Online retailer's bold move reaps rewards

Peter Harvey, Founder and MD of PayGate. (Picture: Supplied)
Peter Harvey, Founder and MD of PayGate. (Picture: Supplied)
Supplied

Cape Town - It took online outdoor products retailer iWarehouse.co.za three years to come around to the idea of accepting credit cards on its website - but, says owner John Guthrie, “It turned my business around. I should have done it from the beginning.”

Guthrie was wary of accepting credit cards when iWarehouse.co.za opened its virtual doors in 2008 for several reasons: “We operate on very tight margins and we were afraid the credit card fees would eat too heavily into our margins. We were also very afraid of fraudulent transactions and bank clawbacks.”

For three years iWarehouse.co.za operated purely on an EFT basis, until increasing customer pressure forced Guthrie to find a credit card solution.

His homework eventually led him to PayGate: “They were the most cost effective payment service provider, but what sealed the deal for me was their service by way of their responsiveness and the ease of dealing with their support staff. Their technical support and backup systems are great.”

The effect on his business was instantaneous, says Guthrie: “We just about doubled our turnover within a month or two. I hadn’t realised how many sales I was losing – customers feel much more secure paying with their credit cards, and it’s much easier for them.”

Guthrie’s fear of fraud and clawbacks proved unfounded: “We thought we would be at the mercy of the banks, but to this day we haven’t had one clawback due to fraud. Partly that’s because we’ve been very vigilant, but PayGate also has great systems in place. Our guys are well trained and pick up most fraud attempts, but PayGate’s Pay Protector service catches what we miss.”

This is despite the fact that many of the products on sale at iWarehouse.co.za are high-value, high-demand items and tempting targets for fraudsters as they are easily resellable.

“With GPS and other high value goods we receive several fraudulent orders daily,” says Guthrie. “But with good systems in place it’s not a problem.” 



ZAR/USD
17.63
(-1.23)
ZAR/GBP
23.01
(-0.51)
ZAR/EUR
20.77
(-0.38)
ZAR/AUD
12.61
(-0.05)
ZAR/JPY
0.17
(-0.83)
Gold
2032.91
(-1.75)
Silver
28.10
(-5.59)
Platinum
960.00
(-3.80)
Brent Crude
45.10
(-0.18)
Palladium
2143.90
(-3.20)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 926 votes
It depends on how the funds are used.
74% - 6216 votes
No. We should have gotten the loan elsewhere.
15% - 1277 votes
Vote