Official Statement – FNB and PayPal in South Africa
Everyone has been talking about PayPal in South Africa and more recently about FNB and PayPal bringing PayPal to South Africa teaming up.
Today, Virginia Magapatona, head of corporate communications at First National Bank, confirmed that FNB is in discussions with PayPal and the South African Reserve Bank and that further information will be released in due course.
This is an exciting time for South Africans, gaining access to PayPal will open up a huge number of doors and not to forgot the introduction of a huge amount of fresh money into our economy!
I’ll keep you all posted!
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About the author:
Christopher is the founder of iMod - Most of his time is spent building websites and pushing the limits with Search Engine Optimization. You can follow him on Twitter @ChristopherM
Chris M has written: 4768 posts.
Christopher is the founder of iMod - Most of his time is spent building websites and pushing the limits with Search Engine Optimization. You can follow him on Twitter @ChristopherM
Chris M has written: 4768 posts.
Feb 11th, 2010 at 1:30 pm
best news i’ve heard all decade.
Feb 11th, 2010 at 1:35 pm
Hell ye MarkB, if FNB pull this off, wow!
You with FNB?
Feb 11th, 2010 at 1:37 pm
Very exciting time. Every now and then something comes along which gives you hope that steps are being taken to move SA further into the global economy.
You read about things like this and you know tht you are heading in the right direction.
Great stuff and kudos to FNB for getting this right. A lot of the other banks have talked a good game about supporting SME’s but these guys are actually hit up on the technology that will make a day to day dfference in their lives.
Feb 11th, 2010 at 1:46 pm
Marc, I couldn’t agree more, this does give hope and also makes for some pretty incredible times ahead. South Africa has some of the most innovative and talented web junkies around, the possibilities are endless and I’d kill to see what things pop up if this all goes to plan!
Feb 11th, 2010 at 2:50 pm
This is a bit like the curate’s egg – good in parts. Of course it all depends on the arrangements, but since at least two SA banks are involved I expect there to be a sting in the tail.
Firstly, no problems for internal SA to SA trade in rand, except of course I expect there to be “fees” for withdrawing cash from the Paypal account into your SA bank account. If you have an overseas purchaser buying your stuff and paying in foreign currency, then you will be stiffed on the exchange rate, plus additional “fees” for carrying out the conversion when it hits your SA bank account. Unless of course Paypal are allowed to make the coversion.
The next issue is that of rand purchases from overseas merchants. Firstly, will the Reserve Bank allow it using a SA Paypal account? Under current forex regulations, no, or at least only up to a certain amount, and in all cases involving hoboes of documentation and approvals.
There may be an announcement removing or easing exchange control in the Budget in March, but there may not.
Next our beloved SARS. If you have money coming into your Paypal account, they will want to know where it comes from and whether you need to pay income tax on it. If you buy overseas and import stuff, even electronically, there are duties and levies, principally VAT due, and SARS will want their cut.
FNB will have reporting requirements to SARS, so it might be difficult to avoid income tax, duties and levies on electronic transactions as many people do now. The logical thing to do is to have the Paypal gateway at FNB, who are then required to levy VAT and duties. All this implies “fees”.
The per-transaction costs may be too much for a small business to bear.
So, while it may well be “A Good Thing”, I am waiting to read the fine print very carefully. If a bank is involved, you can bet your bottom dollar that they are in it to make money, not as a benevolent gesture to you.
Feb 11th, 2010 at 8:57 pm
Ye Iain, of course there will be some fine print, I have no doubt about that and I’m sure we’ll pay decent fees on withdrawing money, but I still maintain that it’ll be a great addiction to the South African web toolkit :)
Feb 11th, 2010 at 10:40 pm
Iain – I think you are looking at it wrong. This is probably going to come across as a bit of an idealist view but shoot me for being an optimist….
Bank charges and taxes are part and parcel of life.
Let’s say that PayPal allows 100 new sustainable SMEs to be created in SA. These businesses on average employ 2 people somewhere in their process. Of those that are created 1 is for one of your kids (dunno if you have but let’s assume) and your best mate.
The 200 people including your child and your best mate are not complaining about taxes and bank fees eating into their margins. They’re grateful for a job and the technology which has ENABLED them to reach into the global economy / marketplace.
The big 4 banks may not have covered themselves in glory but they don’t score from no entrepreneurial / small business culture being established. In the grand scheme of the FirstRand Group / First National Bank, the fees generated by PayPal won’t even register as 1% of direct turnover, but it will facilitate the other kinds of business where they can make their cut.
