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The Challenges of Online Payment in Nigeria

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Online payment

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.

Let me give you a simple example; a young local freelancer who provides services online may earn an income but would not be able to receive cash easily because PayPal won’t allow it. In my personal experience, I have between $50 and $250 that I have earned as an affiliate marketer at one point or the other but as I write, these monies are more or less useless to me simply because I can’t use PayPal to receive money. I’ll not bore you with the process of how I try to receive my earnings locally which has also led to the loss of over $500 affiliate earnings.

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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Telecommunications

Canadian Government to Restrict Chinese Huawei, ZTE from its 5G Networks

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Huawei 5G

Canada has said it will ban two of China’s biggest telecom equipment makers from working on its 5G mobile-phone networks.

The Canadian Industry Minister, Francois-Philippe Champagne disclosed the restriction against Huawei and ZTE on Thursday. He said the move will improve Canada’s mobile internet services and “protect the safety and security of Canadians.”

“This is about providing a framework to protect our infrastructure. In a 5G world, at a time where we rely more and more in our daily lives [on] our network, this is the right decision,” Mr Champagne said while speaking to reporters in the Canadian capital of Ottawa. 

Investors King has it that this decision by Canada has been widely expected, as its allies had already barred Huawei and ZTE from their own high-speed networks.

This means that telecoms firms in the country will no longer be allowed to use equipment made by Huawei and ZTE.

“Companies that have already installed the equipment made by the Chinese manufacturers must now remove it,” Mr. Champagne added.

Four nations had already placed the same restriction on the companies. They include the United Kingdom, United States, Australia and New Zealand.

Canada with these other five countries make up an intelligence-sharing arrangement named ‘Five Eyes’ which evolved during the Cold War as a tool for monitoring the Soviet Union and sharing classified information

The Fifth Generation network is the next upgrade to mobile internet networks, offering much faster data download and upload speeds.

It also allows more devices to simultaneously access the internet. It comes as data usage is soaring, as the popularity of video and music streaming grows. This is pushing governments and mobile phone network operators to improve their telecommunications infrastructures.

Canada first announced a review of Huawei equipment in September 2018. The Chinese embassy in Ottawa, Huawei and ZTE did not immediately respond at the time of publication.

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Spanish Regulator Fines Google 10 Million Euros For Transferring Data to Third Parties Illegally

Another privacy regulator has imposed a fine on Google for illegal data practices

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A logo is pictured at Google's European Engineering Center in Zurich

Another privacy regulator has imposed a fine on Google for illegal data practices. The Spanish Data Protection Agency (AEPD) accused Google of transferring users’ data to third parties illegally and also hindering their right to erasure.

The privacy regulator slammed the leading search engine with a 10 million Euro fine, saying Google transferred information of citizens, including their identification, e-mail address, etc to third parties.

It should be recalled that in September 2020, the French data protection authority imposed a $57 million fine on Google, its highest penalty under the new law, for failing to disclose how its users’ data is processed. Later in the same year, the French regulator fined Google and Amazon €100 million ($120 million) and Amazon €35 million ($42 million) for using tracking cookies without users’ consent.

Earlier this year, Investors King reported that France’s National Commission on Informatics and Liberty fined both Google and Facebook another $170 million and $70 million, respectively for making it hard for citizens to refuse cookies.

In Google’s latest fine, the Spanish regulator said Google’s actions contravene Articles 6 and 17 entrenched in the European General Data Protection Regulation (GDPR). 

In a statement announcing the fine, AEPD said: “Google LLC acted as controller of the analysed processing, which was conducted in the United States. In the case of disclosure of data to third parties, the AEPD has found that Google LLC sent information of requests made to it by citizens, including their identification, e-mail address, the reasons given, and the URL claimed to the Lumen Project. The task of this project is to collect and make available requests for the removal of content, and the Agency, therefore, considers that, since all the information contained in the citizen’s request is sent for inclusion in another publicly accessible database and for dissemination via a website, the purpose of exercising the right of erasure results in practice frustrated.

“This communication of data by Google LLC to the Lumen Project is imposed on the user who intends to use Google forms, without the option of objecting to it and, therefore, without a valid consent for such communication to be made. Establishing such a condition for the exercise of the right to erasure granted to data subjects is in breach of the General Data Protection Regulation by generating “an additional processing of the data contained in the request for erasure when communicating them to a third party,” the Agency added.

Responding to the fine, Google stated that it has started reviewing the fine and will continue to engage regulators on privacy and how to reassess its practices. 

“We’re always trying to strike a balance between privacy rights and our need to be transparent and accountable about our role in moderating content online. We have already started reevaluating and redesigning our data-sharing practices with Lumen in light of these proceedings”, Google noted.

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Data Infrastructure Will Attract Foreign Investments, MainOne Tells FG

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Mobile internet in Nigeria

Chief Operating Officer of MDXI, MainOne’s Data Centre, Mr. Gbenga Adegbiji, has revealed that proper data infrastructure can attract foreign investments. 

Adegbiji, during an interview with ThisDay, said the federal government should revamp its policies and create basic infrastructure that promotes effective data centre operations in Nigeria in order to attract foreign investments in the Information and Communications Technology (ICT) sector.

He said: “Investors do not invest based on what any government tells them, but they invest based on what they see, which has to do with growth indices and numbers. They look at the population report and the growth of the economy, including security of investments in the country, before they can invest in the country.

“Attracting foreign investments goes beyond what the Nigerian government is currently doing by merely visiting these investors in their countries to woo them to invest in Nigeria. They will surely come and invest if they see the need to invest in Nigeria, and a good example is the recent acquisition of MainOne by Equinix because MainOne has over the years, positioned its operations to a standard that is attractive to any foreign investor. 

“Investments are made based on numbers, foreseeable return on investments, and risk that is associated with a particular country”.

According to Adegbiji, for any willing investor to come to Nigeria to invest, there must be basic infrastructure on ground. Citing lack of adequate electricity supply, which is a basic infrastructure for data centre operation, Adegbiji said the lack of such basic infrastructure would make it difficult for investors to consider Nigeria as an investment destination. 

“Adequate and steady electricity supply is key to data centre operation because data centres consume a lot of electricity and any data centre operator will look at the stability of the electricity supply of a country, before venturing to invest in that country. If power is achieved, operators will be able to achieve up to 60 per cent of their operations in data centre business,” Adegbiji said. 

He, therefore, advised the government to revisit its policy on power and ensure stable supply of electricity for businesses, in order to attract investors into Nigeria’s technology space.

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