Ahmed-5There are two kinds of countries in the world, those that are fully integrated into the Internet marketplace and those that are not. Humankind  now  rests  on a new  economy where  a   bottle  of  milk  is  just  a  mouse  click  away. Ecommerce   will  allow  us  to  search  for  a  product online in our  locality, giving  us  the  best  offer  by  comparing  the  qualities  and  prices  of  same  product in different  marketplaces, while still in our beds. With a reliable payment option, a delivery boy just knocks at your door and the   business is sealed.

There are two kinds of economic people in the world, the patient and the impatient. The patient  people  possess  the  discipline of saving money towards future expenditures, while  the  impatient   people  lack  the  discipline  of  savings. The business  world  is  impatient  in  nature,  that  is  why   the  banking  institution comes in  the game to  help  channel money  from the  impatient   people   to  the  patient people  at  an  interest   charge  which  helps keep them   in  business. The  global  economy  is  dominated by  the  impatient  people who  have   only  their jobs as a  guarantee  for credits. Then,   comes  the   wave  of  technological  advancement   and  the kiss  of  automation that   gave  birth  to  the  credit   card  system  where purchase, authentication, and fund transfer can be  done   instantaneously.  In this regard you can   move with a card without carrying cash.

A  credit  card  company  or  a  credit  card  processor like  VISA, MasterCard, American Express etc, establishes  a  network  that  allows  different  banks  to plug into  their    network  and   communicate. Therefore, this is what happens. Your  bank issues  you  with  a  credit  card  displaying your  name, issuing bank, credit card number, expiry date, and  a  verification number. When  you enter a phone store  to buy a  Nokia  phone  that  cost  N10,000 for instance, if  the  store  accept  credit card like VISA. It  means   the  phone  store  has  an  account  with  a bank  called  an  acquirer  bank  that  is  plugged into  VISA network. They  are called  acquirer banks   because   they  acquire retailers   and  authorize  them   to  accept  credit  card payment  by  supplying  them  with  a  swiping machine called Point of  Sale (POS)  or  a  code on their website.

Now  this  is  what  happens, the    phone  store  takes  your  card  and  swipes  it into a  machine (POS). The  machine  sends  the   message   to  the  acquirer  bank, from the  acquirer   bank  to  VISA  network. Visa will  recognize the  card  owner  and  transmit  the  signal  to  the  issuer bank  where  the  buyer  is  maintaining an  account. The issuer bank checks its database in other to okay your transaction.

It is   important   to  realize  that  the issuer  bank  is   only  offering   you  a  credit   which   must  be   repaid   with  an  interest in  a   future  date.  Therefore  if  the   Nokia  phone  cost  N10,000,  there  will  be  a   2-3 percent  commission  deduction  on  the  N10,000  depending on  the processor which will be  shared between  the  issuer  bank, the acquirer bank  and the credit card  company in this  case  VISA. In the   commission  sharing  formula, the  issuer  bank  will  get  about   70  percent  of  the commission,  followed  by  the acquiring bank, and   the  least   percentage  goes to VISA.

Looking at the bigger picture, credit  card  companies  make tremendous  amounts of  money  as  they  handle millions  of credit  card  transactions from  different   banks  on  daily basis. The  70  percent  commission  charge  that  goes  to  the  issuer  bank  is  called  the  interchange  rate  which  is  set  by  the  credit   card  company. Therefore , the  issuer bank  will  transfer N10,000   less the  interchange  fee  to  VISA, VISA then  transfers the remaining  fund less its own  commission  to  the  acquirer bank which also credits  the phone retailers account less its  commission. It  seems  like  a  cumbersome  process,  but  all transactions  are  completed  within   few seconds.

Similarly, when  it  comes  to   making a   purchase  on  the  phone store’s website, the  processes  are  slightly  different. This  is because  the  phone   store  has  a  direct  contact  with  the credit  card  company which  places  a   gateway  on  the  phone store’s website. During  purchase on  the phone  retailer’s  website  the  buyer   is  expected   to choose a  payment   option for  any credit  card  company  on the   phone  retailer’s website. The buyer punches in his  VISA  number  into  a  box on  the retailer’s  website, the  gateway  runs  a  check and display  the  cost  of  the  phone  plus  a  commission charge  to  be deducted . The buyer okays   the deduction and the transaction is completed awaiting delivery or instant download. Both the buyer and   the retailer have an   online dash board they use to manage their accounts.

