There 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
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
eTranzact Nigeria Limited
Electronic payment solutions
Address: 25/27, AdeyemoAlakija Street, Victoria Island, Lagos
Phone: +234 1 2701162; Fax: +234 1 2701163
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
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
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
Suite S8 Febson Mall, Plot 2425 Herbert Macaulay Way
Wuse Zone 4, Abuja, Nigeria
788 Finchley Road, London. NW11 7TJ
Nigeria Office: Plot 891 Onitsha crescent, Garki, Area 11, Abuja. FCT.