Over the last few years I've seen some brilliant local startups, though few have been able to monetize their ventures to it's full potential. Personally, this is the exciting part of starting an online company... the "How is it going to make money" part.

Monetization in regards to an online startup plays a key role in securing an investment as most VC's will not always see your vision, nor understand your target market and how it applies. If you plan on making money through mere advertising (without having an advertising model), think again and start discussing.

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I think there are plenty of models out there, from donation-ware to microtransactions (mainly thinking content businesses, because that's what I know) that are mildly hamstrung in SA. A nice step-by-step tutorial to get people a payment processor might even the playing field a little compared to zero-cost startups internationally.

I saw a start at something like that a few threads back... I really doubt that I need to explain how frustrating it is to have content and keep hearing people telling you that the thing you're struggling with is easy. If it's "easy", people would be doing it by now! It's the worst feeling in the world watching someone else become the first mover in a market simply because they happen to live in a country that any idiot can accept credit card payments in.

That brings me to another point: Why hasn't this obvious lack been monetised yet? Even the traditional local card authorisers don't seem to realise the wins they could make through having a simple to set up and easy to use system that deferred costs until actual use instead of trying to milk revenue out of users that can't afford to pay to enable their initial 3 transactions a month. Those 3 will never grow into 3000 if they're nipped in the bud.
Have you taken a look at: http://www.2checkout.com/campaigns/sa/

They have a South African specific offering, currently on promotion waiving the $49 sign-up fee.
Moneybookers www.moneybookers.com is also an option for accepting credit card payments. There are some limitations, but there transactional fees are very low (starting at 2.9%) compared to local credit card payment gateways and there's zero setup costs. The account can be funded from your South African bank account with zero fees as well, and withdrawing money to a Visa credit card has a fixed-charge of 1.8 Euros. Another plus is that it doesn't require you to have a merchant account with any of the local banks.

Is anyone here using them? If so, are there any potential pitfalls in dealing with them?
@Rory: We've had a Moneybookers account for a while now, prepping for a possible product launch - which is a tad outside our usual area, hence hemming and hawing on it - the only issue I've heard regarding them for local use is not charging in Rands.

@Justin: Thanks for the link, good to see a payment processor specifically targeting SA issues like that! Will sign up with them and evaluate once I've seen what their checkout process is like.
No offense Neil, but how is Frulo supposed to help zero-cost startups when you still require people to go through the whole merchant account/local authoriser gateway schpiel? That's the barrier that's killing content-based business ideas that would otherwise work outside of SA.

Realise you're aiming for a specific segment of the online monetisation market, but it's still not exactly extremely user friendly ;)

Neil Henegan said:
Take a look at frulo.co.za
Its a fairly straight forward plug and play system for subscription payments and supports multiple plans, upgrading, downgrading ( Saas model )
If you're interested give me a shout, we're happy to help implementit and develop wrappers, plugins etc for any project you're working on.


We don't support multiple currencies at the moment but that will change in the next 30-60 days.
Sounds to me that any service that undercuts that ease of doing business thing would reap some pretty hefty rewards. People don't want to have to jump through hoops, they want the sort of services that others enjoy elsewhere... That's a rather obvious opportunity, right there ;)

I've done the whole "Hi Mr Bank Manager" thing, 3 times now. Don't qualify. Mainly due to not wanting any form of real-world merchant support: What good is a card machine to me? People just didn't seem to understand an online-only business model, you're supposed to transition to the web once you've established yourself as a physical merchant. Perhaps something like Silicon Cape can change that attitude, but I'm tired of watching bank managers turn blue as soon as the words "credit card" and "internet" share a paragraph.

If there ARE banking types out there that can and do understand online businesses, they should be part of this tutorial we're talking about. I've got a queue of people that would want to talk to them!

Neil Henegan said:
Danny,
We don't have a very good Ease of Doing Business Index and I don't suspect it'll change anytime soon. Take a well written business plan to your bank and they'll help you with the merchant process. Its more about following the correct procedures and paperwork than anything else.

I'll look into writing a step by step guide to getting a merchant account/gateway setup.
Danny,

Personally I've had not much trouble getting a Nedbank/iVeri merchant account/online-only credit card system going.

Cheers,
J
In the spirit of tutorials: What did you do? Where did you go? What awesome paperwork were you armed with? etc. ;)

Justin Stanford said:
Danny,

Personally I've had not much trouble getting a Nedbank/iVeri merchant account/online-only credit card system going.

Cheers,
J
Danny, to be honest I can't really remember the details, it was like 8 years ago with one of my first startups. I remember there being a bit of bank paperwork but that's it. Check out http://www.iveri.co.za/index.php?option=com_content&view=sectio... - the eCommerce section. So far as I recall iVeri is part of Nedbank, and at the time we banked with Nedbank, so we just initiated the process through them.
Hi guys, check out www.netcash.co.za too. All you need is a business bank account and they do the rest - from credit card merchant services to debit orders. Been using them for a while - great service!
Hi Allister,

We only use Netcash for http://www.mytrade.co.za - their service is incredible and they have the most insane programmers ever! We have them on direct contact through Skype, so we never have to wait hours for service.

On top of all, we have managed to fully automate the payment processes ie. monthly and daily debit orders, credit card payments etc. In conjunction with their developers, we managed to pilot the first ever completely automated credit vetting process, invoicing, credit card payments + debit processing in SA.

In short, Mytrade.co.za fully manages itself... all we provide is support to our users, work on marketing and receive payments from Netcash about twice a week while sitting at some beach bar with summer slops and WiFi (who says all Startup's need to be from a garage)!!!

Big up to Netcash!

Allister Kreft said:
Hi guys, check out www.netcash.co.za too. All you need is a business bank account and they do the rest - from credit card merchant services to debit orders. Been using them for a while - great service!
Hi Danni

Just got a merchant account for a brand new online startup using my own details as credit reference within one week from Nedbank. However, the monthly costs are high, but at this stage I needed to get going and will now re-look at other options that I have read about here.

Danny Day said:
Sounds to me that any service that undercuts that ease of doing business thing would reap some pretty hefty rewards. People don't want to have to jump through hoops, they want the sort of services that others enjoy elsewhere... That's a rather obvious opportunity, right there ;)

I've done the whole "Hi Mr Bank Manager" thing, 3 times now. Don't qualify. Mainly due to not wanting any form of real-world merchant support: What good is a card machine to me? People just didn't seem to understand an online-only business model, you're supposed to transition to the web once you've established yourself as a physical merchant. Perhaps something like Silicon Cape can change that attitude, but I'm tired of watching bank managers turn blue as soon as the words "credit card" and "internet" share a paragraph.

If there ARE banking types out there that can and do understand online businesses, they should be part of this tutorial we're talking about. I've got a queue of people that would want to talk to them!

Neil Henegan said:
Danny,
We don't have a very good Ease of Doing Business Index and I don't suspect it'll change anytime soon. Take a well written business plan to your bank and they'll help you with the merchant process. Its more about following the correct procedures and paperwork than anything else.

I'll look into writing a step by step guide to getting a merchant account/gateway setup.

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