barend March 16, 2012 at 10:30 am #

    Hi Chris. Thanks for sharing your knowledge with us.

    • Chris M March 16, 2012 at 12:29 pm #

      Cheers! =)

  3. Andy March 19, 2012 at 11:50 pm #

    I wouldn’t say it is quite correct to say that PayPal has the least fees (the last bullet point under pros). PayFast for example charges R2 + 4.9% for credit cards and 2.00% for EFTs (so for credit cards it is about the same basic fee). The problem with PayPal is you still have to add the withdraw fee FNB charges on top of that, which if I am not mistaken is an additional 1.5%, as well as the additional amount you would lose in the currency exchange from dollars to rands if you need to convert it to rands, which strictly speaking current exchange control laws force you to do (again I assume FNB and/or PayPal make an additional amount on the spread of the exchange rate). So I would say PayPal definitely does not have the least fees especially if you are targeting a South African audience.

    • Barend March 20, 2012 at 4:47 pm #

      Thanks for pointing that out Andy. Do you know what the bank charges are for receiving money from PayFast?

      • Andy March 20, 2012 at 10:24 pm #

        Brend, the banking charges for receiving your money that PayFast has collected on your behalf is a flat R10 per payment. You can accumulate funds for as long as you want and request a pay out at any time (which triggers the R10 fee no matter what the amount is). I think PayFast works better if your audience is predominately South African (besides the cost issue they would tend to prefer to pay in Rands rather than dollars) however if your audience is predominately outside of South Africa then PayPal is likely a better option. Or better still, if possible, offer both (or more) payment methods and let your customer decide which one they want to use.

        • Barend March 22, 2012 at 11:28 am #

          Thanks for sharing all this information Andy. Before, we hadn’t really considered PayFast, but now it’s definitely become an option.
          You’re right of course, offering more than one payment option to the customer does give them greater choice (and as a result a better experience). As long as it doesn’t confuse them, choice is good.

  4. Lee July 4, 2012 at 2:36 pm #

    Payfast is not the cheapest (at 4.9% + R2 ex VAT). Paypal comes in under that (3.4% + $ 0.30c). And then there is Monsterpay (2.9% + R2)

    So Payfast is in fact the most expensive! However if you’re selling predominantly to the SA market it makes sense to use Payfast or Monsterpay because the converting to $ and back is just a nasty mess

    • Niki August 7, 2012 at 12:49 pm #

      If you add FNB’s 1.5% fee to your Paypal transaction, you get 4.9% and $.30 works out to about R2 plus currency conversion fees if they apply. Paypal may look more trustworthy to international customers who do have Paypal accounts but it’s not a cheaper solution. So a local company may be better for local customers
      Monsterpay seems to be ok for local customers but I hear negative feedback when it comes to international customers from various people who have used it

  5. Jay January 15, 2013 at 5:20 pm #

    I dunno if PayPal is worth it in SA. I received an e-mail that said we cannot even use Paypal funds to buy stuff overseas or pay other PayPal users. All you can do with money received via PayPal is to withdraw it to your SA bank account, which to me, defeats the point, since the whole reason I got it (and what a pain that was) was to be able to buy internationally, since most sites accept it – unless you happen to freaking live in SA.

    Thanks for the video on showing how to withdraw the funds.

    • David Merrington May 13, 2013 at 2:57 pm #

      Jay, that point you made is one that everybody seems to have overlooked so far. I agree it is a severe drawback that we may not make payments or distribute funds from our new FNB-linked accounts.

      In my case, I need to pay my business affiliates their commissions but this is not allowed. So I then have to pay them from my old Safrican PayPal account, directly from my Standard Bank card.

      However, I am testing a Paypal “sandbox” account to see whether I will be allowed to send their commissions in the form of instant “split payments” – a percentage to me and a percentage to the affiliate, paid directly by the purchaser. Look for an update about this from me sometime later.

      • Barbara Kerr-Shaw May 14, 2013 at 3:59 pm #

        Hi David

        Thanks for your comments and we look forward to your update on your testing on Sandbox when you’re ready.

        • David Merrington May 17, 2013 at 5:35 am #

          Hi Barbara

          My thanks to you. Yes, I will certainly post the results here. Should be just a few days now.

  6. Elemental Web Solutions April 24, 2013 at 1:50 pm #

    Thanks for the post. Really good article.

    Do you know if its still a problem that Rand is not the primary currency?

    Paypal is great in that it can offer a whole variety of other payment options such as reoccuring billing etc…which alot of the South African gateways aren’t offering.

    • Ignatius Vermaak May 13, 2013 at 5:10 pm #

      At this stage there are still too many hoops PayPal would need to jump through before they support the Rand.

      Recurring billing is a feature that many people need, MyGate supports this in SA, but at this stage the extension doesn’t support this for WooCommerce yet.

      I’ve asked WooThemes for advise on this, hopefully there is a solution that we can feature here.

      Thanks for your comment :)