Substacking from South Africa

A how-to guide on adding a paid subscription service in South Africa

This is a free post from Our Long Walk, my blog about South Africa's economic past, present, and future. If you enjoy it and want to support more of my writing, please consider a paid subscription to the twice-weekly posts, which include my columns, guest essays, interviews, and summaries of the latest relevant research.

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In July last year, I took a gamble: I decided to unlock the paid subscription option for Our Long Walk. I was curious to see if anyone would actually pay to receive additional content and, perhaps more importantly, keen to earn some dollars so that I could sign up for the paid content of my favourite Substack authors.

But – and here’s the honest truth – going paid was a mission. This is largely because Substack uses Stripe as its payment system, and Stripe was not available in South Africa when I switched last year. It required me to create a US company. And get a US phone number, address, and bank account. A year later, I had to pay US taxes and hire US-based tax consultants.

The good news is that Stripe acquired Paystack in 2020. Paystack is available in South Africa, which means South African companies should theoretically now be able to accept Substack payments. I don’t know whether this is indeed the case, but given the laborious process of setting up a US-based company and payment system, it is certainly something worth investigating.

That said, more than a year after founding Our Long Walk LLC, I’m in the green. Because of the several dozen paid readers that so generously support my writing, I get to ‘invest’ in other Substacks (which I often refer to in my writing), and even occasionally spend on advertising my posts on social media. (Instagram has so far been a better bet than LinkedIn.) So if you’re serious about your Substack writing and willing to go through the rigmarole¹ of creating a paid account through a US-based company, then I’m happy to offer the following hopefully helpful advice.

1. Stripe Atlas

Stripe offers, through Stripe Atlas, an easy way to incorporate a company in Delaware. Given its integration into Stripe, I decided to go this route. The service doesn’t just help you form your company but also provides a range of additional tools to get your business up and running. With Stripe Atlas, you can open a U.S. business bank account, set up a U.S. tax ID (EIN), and access various legal templates that you might need as you scale. On top of that, Stripe Atlas offers perks like discounts on services such as Google Ads, where you can receive $500 in ad credit after spending your first $500, and Dropbox, with a 40% discount on the first year of an annual Dropbox Plus subscription.

2. Mercury

This came recommended by Stripe Atlas and I must say, I’ve been very impressed. I’ve made payments to international and South African banks, and it has been a smooth process. Their online system is super efficient. And cheap; in fact, so far I haven’t paid anything aside from bank fees on my payments. Built for start-ups, they are also continuously adding new services. (They do offer a referral programme, but only for those with serious ambitions – you have to add $10,000 within the first 90 days. However, if you want to go big, then this link will get you another $250 free.)

3. OpenPhone

You will need a US phone number. I chose OpenPhone, again a Stripe Atlas recommendation. OpenPhone is probably not the cheapest option, around $150 per year (though there is a discount in the first year). My initial experience was not great; I simply could not find a way to get past the payment page. I ultimately sent the CEO an email, blaming their outdated technology for my inability to pay. After several lengthy back-and-forth exchanges with their client service department, I discovered, to my embarrassment, that I simply ignored the tab that asked for my CVV code. (The fact that they’re still happy to have this incompetent African as a client is a testament to their willingness to serve.) They also offer discounts if referred, so you’re welcome to click here.

The problem of information pollution

4. Cleer Tax

A company registered in the States has to pay both federal and state taxes. Don’t try to do this on your own. I asked several accounting friends in South Africa for advice and all agreed it would be best to hire a US firm. I spent $450 on a tax filing and zero on actual taxes (so far), though I think there is a mandatory $300 state tax in Delaware.

There are still tax things I need to sort out. I am not yet registered for tax in every country with a paid subscriber. Yes, if you’re going to accept global payments, you might need to register for sales tax or VAT in every relevant region. Do you have one subscriber from the Netherlands? Then you need to register in the Netherlands. Germany? Spain? France? Kenya? All of them. Fortunately, some locations, like the US and South Africa, have a minimum threshold (either in terms of number of transactions or total value). But it is an incredible pain in the butt to register in each location for just a single transaction. (At least Stripe provides some info to help with this process.)

I’ll end with another word of caution. To turn a profit, you’d need at least 30 paid subscribers (annually) if you want to go the US route. And that is only if you value your own time and effort at zero. The integration of Paystack into Stripe should make it much cheaper and easier to receive payments locally, so I’d be keen to learn from those who have tried – please share your experiences in the comments. If that works, it can only be a good thing for the diversity of South Africa’s freelance writers – and the future of online media.

A huge thank you to everyone who supports my writing adventures through a paid subscription. If you’re able and willing to contribute, please sign up here. (If you’re willing but unable, please remember that you can get a paid subscription by recommending friends to become free subscribers!) Your support allows me to introduce new features, including some exciting updates coming exclusively for paid subscribers in the months ahead.

‘Substacking from South Africa’ was first published on Our Long Walk. The image was created with Midjourney v6.

1. The word ‘rigmarole’ has an interesting history. It originated in the early 14th century as a form of ‘ragman roll’, which referred to a long, rambling discourse or a catalogue of names. The ‘ragman roll’ was a roll of parchment with seals attached, used to collect signatures of allegiance to Edward I of England in 1291. Over time, the term evolved in both form and meaning. By the 16th century, it had morphed into ‘rigmarole’, retaining the sense of something lengthy and complicated.