Feb 12th, 2010 at 7:42 am
Great News
Hope that the other local banks catch onto this aswell. Do we know if there are any other local banks that are looking into PayPay? would be great if the other 3 also were involved in the process.
Been waiting along time for this to happen, I can see millions of dollars pouring into the country as SA has alot to offer the web community.
Feb 12th, 2010 at 10:26 am
@Chris: The words decent doesn’t belong in the same sentence when applied to bank charges. In an International context, SA banks charge too much for things they shouldn’t be charging for in the first place. That’s why there is (or at least was until the crunch) so much interest expressed by foreign banks in buying up local banks. The local bank margins are so much higher.
@Marc: I am looking at it from the perspective of developing an online business selling electronic stuff, software, ebooks, videos and so-on. My market is worldwide, and so is my competition. The differentiator between me and someone elsewhere is the ease of completing the purchase, and of course the price.
PayPal will certainly help with completing the purchase by offering a trusted and well known world-wide payment portal.
Where I not so sure is the costs associated with using it. Fees need to be factored into sales prices, and that is where the whole thing might come crashing down.
SMEs need to recover the PayPal and bank charges and if these make the cost of doing business and hence the product cost too high, customers will move to another site that offers the same or equivalent stuff for less.
As an aside, do you know how much tax you actually pay ? For the 6 Million PAYE taxpayers who support the other 46 Million Saffers, just take the marginal tax rate and double it to find how much of your hard-earned finds its way back to the various tiers of government.
PAYE, VAT, municipal rates and taxes, fuel levies, sin taxes and the myriad of other small imposts we suffer. Just add then up and you won’t be far off 75% if you are a 40% taxpayer.
SA is one of the most heavily taxed countries in the world.
Aside over, other than to say from an SME prospect, all that needs to be factored into product pricing.
Obviously, it’s far too early to speculate, but given the banks track record in levying “fees” I don’t want to start jumping with joy yet.
@Wayne: I certainly hope squillions of rand come pouring in. I also hope that a fair bit of it comes my way.
Feb 12th, 2010 at 10:31 am
One other point, the adminstrative burden of compliance. I said in my original post the the heavy hands of the Reserve Bank and SARS will be evident.
SME businesses will now need to prepare and submit VAT returns, paperwork to support overseas purchases, and any other bank inspired bureaucracy. Annual returns and accounts to SARS are another issue altogether.
Most small SME entrepreneurs won’t have the skills and indeed the time to do all this.
They will therefore need a bookeeping service, an additional cost to the business.
Think about the implications of that in margins and product pricing.
Feb 12th, 2010 at 7:10 pm
AWESOME!
I think that this will really be a step in the right direction for South Africa and the growth of our online markets.
Thanks for the news, now lets all just hope that it happens.
Feb 22nd, 2010 at 9:24 am
This step will greatly contribute to effective global e-commerce in South Africa and potentially benefit our economy. I believe that the lack of full PayPal functionality is the one major drawback for South Africans doing business online
Mar 11th, 2010 at 7:02 pm
Chris, how credible is your source? What is your source? Did you call them?
Mar 11th, 2010 at 7:32 pm
Here’s some more news – http://imod.co.za/index.php/2010/03/11/how-did-silicon-cape-miss-this/
Mar 12th, 2010 at 1:16 am
at bloody last :)
thanks for bringing this to our attention dude!
Mar 12th, 2010 at 1:24 am
It’s my pleasure, just stoked to see people showing so much interest around the topic; Us saffers really need PayPal at our finger tips, imagine the possibilities!
Mar 12th, 2010 at 4:41 am
Hi Folks,
I’ve created a Facebook Page so we can all collab in one area easily and round up the troops – http://www.facebook.com/pages/PayPal-South-Africa/388473619362
Come and chat :)
Mar 15th, 2010 at 10:58 am
First signs of PayPal being integrated with FNB – http://imod.co.za/index.php/2010/03/15/fnb-integrating-paypal-into-their-online-banking/
Mar 25th, 2010 at 3:39 pm
For those of you who have been following, here’s the latest information – http://imod.co.za/index.php/2010/03/25/is-paypal-south-africa-everything-we-hoped-for/
Apr 16th, 2010 at 12:16 am
For those following, here’s how I linked my account successfully:
http://imod.co.za/index.php/2010/04/16/south-african-paypal-account-verified/