It is indeed quite disheartening that a country as huge as Nigeria is still largely shut out from the part of international commerce that will allow local online entrepreneurs and start-ups earn foreign exchange through the sale of their goods and services.
Let’s not deceive ourselves; the fact that Nigerians can now shop on amazon or alibaba using their debit cards does not in any way mean that we are participating in the game of e-Commerce internationally. What is happening, in my opinion, is that we are being fleeced by many of the international establishments.
So from Facebook to PayPal to Netflix to Uber; these international organisations are here to do business and nothing but business and with the way these types of transactions are structured, it is almost impossible for our largely analogue nation to get a dime as tax.
Can you imagine how much foreign exchange we are losing as a nation because of certain practices that government has allowed to thrive? Nigerians, for example, can make payment with a PayPal account that is tied to their debit cards and the same Nigerians are not allowed to receive money using PayPal accounts.
This is one of the reasons why I am sort of happy about the mess our currency is in at the moment. It might get our government and policy makers to think outside the box and possibly take the possibility of earning foreign currency online more seriously.
It is a welcome development that a company like PayPal has opened up to Nigerians but after two years or so, Nigerians can’t still receive money on PayPal; how sad can that be? Government should as a matter of urgency start a process of lobbying these companies because the moment they allow honest Nigerians to receive money, we would immediately see the difference.
Let me re-echo what has now become a talking drum: “The fastest way to create jobs in our dear country is through Internet based jobs otherwise called digital jobs.”
At this point, it is great to commend growing Nigerian companies like Voguepay for the strides they are making which is geared towards making it possible for people to accept payments for products and services. I decided to mention them because I have used the service for a while and it is pretty easy for anyone to start receiving money through them.
This is quite commendable because after all is said and done, e-Commerce starts with the ability to make and receive payments online. I believe young companies like these need to be encouraged to grow because the more their user base increases the better they can become an effective replacement to the likes of PayPal. What do you think makes PayPal the defacto king of online payment? Basically, good infrastructure and huge user base that ensures billions are pushed across the platform daily.
Nigerians please let’s use the opportunity of our bad economic period to support our own.
However, I must state that there are a number of issues that must be dealt with by the Nigerian e-payment companies which include that fact fraud must be tackled and online security improved. This should go with massive enlightenment campaign that is necessary to build confidence and this is where partnership with the media is key.
Also, infrastructure that aids the growth of online payment has to be improved. Another critical challenge that needs to be tackled is the multiple steps that the customer goes through during payment. Each time I am using any local payment provider, I have to enter my card details every single time but PayPal as an example does not request for it a second time which cuts down the steps one has to go through.
Finally, I believe players in the financial tech ecosystem have to find a way to improve the process of reconciliation. The way things are at the moment, the banks are currently feeding fat in this whole arrangement to the detriment of start-ups. As a start-up, when a client pays you using any debit card in Nigeria; you don’t get it instantly. You must wait for x number of days before the reconciliation is done.
Some closing questions we’d need to ponder on are as follows: is it possible to solve the mystery of not having to re-enter your card details every time you want to make a payment? Can we change the Nigerian narrative that is closely linked with fraud? How can we improve service delivery? What happens if someone pays for a product and discovers it is defective? Will they get a refund? Is it enforceable?
The above questions are pointers to the fact that we need to strengthen institutions in our dear nation because this is what will build the confidence needed to develop Nigeria’s digital economy.
Interswitch is the Most Valuable African Startup
Interswitch, the leading payment processing company headquartered in Lagos, Nigeria, is Africa’s most valuable start-up at a US$ 1 billion valuation.
Founded in 2002, Interswitch uses switching infrastructure to connect different banks in Nigeria and powered banks’ ATM cards. Presently, the company has over 11,000 ATMs on its network.
In 2010, Helios Investment Partners bought two-thirds of the company and in the following year, Interswitch bought a 60 percent stake in Bankom in Uganda.
Interswitch owns Verve, Nigeria’s most used payment card, and accounted for 18 million of 25 million cards in circulation in Nigeria. The company also owns Quickteller and recently purchased VANSO, a mobile-focused technology provider to banks.
Like Interswitch, Stripe, the company that acquired Nigeria’s Paystack for over US$200 million, is the most valuable startup in the USA at over US$70 billion valuation.
Klarna, Nubank, Paytm and Grab leads in Europe, Latin America, India and Southeast Asia with valuations of US$10.65 billion, US$10 billion, US$16 billion and US$14 billion, respectively.
E-commerce Black Friday Sales Estimated to Surge by 40% to 10.2 Billion
The 2020 holiday shopping season will be unique, as the pandemic shifted consumer behavior from retail stores to online shopping. In response, many retailers moved their services online to not miss out on this year’s profits. Atlas VPN team decided to look into how e-commerce sales are set to perform in the upcoming long weekend.
Researchers predict that the US e-commerce revenue will exceed last year’s earnings by 49.5% on Thanksgiving day, totaling $6.18 billion in revenue. Black Friday is calculated to reach $10.2 billion in sales, exceeding last years numbers by 39.4%
Rachel Welch, COO of Atlas VPN, shares her tips on how to stay safe when shopping online during the holiday season:
“Watch out for too-good-to-be-true deals from unknown sellers, as cybercriminals will also expect to turn a profit during the holiday season, even though they are not selling anything, except maybe a bag full of disappointment.”
Finally, analysis shows that on the last day of the long and full of special offers Thanksgiving weekend, consumers will go all out to bring record sales for e-commerce businesses, adding up to $12.89 billion.
To look at these five days from a wider perspective, e-commerce companies can expect to earn around 39.72% more than they did last year.
Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales
Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. Sales across Alibaba’s platforms during the event totaled $74.1 billion, up from $38 billion in 2019.
According to the research data analyzed and published by Stock Apps, within the first 30 minutes of the event, the gross merchandise volume (GMV) surpassed 2019’s full-event sales, reaching $40.87 billion.
Moreover, instead of live events, Alibaba had 400 company executives and 30 celebrities hosting livestreams. Based on a study by Coresight, the Chinese livestream market is set to rack in sales worth $125 billion in 2020, compared to $63 billion in 2019. The US livestream market is a small fraction of that, valued at $5 billion.
China’s Tech Heavyweights Lose $280 Billion in Market Cap
Alibaba Singles Day 2020 dwarfed other major shopping holidays as has been the trend in previous years.
According to Practical eCommerce, Amazon Prime Day 2020 sales totaled $10.4 billion up from $7.16 billion in 2019. Cyber Monday sales in the US amounted to $7.9 billion in 2020 according to Statista. Black Friday and Thanksgiving added $9.7 billion to the figure to make $17.6 billion for the weekend.
Similarly, in 2018, Singles Day sold $30.8 billion while Prime Day sold $4.19 billion and Thanksgiving weekend got $14.2 billion.
However, the 2020 Singles Day event came in the wake of Ant Group’s suspension of a $37 billion listing. The suspension resulted in a $76 billion drop in Alibaba’s market cap, as the tech giant owns a two-thirds stake in Ant Group. Moreover, China’s regulators released anti-trust draft rules prior to the event, aimed at controlling monopolistic behavior.
Following the release, Alibaba shares plunged by 9.8%, as JD.com shed off 9.2%. Tencent similarly saw a 7.39% drop and Xiaomi fell by 8.18%. For the five companies, there was a combined loss of $280 billion in market capitalization.
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