Nigeria’s e-commerce platform, PayPorte said on Monday that it is suspending its Pay-on-Delivery service to enable it “serve” its customers “better” and reposition the business for profitability.
“We have suspended the Payment-on-Delivery option on our website with effect from today, April 3, 2017. Our decision was necessitate by the increasing risk and security challenges posed by this payment option. Also, to reduce the amount of cash carried from one location to another by our delivery staff,” said Bassey Eyo, managing director and CEO of the e-commerce platform.
The announcement may be three months late. In an interview granted to TechPoint on 4th December 2016, PayPorte’s CEO Bassey Eyo, had disclosed that the company was going to get rid of the service by the end of December 2016.
Eyo had noted in the interview “For those that want to come into the e-commerce space, I will tell them the truth: Pay-on-Delivery is not a sustainable business model. Payporte already has it on its roadmap that by December 2016, Pay-on-Delivery will be a more expensive option. We will not end it outright but it will be a more expensive option as against the norm today.”
PayPorte which is a major sponsor of the ongoing reality television show Big Brother Naija stated that it would only accept secured online payments and bank transfers from Monday, April 3, 2017.
Following the suspension, PayPorte has promised to fast-track refunds for unsatisfied customers within a maximum 48 hours window.
In another twist, the company said from April 10, it will allow access to Pay-on-Delivery customers who have shopped on the platform for at least five times pending its removal from the payment options.
Gbenga Dara, an e-commerce expert told BusinessDay that PayPorte’s decision is not unexpected in the industry. He noted that sustaining the Pay-on-Delivery option was expensive and retailers have to battle with high rate of goods being returned by people.
The decision he said may be dependent on individual e-commerce platforms.
“Some companies are willing to risk their positioning to try it. If you have this customer base that is very loyal, it (Pay-on-Delivery) is something that will help the bottom-line of the company in the long run,” Dara said.
The flipside for a company like PayPorte is losing some of its base, customers who are yet to be won over and will still want to try the option to verify what they are buying, Dara noted. An expanded payment option works for a company that is keen on gaining market share.
PayPorte however believe their decision will only be to the benefit of the e-commerce industry.
“We believe this will also play an active role in the growth of e-commerce business in Nigeria, as well as give a new dimension to the business,” Eyo said.
