Internet | PayPal arrives in South Africa

By Anna Malczyk

You may have heard about PayPal in the local news recently, because First National Bank has finally made the service available to South Africans. What’s all the fuss about? Should you be using PayPal?

About Paypal
Essentially, PayPal is a service that allows you to transfer and receive money online. It can be used whenever you want to buy goods from an online store, or if you want to pay somebody overseas for a service rendered – or vice versa, if employers and buyers want to pay you. It works very much like a virtual bank account: you store money in it, you can use that money to pay for online goods and services, and others can deposit money into it for any goods or services they purchase from you.

Benefits of Paypal
The greatest benefit of PayPal over a real bank account or credit card, however, is that you never have to share your sensitive banking information with anyone. You simply give them the details of your PayPal account, and the secure system takes it from there. You never have to reveal your information, and you also don’t have to deal with fiddly things like bank account numbers or credit card verification. It streamlines the entire online transaction process by making checkout and payment at an online store quicker and safer.

Who can use Paypal?
At the moment, only people who have FNB accounts can make use of PayPal in this way. Also, not every store or service provider accepts PayPal payments, and the service is only available in selected countries worldwide. PayPal has often been criticised for its confusing terms of use, unclear range of services and its potential security loopholes. However, over 200 million people use PayPal every day to send and receive money, so there is a wide market for the service.

What can you do with PayPal?
If you enjoy online shopping, you can pay through a PayPal account as an alternative to using a credit card. Some of the best places to shop are online auction service eBay, or the local equivalent, Bidorbuy. If you have your own online store, or if you provide a service that you market online, you can give customers the option of paying through PayPal – provided that you have an FNB bank account. PayPal accounts come in two variations – personal and business – so the one you choose will depend on your reason for using the service. Also, don’t get caught out by the fees: both PayPal and FNB charge fees equal to small percentages of your transaction. You can get more information at www.paypal.com.

PayPal is not for everyone, and the service is still in its infancy in South Africa. It would be worthwhile to wait and see how many local online stores offer this service to customers in future.

Anna Malczyk is the communications executive at GetSmarter.

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