PayFast just celebrated their 10 year anniversary, a huge milestone for a company in the tech space in South Africa. We had a conversation with Jonathan Smit, the founder of PayFast to gather some insights about the company as well as the industry it is in.
Jon! - congratulations on reaching 10 years for PayFast. In an age where businesses struggle to reach two years, you've done well. Tell us a little about the origin story - what gave you the idea? Where were you working? Was it an easy transition for you to start the new business?
I always knew I wanted to start my own business. For whatever reason, it was something "in" me. When I left University, I had a plan to spend 2 years working in a more technical role, then 2 years in a more business role. I did that with 2 companies working 1 year 11 months at each before taking the plunge to start my own thing. I didn't have a clear idea of what that was, but I had a little bit of money to live off and the will. I moved back in with the folks, bought my laptop off the company I'd just resigned from and set about figuring out my way. I'm an engineer by study, but had worked with web tech in my spare time as a hobby and the Internet and its possibilities excited me. I met with Andy Higgins, the founder of bidorbuy, shortly after resigning and we talked through a number of ideas for the SA market. I ended up running an import company of his for a while which imported products from China to sell on bidorbuy which was my first proper taste of ecommerce. I ended up deciding that wasn't for me and started building some ecommerce tools for bidorbuy sellers. Andy didn't think that was a good use of my time, so we talked about a number of other ideas, but all of them needed payment which was a very under-served market at the time. In true entrepreneurial fashion, we decided, "Screw it! Let's do it!" and set about starting a payment company. Andy put in the seed money, I put in the expertise, the red blood, sweat and tears, and PayFast was born.
To the outsider, PayFast is a payments provider. You're a focused company, which makes it easy to explain. However, perhaps not as easy, what is PayFast's 'Why' - ?
PayFast's goal was to be an ecommerce enabler. We wanted to make online payments quicker, easier and safer for all parties and foster the development of ecommerce businesses; particularly smaller ones. Through the years we've grown into a payments company, but that core goal of fostering ecommerce still holds true.
How has the landscape changed in 10 years, and what are you most excited about moving forward - ?
Definitely. While still small in the grand scheme of things, e-commerce has grown a lot in the last decade. So too has the payments industry with "fintech" being one of the hottest industry segments for the last few years. There is a lot of innovation taking place against a backdrop of new entrants to the market, mergers and acquisitions and increased international interest. What I'm most excited about is a secret for now.
10 years ago e-commerce was a glorious profession abuzz with catch phrases - stockless trading! Cash-rich! Long tail! The world is flat! Global marketplace! - to a current scenario littered with spectacular failures, omnichannel retailers, scrappy niche players and dominant monopolies. Do you think it's still a sexy choice for entrepreneurs?
I think that e-commerce has definitely matured where e-commerce retailers are starting to understand that they are at the end of the day, still retailers. They are not that different from the established retailers who've been around for years. And those brick and mortar retailers have largely figured out how to reach online consumers too; so there's more competition. Traditional physical players are selling online now and vice versa too. There's still lots of opportunity for niche players in e-commerce and it can definitely still be "sexy", but one has to be very mindful of your product, your business model and the competition. And don't think of yourself as an e-commerce retailer only; think of yourself as a retailer and don't necessarily restrict your channel.