The COVID-19 pandemic has leapfrogged the adoption of eCommerce in South Africa. This has lead to a boom in the adoption of payment gateways across South Africa.
The eCommerce industry has been the driving force behind this growth. In fact, gateways are the fastest growing part of the payments industry’s value chain, according to a recent report by Mercator Advisory Group.
“Ecommerce has been the driving force in the rise of gateways. These firms are lean and nimble, with the DNA of fintechs,” commented Raymond Pucci, Director at Mercator Advisory Group.
And as the global eCommerce volume continues to rise, Business Insider expects payment gateway profits to increase to $138 billion in 2024.
Global Growth of Payment Gateways
The gateway market worldwide is expected to grow by a projected US$45.6 Billion.
PayPal expects to add 70 million customers to its digital payment platform in 2020 due to the pandemic. To put that into perspective, that’s nearly as many customers as PayPal added between 2017 and 2019.
Similarly, gateways of all kinds are seeing massive growth on a local level. Online payment gateway PayFast reported a 226% year-on-year increase. While electronic payments platform Peach Payments, reported a 400% growth in monthly customer acquisitions. Buy now pay later platform Payflex has experienced a 40% increase in merchant sign-ups since March, and 35% increase in user sign-ups.
Bright future
In conclusion, the Coronavirus pandemic has represented a turning point for the South African and global payment gateway market. Moreover, as merchants look to capitalise on the rise of eCommerce, offering multiple gateways will become essential for business continuity. Especially as consumers demand more choice, transparency and flexibility when checking out.
