On 1st May 2009 Bob Shop introduced bobPay – EFT, a way for buyers to conveniently pay sellers using standard EFT (Internet banking) from any South African bank with fast confirmation by Bob Shop.

bobshop already has a system in place to accept credit card payments from buyers with Visa, MasterCard, Diners and American Express credit cards on behalf of sellers. This system is called bobPay - Credit Card. Sellers who want to accept credit card payments from buyers through the Bob Shop system have to be approved as bobshop Verified Users and can then activate the bobPay - Credit Card payment option in their payment options in My Bob Shop. Sellers have the option to accept or reject each credit card payment.  Once accepted, these funds are credited to the seller’s Bob Shop account.  Sellers can request a pay out of the credit balance in their Bob Shop account at any time.  This credit will be transferred to their South African bank account.

While credit cards are the most convenient way for buyers to pay for goods online (assuming they have a credit card); for sellers, there are a number of considerations when accepting credit card payments. Not least of these are the bank charges involved (bobPay – Credit Card costs an additional 5% on a per transaction basis) coupled with the risk of charge backs. The seller ultimately takes the risk for reversal of the transaction in case the credit card was used fraudulently (a charge back can take place up to 90 days after the transaction).

With these concerns highlighted around the use of credit cards and the increase in the number of South Africans gaining access to Internet banking, it is no surprise that the most popular method of payment on Bob Shop is EFT (Internet banking). The main advantages for sellers are that there is near to no risk of charge backs and the bank costs are significantly lower. It is also ironic that many consumers actually tend to feel safer making a payment by EFT as they feel more in control compared to credit cards where they (erroneously in most cases) feel concerned about their credit card details becoming compromised.

EFT however does not come without inconveniences such as the up to two day waiting period for funds to be cleared when the payer and receiver bank with different banks (which happens approximately 75% of the time for those banking with one of the big four banks in South Africa). EFT can also be problematic in that it requires manual reconciliation and sometimes payers use references that make their payment impossible to match with their purchase (a problem compounded by the different terminology presented by each bank to payers when making EFT payments).

bobshop has launched a beta version of bobPay - EFT, which goes a long way to address many of the existing shortfalls of receiving payments for sales on Bob Shop via EFT. bobPay – EFT is available to all sellers provided they can receive pay out requests into a South African bank account.  Bob Shop has opened bank accounts with each of the major South African banks (Absa, FNB, Standard Bank and Nedbank) thereby allowing payers to select the bank they would like to make payments into, thus eliminating the usual delay for payments made between different banks. In order to further streamline the process payers are provided with payment instructions customised to the bank they are paying from. Bob Shop has also implemented a system to reconcile the payments received and in most cases both the buyer and seller are notified of receipt of the payment within half an hour of the payment being made.

Upon completing an order through the Bob Shop system, if a buyer indicates they intend to pay using bobPay – EFT, the status of the payment on the order is set to “Awaiting EFT Payment”. Once payment has been received the buyer and the seller is notified and the status is set to “Payment Completed”. Sellers are advised not to ship goods until payment has been completed ; “Awaiting EFT Payment” is not a guarantee that the payment has been received. Once payment has been received, as with bobPay – Credit Card the amount received is credited to the seller’s Bob Shop account and the seller can request a pay out of the credit balance to their South African bank account of choice at any time (pay out requests received before 9am on a business day are processed on the same day).

The advantages of using bobPay- EFT for sellers include:

1. No high credit card processing charges (while bobPay – EFT is in beta there will be no charge for the service. In future, it may however be necessary to charge a nominal fee for this service due to the bank charges and admin overheads required to run the system).
2. No risk of charge backs as is the case with credit cards.
3. Automatic reconciliation of payments received (an email notification is sent to the buyer and the seller once payment has been received, and the payment status of the order on the Bob Shop system is set to”Payment Completed” so the seller can ship the goods knowing that the funds have been received).
4. Speedy confirmation of payment if the buyer pays via EFT from one of the big four banks.

In summary Bob Shop recommends that sellers set their payment options as follows:

1. bobPay – EFT. In order to avoid any possible confusion for buyers it is recommended that bobPay – EFT is the only method of payment offered to accept payment by EFT i.e. if you offer bobPay - EFT do not include EFT as one of the payment options for buyers in your “Other” payment methods.
2. bobPay – Credit Card. Assuming you are willing to take the risk of charge backs, credit cards are still considered the most convenient way of paying for goods online and if at all possible this option should be offered to buyers. In order to accept bobPay – Credit Card payments you will however need to become a Verified User.
3. Other Payment Options. It is recommended that other payment options are limited to “cash deposit”, “cheque” etc. assuming you are willing to accept these additional methods of payment. In order to encourage buyers to pay via one of the online payment methods, do not include your banking details in your post sales note, rather, include a message in the post sales note such as: “Contact seller to arrange for payment via cash deposit, cheque, or money order”