Ahmed-5Let’s now look at  eCommerce in  a  bigger picture  by  comparing the  relationship between  these  groups  of  people:

Nigerians in Diaspora

Nigerians at home

Foreigners in Nigeria

Foreigners abroad

In  the  Internet  marketplace, Nigerians  in Diaspora will  like  to  shop  for  their  relatives  at home  while still abroad. Also  foreigners in Nigeria will like  to  shop  for  their relatives abroad  while still  in  Nigeria . Nigerians in Diaspora will like to shop in Nigerian marketplaces for their consumption, while foreigners in Nigeria will like to shop for themselves in foreign marketplaces. Lastly, foreigners abroad will like to shop in Nigerian marketplaces for foreigners in Nigeria. The  above classes of  shoppers  will require two distinct  marketplaces, one  floated  from Nigeria and  the other  floated  from abroad, and an  effective  Internet  payment  option to enable the exchange  of  goods  and  services  via the internet. The dominant Internet payment   options are PayPal and credit card.

eBay is an example of a  marketplace  floated  from outside Nigeria.  VTN serves some market places in  Nigeria as  a payment gateway, and it  is floated  from  Nigeria. eBay  and Amazon are  marketplaces  that  in  theory will allow one  to  buy and  sell from  anywhere  in  the  world, but  in practice you  will  find out  that  some  countries have  been blacklisted (Nigeria  inclusive because  of  non-delivery of products and chargeback). This means that these marketplaces have written off the Nigerian Internet space. As  a  country, we  are missing out on opportunities when  the  likes  of  Amazon, eBay, and  clickbank are shutting  their  doors  on  us . These are stakeholders on the Internet. It feels  good  when you order a  John Grisham novel from  Amazon, read  it in a  couple  of days and  place  it  back on  Amazon  to get half of its  selling  price. Last Christmas, the Internet market place recorded about $1 billion sales of petty goods in a single day.  Some of the  market places  like eBay own  their online banks, this  gives  them  power to  easily blacklist  a  country.  Online banks are critical in eCommerce. Online banks like PayPal, Visa, Mastercard, Clickbank etc can handle payment efficiently in eCommerce.

Foreigners in Nigeria can effectively pay for goods and services abroad. The problem is   Nigerians in Diaspora and at home shopping   for   products   online. Since  Nigeria  is  a  consumer  nation, we  will buy  more  finished  goods from  foreign   marketplaces. But  foreigners  could  order  for  the  following products  from  Nigerian  marketplaces: Nigerian  home videos, Nigerian  art, books, raw  materials, etc, but   the  problem still  remains  a  reliable  payment option. Foreigners  will hardly  insert  their credit  card  numbers in  Nigerian  floated  websites  for  fear   of abuse, since those  numbers will  be automatically  collated  in a  database of  that  website  or  payment  gateway. On  the  other  side  of the  coin, PayPal   which is now  a  default  payment  option on  the Internet, will  not  accept  membership  directly  from   Nigeria; this  resulted from bitter payment abuses from  Nigerian   buyers. This is possible because from your IP address your location will be visible, and PayPal  will  not partner  with  Nigerian  banks. Even if  you  eventually  circumvent  PayPal’s  protective  barriers, merchant  sites  abroad  will  block  your  IP address  from  transacting  on their  sites, coupled with  the  fact  that  there are  other  features  that  could  give you  away as  a  Nigerian  buyer.

Some Nigerians  go as  far  as relying  on  friends abroad  to  open  PayPal  accounts  for  them  using  their  foreign  addresses, bank  accounts  and phone numbers, this  is  a  serious  security breach since  a third  party  is  involved . To mitigate this risk, some organized ies  for credit card purchases  on foreign  marketplaces. They do this by opening accounts with Nigerian bank.  You  give them  the link  to  your  purchase page, when  you  make  payment  to  them  in Nigeria  they then  help you make  PayPal  or  credit card payments

More so,  online companies like VTN have  partnered with  some  Nigerian  banks,  and  online  banks  like  Graphcard and Clickbank. When  you  deposit  money  in their  partner banks , you  can  export  the  money less commission  charges  into  VTN  and  from VTN to  Graphcard which  will  reflect in   dollars. Graphcard  has  a  facility to  generate VISA card  for  online transactions, grant  check  payments and  sell  virtual  US  phone numbers  and  physical address for  the  creation of  PayPal  accounts. This system works, but is cumbersome with multiple commission junctions at each point of transaction.