Some Nigerian  banks have  partnered  with  VISA to  issue debit  cards  for  online payment when  you  run a domiciliary account with such  banks. Banks   like United Bank of Africa could even issue you VISA card (Africard) without having an account with them. The issue is that not all websites and foreign online banks accept those cards.

Below are some popular payment gateways in Nigeria

3Line Card Management Ltd

End-to-end card management firm.e-Payment, eData and eIdentity solutions.

Address: 7a Idejo Street, Victoria Island, Lagos.

Phone: +234 1 4627701, 4627702

Email: info@3lineng.com

Website: http://www.3lineng.com

Cards Technology Limited

Transaction Switching & Processing, Card Printing/Personalization, Cards & e-Commerce Training,

e-Payments Software Solutions, e-Business Consulting

Address: 24A Campbell Street, Lagos Island, Lagos

Phone: +234 1 2646353, 2646255; Fax: +234 1 2646385

Website: http://www.cardstechnology.com

eTranzact Nigeria Limited

Electronic payment solutions

Address: 25/27, AdeyemoAlakija Street, Victoria Island, Lagos

Phone: +234 1 2701162; Fax: +234 1 2701163

Website: http://www.etranzact.com

Intermarc Consulting Limited

Prepayment Solution Platform, RFID and other Identification Solutions, Training and Capacity Building, Consulting Services, e-Fraud & Risk Management Solutions

Address: 2nd Floor, 161B Rafiu Taylor close,    Off Idejo Street, AdeolaOdeku, Victoria Island, Lagos.

Phone: +234 1 4367125, 4721160, 08037420002; Fax: +234 1 2623770

Website: http://www.intermarc-ng.com

InterSwitch Limited

Electronic payment solutions, ATM machines, debit cards etc

Address: Plot 1648C, Oko-Awo Close, Victoria Island, Lagos

Phone: +234 1 4739101, 4616300, 4617822; Fax: +234 1 4616299

Website: http://www.interswitchng.com

Smart Switch Nigeria

Payment solutions company .fully integrated payment, switching, settlement and identification system

Address: 19 SakaTinubu Street,, Victoria Island, Lagos

Phone: +234 1 2719972, 7612006; Fax: +234 1 2718343, 2719978

Website: http://www.smartswitch.com.ng

VTNetwork Limited

Suite S8 Febson Mall, Plot 2425 Herbert Macaulay Way

Wuse Zone 4, Abuja, Nigeria


Tel:  07041911945

SoftPay.Org LTD

788 Finchley Road, London. NW11 7TJ

Nigeria Office: Plot 891 Onitsha crescent, Garki, Area 11, Abuja. FCT.


Ahmed Aliyu Ahmed
At the tail end of the nineteenth century my grand parents met and my father was born. My father who I didn’t know passed away through a brief fever in a confluence town (Lokoja) in the middle belt part of Nigeria. My upbringing was a bit above middle class and I was lucky to come in terms with mathematics very early in life. When I couldn’t study chemical engineering, I opted for computer science in which I got a diploma from Ahmadu Bello University Zaria. In the same institution I under studied in a Cisco facility and also got a B .Sc in Economics. I got my MCP, MCDST, and LINUX CERT from a Kolkatan (India) software training facility jointly sponsored by a New York based consultancy firm (Hudson Consultancy), Tathya in India and NEPC in Nigeria, and some few other IT certifications. I am also an occasional columnist in Guardian Newspaper, CommunicationsWeek and some other IT magazines. I have worked with Aptech World Wide/STPL-Software Technology Park Limited (Nigeria) as a networking instructor/security admin, working on Cisco equipments, and up to this moment I am working as a network security advisor in Sphinx Interactive Solutions coupled with some five years field experience in network support. My contact email address is ahmeddu2020@gmail.com

    Google Scholarships for 2012

    Previous article

    How did we totally lose our way

    Next article

    You may also like


    Leave a reply

    Your email address will not be published. Required fields are marked *