After fourteen years at the helm of PayFast, Jonathan Smit is stepping down at the end of August 2021 to prepare for a new chapter. Smit is a unique entrepreneur in that he has both technical and business acumen, which he credits as being key to his success in South Africa’s fintech space. A self-admitted technophile, Smit founded PayFast – now the country’s leading online payment gateway – in 2007, with the vision to make ecommerce accessible to all South Africans.
Today, PayFast is one of the biggest fintech solutions on the continent – a distinction achieved through pushing boundaries and championing innovation. After becoming the first payment gateway in South Africa to integrate with both Shopify and WooCommerce, PayFast took digital payment a step further in 2014 by being the first to offer online transactions for cryptocurrency. By 2015, more than one-million online shoppers had made a payment using PayFast.
The origins of PayFast
“Before PayFast launched, payments were really underserved in South Africa. In order to receive online payments, you needed a merchant account at a bank – but you couldn’t get a merchant account without a six-month trading history, which was basically impossible for a start-up. We didn’t know much about the payment world at all, but we knew we needed to democratise this space – not just for us, but for everyone. So, we just said ‘screw it, let’s do it,” says Smit.
Smit has always been passionate about entrepreneurship and building solutions to simplify business. With a background in electronic and computer engineering, and a particular interest in the workings of the internet and distributed systems, Smit built the PayFast platform from scratch over the course of a year, with much of the original code retained to this day. As the company has grown, Smit has developed his business skills along the way.
Building the business
“The thing that surprised me most about growing a business was the shift in emphasis from getting things done, to managing people so that they can get things done. As a hands-on entrepreneur who had to do everything in the beginning, I had to learn to let go and empower people through delegation. I’ve learned that people are at the heart of any company’s success, which means that culture and trust are crucial,” says Smit.
His other secret ingredients include a relentless focus on execution, perseverance in the face of adversity, and a dedicated work ethic; “I don’t believe in the traditional concept of balance. I think as an entrepreneur, you are taking on an unbalanced lifestyle with the understanding that you will probably work exceptionally hard for a number of years, and then spend a bit more time not working thereafter. I’ve taken the working part to the extreme, which has taken its toll. It’s something I’m going to be more mindful of in the future,” says Smit.
The future of PayFast
When PayFast was launched, less than 1% of South Africa’s retail activity occurred online. Today, this number is around 3%; “Compared to developed markets, like the United States and Europe, where 10 to 30% of retail occurs online, local ecommerce is only at the beginning of what is possible in terms of growth. This puts the PayFast team in a very exciting position. I can’t wait to see where the team takes the company next,” says Smit.
As Smit prepares to hand over to his team, he shares some of the lessons he’s picked during his time at the forefront of South Africa’s ecommerce space:
“If in doubt, back yourself”
Andy Higgins, my initial business partner and PayFast investor, told me this early on. When the path ahead is unclear and you’re not sure which way to go, back yourself; don’t put your trust in others or think they know better than you do. I sadly made the mistake of not backing myself at pivotal points in the journey and paid the price.
“Get your head read”
Whether you’re a sole founder or a dual founder, an entrepreneur’s journey can get pretty lonely. I think it’s key for people in any leadership position to get a life coach or psychologist, who can act as a sounding board to help you deal with the unique stresses of running a business.
“Funders are not friends”
When you’re starting a business, you may have to take on capital. In doing that, founders need to understand that venture capitalists and growth equity firms can be good business partners, but they are not your friends – they do not necessarily have your best interests at heart; they are there to get a financial return.
“Build with the exit in mind”
I didn’t start PayFast with an exit to the business in mind. My goal was always to create a sustainable business – but I’ve since learned a key truth, which is that every journey ends. When you build with an exit in mind, you build a better business because you are building to make yourself as an entrepreneur obsolete, and to grow your team into leaders in their own right.