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Accept Bitcoin payments with PayFast

Note: PayFast no longer supports Bitcoin payments as of 20 July 2019. You can read more about why PayFast ended support for Bitcoin.

Starting today, PayFast sellers can start accepting Bitcoin payments from local and international buyers. Note that Bitcoin payments are currently in beta testing mode.

Bitcoin on PayFast

PayFast entered into an exciting partnership with South Africa’s biggest Bitcoin exchange, Luno (previously known as BitX), which will allow buyers to make Bitcoin payments to PayFast sellers.

What makes this different from most Bitcoin platforms/transactions, is that while buyers will make a Bitcoin payment, sellers will receive South African rand in their PayFast accounts (and then, bank accounts).

What is Bitcoin

Simply put, Bitcoin is an innovative digital payment method, performed over the peer-to-peer Bitcoin network.

For a more thorough explanation, you can read this.

How can buyers receive and save Bitcoin?

Bitcoin can be obtained in one of three ways:

  • “mining” for it
  • buying it from an exchange
  • receiving it in a Bitcoin transaction

The bitcoin is then stored in a Bitcoin wallet. Bitcoin wallets don’t cost anything and can be opened up by anyone, usually in under a minute.

Mining

mineThere is a predictable amount of bitcoin in circulation and a limited amount is released over time. Newly released bitcoins are retrieved and Bitcoin transactions are confirmed by computers all over the world, in processes known as “mining”.

Since it takes a certain amount of know-how, operating power and electricity, mining is generally the most complicated way for the average person to get Bitcoin.

Buying

buyThere are Bitcoin exchanges in countries all over the world. Luno (previously known as BitX) is South Africa’s biggest Bitcoin exchange and anybody with a verified Luno account can purchase Bitcoin, simply by making an EFT to their account and buying it at the latest rate of exchange.

Receive

p2pAnybody who has Bitcoin in a Bitcoin wallet can send it to anybody else –anywhere in the world— provided that the recipient also has a Bitcoin wallet.

Advantages

There are numerous advantages to accepting and using Bitcoin:

  • It can be much cheaper to accept Bitcoin than other international payment methods
  • Transactions are not subject to reversals or costly chargebacks
  • Payments can be sent and received from almost anywhere in the world
  • It is fast (particularly compared to international bank transfers)

Disadvantages

It’s often mentioned that the Bitcoin rate of exchange is very volatile. It’s all rather logical, since it is determined by the market, which collectively “decides” what the value of it should be. This is very much the same way that the market collectively and continuously decides what the price of other resources, like platinum or gold or currencies, should be.

Herein lies the biggest problem for sellers: volatility. If a seller listed a product on their website for 1 BTC (at an exchange rate of R6900) and someone purchased that item at a later date, when the rate of exchange is lower (say R6000), they would ultimately lose out on the transaction (or have some explaining to do to their accountant).

Sure, the seller would have 1 BTC in their possession, but that single bitcoin might be worth less than what the product originally cost.

How PayFast/Luno (previoulsy known as BitX) solves this

In short: sellers don’t receive Bitcoin, so regardless of the BTC/ZAR exchange rate, they will receive the South African rand amount for their payments.

A step-by-step explanation

Checkout step 1

PayFast sellers will still display their products and services in South African rand, as they always have.

Checkout step 2

When a buyer visits a PayFast seller’s site and clicks to buy an item, they will be shown Bitcoin as  a payment method (in addition to the other enabled payment methods).

Checkout step 3

The buyer is shown the BTC amount –at the current rate of exchange as provided by Luno (previoulsy known as BitX) — and a Bitcoin address where they should send the funds.

Checkout step 4

After sending the funds (using whichever Bitcoin wallet they want to: mobile, desktop or cloud), they click on a verification button on the PayFast engine.

Checkout step 5

Luno (previoulsy known as BitX) sends confirmation to PayFast that the funds have been received.

The buyer sees a success message and gets redirected back to the seller’s website. The seller will receive a notification from PayFast stating that a payment has been received.

Checkout step 6

As for all supported payment methods, the amount will immediately reflect on the seller’s PayFast account in ZAR (minus our nominal fee).

How to enable Bitcoin payments on your account

Sellers simply need a verified PayFast account.

Opening a PayFast account is instant and free and the verification process is usually completed in under eight business hours. Log in to your PayFast account, navigate to Settings and click to enable Bitcoin (or any other supported payment methods).

If you have a PayFast account, but you’re not sure if it can receive payments or if it is verified, simply log in and click on the Account tab.

That’s it, nothing else is needed!

Note: as a seller, you don’t need a Bitcoin wallet, you won’t receive Bitcoin and you don’t even need to understand Bitcoin (but it surely helps) 😉 Simply know that with it enabled on your account, you’ll enable buyers to pay you from anywhere in the world using one of the most exciting new payment methods available.

Comment below or if you have specific support questions, reach out to our friendly Support Team.

