SMEs are leading South Africa’s digital commerce revolution.
Digital payments are increasingly underpinning merchant growth in SA, with small and medium enterprises (SMEs) using them to unlock new revenue streams, expand their reach and build more resilient businesses.
These are among key findings highlighted in the fifth edition of Payfast by Network’s State of Pay report, which examines how evolving payment technologies are reshaping the country’s digital commerce landscape.
Launched under the theme “Powering Economic Growth Through Evolving Payments”, the 2025 report draws on anonymised Payfast platform data, as well as insights from its annual merchant and consumer surveys.
While Payfast supports enterprises of all sizes, including corporates and multinationals, the report places a strong emphasis on SA’s dynamic and fast-growing small business sector.
The merchant survey reveals a landscape dominated by emerging businesses. As of 2025, 35.7% of respondents had been Payfast merchants for less than a year, 82.5% operated with fewer than 10 employees and 66.7% generated under R100 000 in estimated monthly revenue.
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These figures reflect the growing momentum of early-stage and scaling merchants who are actively reshaping the future of digital commerce.
For these businesses, digital payments are proving to be a direct catalyst for growth. When asked about the impact of payment digitisation, almost 70% of surveyed merchants reported that adopting digital payments led to increases in sales and revenue of up to 50%, while just over 35% reported increases even higher than that.
Merchants also reported tangible operational changes, including the launch of new websites, the rollout of e-commerce platforms and the introduction of new products and services as a result of payment enablement.
SMEs are not waiting for new opportunities to emerge. Instead, they are proactively embracing innovation to improve accessibility, security and resilience. More than 80% of survey respondents agreed that digital payments will become their primary sales channel within the next three years and that they enable more equal access between consumers and businesses.
Payment diversification was also identified as a key growth strategy, with merchants viewing multiple payment options — from cards and digital wallets to buy-now-pay-later — as essential to remaining competitive in an increasingly omni-channel environment.
“Next-generation payment rails have forever transformed how South African consumers and merchants engage in commerce. Digital payments are not just something nice to have; they are the starting point of their digitisation and modernisation efforts, a means to access new markets and ultimately grow their businesses in a resilient, secure and sustainable way,” says Mpho Sadiki, MD of merchant services, Africa at Network International and Payfast.
The consumer survey findings further reinforce the role of digital payments in shaping merchant strategy. Card payments remain the preferred option for online purchases, while buy-now-pay-later usage doubled between 2024 and 2025, signalling rising demand for flexible payment options.
Credit facilities such as Mobicred are also gaining traction, with nearly a third of consumers reporting usage, highlighting the growing importance of affordability-driven payment tools, notes the report.
Security remains a decisive factor for consumers, with more than 65% prioritising data protection and encryption when choosing how to pay online. Clothing and accessories continue to dominate e-commerce activity, accounting for nearly half of all online transactions, pointing to sustained demand for fashion and lifestyle products in the digital retail space.
As SA moves towards a payments-led economic transformation, the findings of the State of Pay report point to a decisive shift. Digital payments are no longer optional tools but the nucleus of modern commerce, enabling SMEs to grow faster, operate more securely and compete on equal footing. Every swipe, tap and click represents not just a transaction, but progress towards a more inclusive and resilient digital economy.
