e-commerce technology & payment systems deployment across africa.pdf

7/27/2019 e-Commerce Technology & Payment Systems Deployment Across Africa.pdf

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e-Commerce Technology &Payment Systems

Deployment Across Africa:

The Case of Nigeria

April 25, 2013


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Definition of eCommerce1

Statistics2

Channels, Players & Drivers3

Nigerian Success Stories4

Challenges of eCommerce5

Future Outlook6

Conclusion7

Outline

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e-Commerce (electronic commerce) refers to the use of communications technology & electronic systems such as theInternet to buy, sell & market goods and services to customers.This is to facilitate paying bills, shopping online, applying for vacancies, registering for exams, etc

e-Commerce draws on technologies such as mobile commerce,electronic funds transfer, supply chain management, Internetmarketing, online transaction processing, electronic datainterchange (EDI), inventory management systems, and automateddata collection systems

The mass adoption of the Internet and the boom of the wwwhavecreated a paradigm shift in the way businesses are conductedtoday, leading to the emergence ofe-commerce

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The global reach of the Internet means that the local neighborhoodis not defined by physical geography but by specialty & preference.Today, the line between e-commerce and traditional commerce isbecoming more blurred as businesses are moving from the brick

and mortar shops to take up residence at web sites.

E-commerce offers a level playing ground for large businesses, aswell as small and medium-scale enterprises (SMEs) to operate inthe global market-place; and for regional businesses and

communities to participate in social, economic and culturalnetworks seamlessly across international boundaries (Mary-Anne,1998).

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Some Statistics


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Channels, Players & Drivers


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E-Payment Channels

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Bank Branch, MerchantLocation, Agent Location

Automated Teller Machines(ATM)

Point of Sale (POS)terminals

Internet

Mobile Kiosk

Voice Based (IVR)


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The Players

Switching Companies

Banks & Fis

Mobile Money Operators

Regulators

Card Perso/Printing Companies

Telco/Data Service providers

PTSA/PTSPs

Merchants/Billers

Cardholders

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eCommerce Transaction Drivers

Number of active cards Transaction success rate

Application uptime Switch uptime Uptime of clients system (and other merchant/e-payment

stakeholder system) Availability /uptime of network (VPN/Internet)

Availability /uptime of Bank host Number/availability of channels Number of Banks utilizing application/services Risk appetite of stakeholders especially Banks Volume of transaction processed Distribution/Delivery channels for redemptions User experience Loyalty Schemes Adoption by merchant/corporate organization/government entities

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Several relevant Bills introduced to the National Assembly include:

Cyber security & Information Protection Bill of 2010 Electronic Transactions Protection Bill of 2010 National Internal Security Bill of 2009 Security Communications Interception and Monitoring Bill of

2009 Critical Infrastructure Protection Bill of 2009 Computer Security & Protection Bill of 2009 Electric Commerce (Provision of Legal Recognition) Bill of 2008

Electronic Fraud (Prohibition) Bill of 2008 Nigerian Antitrust(Enforcement, Miscellaneous Provisions etc)Bill of 2008

Cyber security and Data Protection Agency (Establishment) Billof 2008

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Attempts at Legislation


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Nigerian Success Stories


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With the help of Technology, the Internet, cashless paymentsystems and gateways, anyone can set up an e-commerce website

and sell anything - physical goods or services - from any corner ofNigeria and the world.

The biggest names have been growing in popularity because theyare spending vast amounts to get your attention. QuickTeller.com,

Konga.com, DealDey.com, Jumia.com, huntella.net,buylikemagic.com, uk2meonline.com, etc and many other sites arespringing up every day.

Some of these sites are dedicated to particular items like

Sunglasses.com.ng, BeddingsnBeyond.com, and the list goes onand on and on.

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DealDey started with a humble ice cream deal on March 22, 2011,many felt it would be just another e-commerce service that wouldsoon bite the dust. But while the company received $1 million in

funding last year from Sweden-based Kinnevik, a $7 billioninvestment holding company, it has yet to take any other funding

and seems to be growing its revenues month-on-month.

