The key to e-commerce growth in South Africa comes down to user experience

“Credit cards are still the most popular way to pay online, but it’s not always as easy as it should be,” says PayGate’s head of client services, Robin Philip. “At a recent think tank we held for executives from most of the country’s leading online enterprises, we heard that the online payment experience is still too awkward and difficult for many customers.”

The 3D Secure system was singled out as an area for improvement, says Philip. “3D Secure is a great idea to protect credit card holders by requiring an extra password at checkout,” he says. “But at the moment it’s not being implemented as well as it could be. Different banks have different screens, the system is not always explained properly and there are several different ways of issuing PINs. This lack of co-ordination makes consumers suspicious, and everybody is seeing high dropout rates at this point in their checkout process. Fixing this would do a lot to boost online commerce in general.”

Other popular payment methods include PayD for debit cards, and automated electronic funds transfers (EFTs) via services like SID and Payfast. “There are some other methods that have promise, but they’re either dollar-based with a low user base in South Africa, or restricted to a single bank,” says Philip. “All of them still need work to improve the checkout experience.”

In general, says Philip, merchants told PayGate that more could be done to create consumer awareness of the different ways to pay online, and to increase trust in these methods.

“One exciting development is the increasing number of cheque cards that are being issued,” he says. “These are effectively credit cards with a zero credit limit. Unlike debit cards, which take a lot of behind-the-scenes effort to work as an online payment method, cheque cards are very easy and convenient to use. They’re a great option for consumers who don’t want to take on debt or don’t qualify for credit.”

“There is a core group of local credit card holders who’ve been doing online commerce for years and are completely comfortable with it,” concludes Philip. “But e-commerce will only really take off when we succeed in making it available to a much broader market – and that is going to take a lot of work by the banks, card associations, merchants and payment service providers to make our payment systems simple, reliable and trustworthy.”