US-based payment processing firm PayPal this morning arrived in SA, after First National Bank (FNB) inked a deal with the global company.
The official launch of PayPal, shortly before the Fifa Soccer World Cup, allows South Africans to transact with 81 million PayPal account-holders, in 190 markets around the world.
FNB CEO Michael Jordaan says: “We are especially pleased to make this announcement on the eve of the 2010 Fifa World Cup.” He says the deal will enable South Africans to join the global e-commerce market.
Jordaan was speaking at a well-attended media event, in Johannesburg's Newtown, this morning.
The service is limited to FNB account-holders, who can open a PayPal account, link it to their FNB account and receive payments in 21 different currencies.
Jordaan explains that South Africans can “make payments and receive money internationally, without sharing their personal information”. FNB then converts that payment into rands.
Oded Zehavi, who heads up PayPal's business in SA and Israel, says: “With SA's solid financial infrastructure and its status as the continent's largest economy, we're optimistic about the future of e-commerce in the market and look forward to working with FNB on opportunities ahead.”
Open door
Steven Ambrose, MD of World Wide Worx Strategy, says the deal is a “big step for South African commerce”. He explains it will make it easier for thousands of vendors, curio sellers and hospitality companies to accept payment in a foreign currency.
He explains that international tourists and shoppers may previously have been concerned about divulging their credit card details over the Internet to pay for South African goods and services. The agreement removes this worry as PayPal is a trusted global payment provider, Ambrose notes.
“This is another brick in the wall of normalising SA's entry into global commerce,” Ambrose notes. He says the deal was put together quickly, which will allow FNB to take advantage of the anticipated 350 000 tourists entering the country for the Soccer World Cup in mid-year.
However, there are limitations, such as the international provider's services only being available to FNB customers, and the fact that it will not be available on mobile devices yet, he adds.
Despite this, SA's Internet population is growing. Recent World Wide Worx research shows the number of South Africans with access to the Internet had grown 15%, to 5.3 million users in 2009, and it expects a similar growth rate for 2010. Almost 11 million South Africans are expected to be online by 2015.
Ambrose comments that, with the anticipated growth of people moving online, PayPal's entry into SA “makes sense”.
Burst bubble
News first emerged that PayPal was coming to SA last month, with Tweets flying around about the launch expected in April.
Initially, FNB would not officially confirm the rumours, but later relented and admitted it was in talks with the US-based payment processing company a few days after the first Tweets. That news was followed by an invitation to the official launch this morning.
The leak on Twitter seemed to have come from someone who claimed to be a supplier for the project, who Tweeted: “PayPal is launching in SA in April through FNB.”
An FNB executive confirmed the news through Twitter, saying: “Can anyone say 'cat out of bag'?”, and “It's true - but I wasn't going to put a public launch date on it.”
Banking laws require PayPal to either successfully apply for a banking licence in SA, or join forces with a local bank. The partnership with FNB will allow South Africans to be paid by international consumers through PayPal, without breaking foreign exchange laws.
PayPal is located in San Jose, California, and was founded in 1998, before being bought out by online retailer eBay in 2002.
Share