21 thoughts on “Accept Bitcoin payments with PayFast”

  1. Fantastic news. Well done on this coup. You’re well ahead of the other payment gateways in South Africa…

  2. While I believe this is great news for Bitcoin, I do question the transaction fee. It just seems contrary to the whole idea of Bitcoin (IMO).

  3. Hey Doug,

    You raise a valid point there.

    The main difference between receiving Bitcoin payments using PayFast (as opposed to receiving the actual bitcoins) is that the funds immediately reflects in ZAR. In addition to that the system also automatically enables you to sell via the +-60 supported shopping cart systems, you enjoy account reporting, dedicated support (as seller or for your buyers to talk to someone when they get stuck) and a whole lot more.

    We always aim to add value with our services and we’re really not out to make a quick buck on this one 😉

    Bitcoin is also wonderfully open. Some sellers might prefer to do their own integration, conversion, reporting and support, but I think for the vast majority of our customers it is a justifiable fee, considering all the added value.

    Thanks again for sharing your thoughts, we read each of these comments!

  4. Great stuff! The fee is not a big deal if you consider its converted to ZAR, although I reckon it could be a little less…arent the costs to payfast going to be considerably less than if people use credit cards? Maybe you can pass more of that onto the vendor?

  5. Yep, the costs to process Bitcoin is a little lower, but the system-wide cost (account verification, built-in fraud screening/prevention, support etc.) is more or less the same across the board. These are still very early days; we’ll continuously evaluate on how to make things better and more accessible.

  6. As a buyer, what exchange rate is used to determine the price in Bitcoins? Is there a percentage being added to the price?

  7. Hey Rynardt,

    The exchange rate is determined by the BitX exchange, but it is guaranteed for the five minutes needed to complete checkout. So, at the time of purchase, it should be more-or-less the exact amount that was shown in the shopping cart (without BitX levying a fee/percentage to the buyer).

    If you have any other questions with regards to conversion-process, point them to support@bitx.co.za (I’ll be sure that they are kept in the loop with queries to us on the blog and elsewhere, too).

    Cheers!

  8. Greg, with PayFast all payment methods processed (Bitcoin or otherwise) will reflect in South African rand.

    It is technically possible to build the acceptance of Bitcoin –not the converted ZAR amount– into your website by yourself (depending on the site, cart features and if it is self/cloud-hosted), but this obviously falls outside the scope of our services 😉

  9. Well done guys, this is fantastic news and I’m sure the whole Bitcoin community in SA appreciates the fact that opening the market up to 30 000 plus merchants means we have so many more options now where to spend our Bitcoins.

  10. When can my employer start paying my salary into my PayFast account? And collaborations with other banks for ATM access and swiping at retail stores.

  11. We have no immediate plans to go into physical retail. Also, PayFast isn’t a bank but an eCommerce payments solution; all funds received must be linked to/transferred to a South African bank account.

  12. PayFast, well done for taking the first step!! I have made a number of Bitcoin payments already on several stores with your facility. Works great!

    When will you allow more that a R5000 Bitcoin transaction?

  13. Hey Chris, thanks for the feedback and happy to hear that Bitcoin is working nicely for you! We’re continuously evaluating things with regards to usability, consumer protection, fraud prevention and the like; some of the reasons why we have limits in place. Individual sellers can, in the interim, contact us should they want the limits lifted to a higher amount (either store-wide or for a specific transaction). Thanks again for the feedback!

  14. I am grateful for the BTC integration provided in PayFast, and have seen already been used by a number of customers.

    Question – I had requests from clients wanting to enable donations via their websites – will it be possible to link the Donation button to the PayFast BTC address assigned to the client’s PayFast account (converting it to ZAR)?

    If so, can PayFast provide me with the BTC address and will the BTC address stay consistent? I could initiate a BTC transaction to lookup the BTC address, but prefer guidance on this matter from PayFast.

    Keep up the good work and innovations.

  15. Hey Jaco!

    Just a headsup: with PayFast (or with any online payments in South Africa, to be precise) donations can only be processed for charities. All other accounts, individuals & charities, have to –by law– provide goods or services in exchange for the payment.

    Also, the Bitcoin address provided on PayFast might change from time to time (when the buyer/donor makes payment).

    That said, if you want a static Bitcoin address, all that you (or your clients) would need to do would be to create a Bitcoin wallet with BitX. You can get up and running with that in a matter of minutes, but obviously it will fall outside our services (it would be similar to listing your bank account details for deposits, which you’d have to manage by yourself).

    Hope this provided some insight? Thanks a bunch for your feedback!

  16. Awesome. I need a system where someone pays Rand and it is immediately converted to BTC. Do you have such a service?

  17. Nope, unfortunately not. The only way to get Bitcoin with rand online is to use an exchange (such as BitX). Rand payments are only accepted through EFT deposit, so it’s not “immediate”. We’re not aware of any exchanges (or payment processors) that will allow the buyer to pay with rand (or any other currency) and have it immediately converted to Bitcoin. Thanks for checking in, though!

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