Nigeria, Africa’s largest economy by GDP, will witness a massive influx of local and international online businesses, with innovative services, seeking fresh market opportunities as internet payment processor PayPal Incorporated begins its second stint in the country, market observers have predicted. Global electronic commerce revenue is expected to increase 13.5 percent annually for the next four years to reach an estimated $1.4 trillion in 2015, according Cisco Systems Incorporated’s Economics and Research Practice. Only recently, PayPal, a global e-commerce business allowing payments and money transfers through the Internet, announced that its services are now available in Nigeria. In recent times, a host of global internet businesses especially in the retail industry have shelved plans to explore the Nigerian market due to the absence of an efficient online payment processor. “PayPal’s service in the country just opens a whole new world of business opportunities”, said Eki Toju, social media strategist for Gidimall.com, a leading online retailer in Nigeria. Speaking with BusinessDay in an interview, Toju said, “Foreign internet businesses will come into Nigeria in droves because of PayPal. “Paypal re-entry into the market gives a lot of credibility to Nigeria. When the volume of online sales begins to rise, you will see a lot of targeted marketing and advertising as well as increased foreign investment inflows”.
For a long time, Nigerians used forwarding addresses, IP (Internet Protocol), bank transfer, and more complicated and expensive means to shop online, and pay for services like Asos, Spotify, Deezer, and Themeforest. With the sole aim of providing its customers a simple, safe and convenient platform to shop and perform other e-commerce related transactions online, First bank, one of the largest corporate and retail banking financial institutions in sub-Saharan Africa, last week, officially launched its exclusive partnership with global payments provider Paypal. The new partnership will not only offer FirstBank customers a unique advantage to conveniently link their FirstBank-issued debit, prepaid or credit cards to their new PayPal account but will also allow them shop and pay for goods and services on most websites around the world without disclosing their financial details with sellers. According to its promoters, the well thought initiative will by extension also be a gateway to accelerating e-commerce evolution in Nigeria. Speaking at the official launch in Lagos, Bisi Onasanya, chief executive officer, First Bank of Nigeria Limited said, “This venture with Paypal will make far-reaching impact on the lives of our invaluable customers in particular and the entire people of Nigeria in general. Our customers remain the soul of our business; giving them excellent services will always be our watch word.”
Efi Dahan, Regional director of Sub-Saharan Africa and Israel, Paypal described the new partnership as a significant move in ensuring that the nation’s growing middle class get the best they desire when shopping online. “We have just made it easier for Nigerians to open and operate a Paypal account through the First bank portal and this is an added service for the bank’s customers.” “This exclusive partnership with FirstBank is a major milestone in PayPal’s Africa growth story and we hope to make more announcements together in the future as our partnership develops.”Dahan further added. Following PayPal’s re-entry into Africa’s most populous country, several other global online businesses such as Uber, the world’s coolest taxi-booking service and payment processors Stripe and Square have indicated strong interest in Nigeria’s online business landscape. The nation’s electronic commerce market is steadily gaining traction, with the value of the country’s online payments rising exponentially from $314 million in 2010 to $488 million in 2012, according to data from the Nigerian Inter Bank Settlement System (NIBBS). Local analyst however estimate that the total value of online payments hit $630 million as at the end of 2013, in view of rising sales at the main online portals.
Market observers are however of the view that PayPal’s move is a positive signal to the international business community that the nation is ripe for electronic payments even in spite of its weak cybersecurity legislation. Chris Udeji, chief executive officer, adibba.com, another e-retailer, in an interview with BusinessDay, pointed out that the re-entry of PayPal will increase online sales, further adding that customers’ confidence in e- commerce will grow tremendously. “PayPal is probably the simplest way to get going with electronic commerce; it’s easy to get started with PayPal. If you have a bank account you can set up your business account at PayPal in a matter of minutes. You can quickly generate buttons that allow your visitors to ‘buy now’ or ‘add to cart’. You don’t need a Merchant Account. You don’t need a gateway processor.
You don’t need secure server space. You don’t need a security certificate. PayPal, a subsidiary of eBay, handles all of these issues for you”, he further stated. In the first few days following PayPal’s announcement of service availability in Nigeria, Africa’s most populous nation, 20, 000 Nigerians signed up for an account, according to BusinessDay investigation.
Ben Uzor Jr & Odinaka Mbonu
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
