In a first for South Africa, online payment gateway providers Payfast have introduced a new “Split Payments” option, that will allow merchants with platform-based businesses, such as online marketplaces, the ability to automatically split any payment into specified percentages and pay the relevant percentage to the specified parties.
According to Payfast’s Managing Director Jonathan Smit, they felt that the growing platform economy in South Africa was being “hampered by payment inefficiencies.”
This solution is intended to facilitate the potential growth of the platform-based model.
The term “Platform-based ecommerce” or “online marketplace” refers to a type of ecommerce site where multiple 3rd-parties provide products or services, and transactions are processed by the marketplace operator.
The orders themselves are usually fulfilled by the participating retailer, although sometimes the operator manages stock and delivery.
This can be a practical model for smaller businesses in Africa, as it is not then necessary to build or purchase your own digital infrastructure, making an ecommerce offering more attainable for those businesses.
According to the Payfast MD, “Whether you run a marketplace that brings together multiple sellers or you’re a merchant looking for new sales channels, Split Payments solves your payment headaches with one, simple API integration.”
Instantly split out commission, membership or listing fees as a fixed amount, a percentage, or a combination of the two whenever a payment is made via one of Payfast’s supported payment methods, which include cheque and credit card transactions, instant EFT, Mobicred, Zapper, Masterpass, SCode and debit cards.