Softpay is  an  Internet payment  option in  Nigeria , it  is  a Nigeria’s version of  PayPal  with  a  gateway  to  PayPal where Nigerians  in  Diaspora can send  money to  their  folks  or  make  purchases on  Nigerian  websites that   use  softpay as  their payment gateway, but   very  few  businesses   in   Nigeria  own  websites, and those  that   own  websites   do  not  give room for  online transactions. Kalahari.com which recently disappeared is a Nigerian marketplace operated outside Nigeria, but Nigerians at home could not directly   list their merchandise on the site. Interswitch  is  the  payment  gateway  that  will allow Nigerians   at  home  to  shop  on  Kalahari.com, but  Interswitch  only  operates a debit  card, therefore  they need   to  operate like  PayPal because they  are integrated   with  all  banks  in Nigeria.

Other online marketplaces that feature classified ads in Nigeria are:













All these marketplace that  offer  free listing of  product don’t have  payment options  linked  to  them.

In this regard, how do we integrate Nigeria into the online marketplace? First we need to learn to transact and trust our online banks. As entrepreneurs, if we shun Internet payment options due to online scams, then we will be losing on lots of opportunities. When engaging on an online payment scenario, you have to strike a balance between ‘trust’ and ‘distrust’. When we develop good online banks with global ratings, then foreigners will patronize our Internet market places.   Online banks  in Nigeria have to  establish gateways with  foreign banks  to  allow websites abroad  use  local  payment  gateways as a  payment  option. We  want  a  situation  where all eateries  for instance will  accept  payment from  people outside  Nigeria and  delivery can  be made   to people  in  Nigeria.

Mobile Payment System is another payment option that cannot be ignored. By CBN definition and regulations, Mobile Payment System refers to the various components required to deliver person-to-person mobile payment to the banking and non-banking community. The telecom industry plays a critical role in mobile payment system. There are three major models for the implementation of mobile payments services namely;

  1. Bank –Focused- Financial Institutions as Lead Initiator

This is a model where a bank delivers banking services to existing and prospective bank customers using the mobile phone as a delivery channel. A licensed deposit-taking financial institution can only deploy this model. Licensed deposit-taking financial institutions, under this model shall include, deposit money banks, microfinance banks and discount houses.

  1. Bank Led – Financial Institution(s) and/or its Consortium as Lead Initiator

This is a model where a bank, or a consortium of banks, collaborating with other organizations, jointly seeks to deliver banking services leveraging on the mobile banking system. This model shall be applicable only in a scenario where there exists collaboration between a licensed deposit-taking financial institution(s) and an organization duly verified by the partner bank(s). Licensed deposit-taking financial institutions, under this model shall include, deposit money banks, microfinance banks and discount houses.

  1. Non-Bank Led- A corporate organization as Lead Initiator

This model allows a corporate organization that has been duly approved by CBN to deliver mobile payments services to consumers. This model shall be applicable to any organization other than a licensed deposit money bank and telecommunication companies. Corporate organizations, under this model, include switching companies and payments system service providers.

In mobile payment system, money is moved electronically. E-Money is monetary value stored electronically in a centrally held electronic device. It shall possess the following characteristics to be classified as e-money:

  • issued on receipt of funds
  • accepted as a means of payment by parties other than the issuer
  • its value shall be transferable

We  are now  in  the  era  of  IP version 6 with  lots  of  devices  moving on to the  internet and  surfing  independently. It means while you are asleep your  refrigerator  can  order  for milk online  by sending an email  to  your  supplier when  the milk falls  below a  certain level.  It  also  means  your  drug store  accounting  software  can independently  send  an email  to  a  pharmaceutical  company  to  restock  a  particular drug.

The Internet has actually provided us with gazillions of opportunities to transact. But  it  can  be  a  double  edged  sword  because  you can spend  a  long  time  on  the   Internet without achieving anything. That means we need a change of attitude toward the   use of the internet. You find people spending a whole night chatting on Facebook or yahoo messenger searching   for emotions online. It  is  not   good  when  you  find  people  permanently on  Facebook trading  pictures and  love  stories instead of trading  goods and  services to expands  our  markets. A  couple  of  examples  to  show  how  unproductive  people  can  be   on the  internet, try  to  initiate  a  conversation on  Facebook about the  business  strategies employed   by  Dangote and  you get  only three responses, but try  to initiate  a  conversation  about  Dangote’s  latest custom  built  Range  Rover jeep  and  you will  get  four  hundred  responses. Also, try  to initiate  a  critic about  Chimamanda’s  latest  publications  on  Facebook and  you  get  only five responses, but try   initiating  a  conversation about the  dark blue  jeans   Genevieve Nnaji wore during the last KORA award and you will  get  five  hundred responses. This is not a good internet attitude for Nigerians.

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

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