With close to 15,000 discounted deals so far on a range ofproducts and services in restaurants, spas, as well as retail shops,

and currently with 1,600 merchants (up from 245 merchants oneyear ago) and over 88,000 purchases (up from 6,000 a year ago),the service is one of the fastest growing e-commerce platforms in

Nigeria.

- techloy.com

www.dealdey.com

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Jumia, a leading online retailer in Nigeria, received an investment of US$26million from Summit Partners, in a move that will see the company developits brand across Nigeria, Egypt and Morocco.

As a place for direct retail shopping online, Jumia implements 24-hour

availability, a local and global reach, and the ability to interact and providecustom information and ordering, as well as multimedia prospects.

As Nigerias no.1 online retailer, Jumia plays big within the Nigerian

market, with a vision to being the solution to online retail in sub-SaharanAfrica.

Web Research siteAlexa.com places Jumia as the fifth largest Nigeriancontent site, and the founders say their order volumes have increasedsignificantly.

- www.humanipo.com

www.jumia.com

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QuickTeller is the value added service platform of Interswitch Ltd, withmultiplicity of usage. Quickteller has integrated to about 15 major mobilepayment operators, 20 international funds & remittance companies &over 10 internet banking portals. It aggregates various Billers (over 160)across various sectors & focuses on enabling essential services

(including utility payments) to be paid conveniently from one platform.

QuickTeller was launched in 2010 and has processed over 25 milliontransactions till date; supported include: Bill payment, airtime rechargepurchase, cardless transaction/transfer, inter-bank transfers, internationalremittance. These transactions can be done at over 10,000 ATMs,www.quickteller.com, mobile devices.

Verve, Mastercard Verve & Naira Mastercard brands are currentlyaccepted for payments on QuickTeller. It is one of the fastest growingvalue added service platform in Nigeria.

www.quickteller.com

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Revolutionizing e-Commerce in Nigeria

QuickTeller Transaction Volume

Source: InterSwitch - 2013

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FirstPayLinkis a multi-platform Internet payment

gateway, that integrates to merchant websites to allow Internetpayments using InterSwitch, MasterCard, VISA & eTranzactcards.

It offers a one-stop service for merchants to choose combination

of cards to be accepted on their websites, while providingcustomized payment capabilities that can be tailored to eachmerchants peculiar needs, with flexible backend reporting, data

export functionalities, and straight integration to web portals andlegacy systems


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In the past, payments for airlines are only made at airport ticketingdesks & travelling agencies and very few Bank branches.

With the advent of card payments through individual Switchingcompanies, they converted their websites to additional channels

Introduction of QuickTeller (by InterSwitch) also enabled card &

non-card carrying passengers/customers transact with airlines in aconvenient and flexible manner via ATMs, PoS, Banks InternetBanking solutions & QuickTeller websites.

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1. 3sbids.com2. 3stiches.com3. aascargo.com4. awoofshop.com

5. beademporium.co.uk6. buycorrect.com7. buynigeriaonline.com8. buynownow.com9. buyright.biz10. circuitatlantic.com11. dafunshop.com12. depearl.com

13. emartnigeria.com14. flegz.com15. foodsmartworld.com16. gafunk.com17. gamestores.com.ng18. goodlife.com.ng19. iqrabooks.com.ng

20. ishopinlondon.com21. kamdora.com22. kasuwa.com23. konga.com24. kuuzar.com25. laternabooks.com

26. mallforafrica.com27. mannastores.com28. mizzybshoesonline.com29. mybidmonster.com.ng

30. myboolah.com31. mygadgetsmall.com32. naijashop.com.ng33. naijastyles.com34. naijaweddings.net35. nigeriacatalog.com36. osarmoire.com37. outfitgalore.com38. ovashop.com39. procureitnigeria.com40. quicksell.com.ng41. sabunta.com42. scuupng.com43. sellbuynigeria.com44. shop-ng.com

45. shop.verbeelen-ng.com46. shopaholicng.com47. shopkolo.com48. sisime.com49. smartbuy.com50. smartbuy.com.ng

Some Nigerian eCommerce sites51. taafoo.com52. thefloshop.com53. time-tellng.com54. truebranches.com

55. uk2meonline.com56. upscalecollections.com57. wakanow.com58. walahi.com59. yeside.gostorego.com60. buylikemagic.com61. hausofdinma.com62. webmallng.com63. egoleshopping.com64. icanstock.com65. 3al.com66. buyology.enownow.com67. easyshop.com.ng68. stylerebirth.com69. 1500naira.com

70. liberaldesigns.com71. hellofood.com

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Gain mind share with

Customers across

International border

Opportunity to

accelerate & achievefinancial inclusion

for unbanked

Strengthens the

financial

Systems and economy

Provides

convenience to

the individual

& corporate

customer

Introduces

efficiency

Reduce TCO for

banksby leveraging

Shared

infrastructure

Provides an

inroad to attract newCustomers & retain

existing ones

Avenue for revenue

generation

drive

e-Commerce

Benefits of e-Commerce

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Challenges of eCommerce


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Challenges of eCommerce in Nigeria generally revolve around;

Integrity: Ascertaining that transmitted financial information isunchanged in transit.

Non-repudiation: Ascertaining that all parties have non-deniableproof of receipt.

Confidentially: Ascertaining that transactions are protected frompossible eavesdroppers.

Reliability: Ascertaining that there is reduced possibility offailure.

Authorization: Ascertaining that individuals are recognized andgranted the desired rights and privileges.

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Other challenges are;

Security: The public nature of the Internet has made it vulnerable to alot of security threats. Thus, it requires a systemic approach toguarantee its security (from Hackers & Attacks) on the fronts of webclients, data transmission, web server, and network server operatingsystem.

Similarly, moving businesses online requires efficient and effectivemanagement of operations and control (traceability, transparency,authenticity)

Public Education and AcceptabilityLegal Framework: The Evidence Act, Cap. E14 LFN 2004 does not inany way recognise electronic evidence in any of its provisions. Lack of adequate Infrastructure Limited access to the Internet & electronic devices Relatively high shipping cost Resistance to changes in technology among customers & merchants

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Future Outlook


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Improvedregulatoryoversight

Better financialreporting and

disclosure Further

regulation/newpolicies for adoptionby the players

Stronger regulation &legislation (e-Evidence, etc)

Further market-driven initiatives

Mergers andacquisitions

Emergence ofglobal/ new/local

players Collaboration/Joint

ventures andpartnerships

Near FieldCommunication

(NFC) & othercontactlesssolutions

Emerging markets &growth opportunities

Deepening penetration of

adoption of alternative

channels

Outsourced services (of

non-core activities) by

financial institutionsProducts/solution for

industry verticals (health,

transport)

Significant Online (web)

payments penetration

Mobile payment

penetration & adoption

Greater emphasison

Channeldevelopment

ProductDevelopment

Continuousinnovation

Reduced cost oftransactions

Mobile Wallets

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Conclusion

The buzz is on. Consumer behavior towards e-commerce and m-

commerce is being highly influenced. Innovation is on a high andideas are being churned out on the fly.

Young Nigerians with little or no funds are now actively involved inapplication development, coming up with brilliant inventions

Nigeria is ready and the CBN is also positioned to spur themarket. Banks & Telecom companies will implement newtechnologies while the knowledge gap is being bridged gradually.

Once knowledge is widespread, acceptance is simplified for the

Merchants & their customers, Interoperability of independentpayment systems is established and entry barriers of privatesolution providers is lowered, then Nigeria can fully reap the fruitsof eCommerce

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Thank You

e-commerce technology & payment systems deployment across africa.pdf

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