Has PayPal gained the trust of Nigerians?
In June 2014, PayPal, one of the world’s largest internet payment companies, opened its online payment platform to Nigerians after sealing a partnership deal with First Bank, Nigeria’s oldest and second largest bank. The deal confirmed Nigeria’s emergence as a major ICT player in Africa and consolidated its position of as one of the leading destinations for internet-driven investments, particularly within the e-commerce space.
However, since PayPal’s debut last year, the realities have been “very interesting”, says Efi Dahan, PayPal’s Regional Director for Africa and Israel. In an interview with Ventures Africa, Efi reveals that while PayPal has attracted millions of Nigerians to its platform, trust remains its greatest hurdle. He goes on to explain how PayPal is navigating through its current challenges and how he expects e-commerce to progress in the coming years.
VA: It’s been roughly a year since PayPal’s debut in Nigeria. How well do you think Nigerians have received the payment platform?
ED: Since we launched in June last year, the number of Nigerians using our payment platform has grown rapidly. The adoption rate and popularity among Nigerians so far is very positive and we expect it to continue to grow in the future. There are millions of people in Nigeria who are eager to engage in online commerce and our goal is to help them make payments more easily and more securely.A recent research conducted by Ipsos (a global market research company) on behalf of PayPal found that PayPal is the second most often used online payment system among Nigerian online shoppers; we are happy we can facilitate and improve their online shopping experience and provide an easier, faster and most importantly more secure way for them to pay online.
VA: Has PayPal surpassed its expectations so far?
ED: Nigeria is a very interesting market; we’ve seen an enthusiastic response from Nigerians since we introduced our services. Clearly people feel a need for the trust and reassurance that comes from paying with a PayPal account and we are happy to extend this platform to Nigerians.
VA: During the PayPal launch it was disclosed that the platform will only be exclusive to First Bank. Has PayPal opened its platform to other financial service providers?
ED: When we opened our services to Nigeria in 2014, we chose First Bank as our exclusive partner in Nigeria thanks to its continuous efforts to drive innovation in banking services and to support the push towards a cashless society in Nigeria. We hope to have a long and fruitful relationship with First Bank in Nigeria and are not considering additional bank partnerships in Nigeria at this stage. However, any individual, regardless of who he or she are banking with, can open a PayPal account using their credit or a debit card as a funding source.
VA: What will you say has been PayPal’s biggest hurdle since it opened shop in Nigeria?
ED: The most significant challenge when it comes to online transactions in the region is the lack of trust. However, PayPal’s reputation for being one of the world’s most trusted ways to make online payments only helps with this. This trust is built on 15 years of security, fraud and risk management expertise, as well as managing complex regulatory environments. While there are local payment providers around the world who offer different unique advantages, the PayPal advantages are hard to replicate.
We pride ourselves on helping consumers to shop online at thousands of retailers around the world with greater ease and with the confidence that their financial information is kept more secure and not shared with the seller.
VA: E-commerce is increasingly becoming popular, not only in Nigeria, but across Africa. How will you say it has impacted the industry’s entire value-chain?
ED: People are becoming more comfortable with online transactions as convenience is key. In a research conducted by Ipsos on behalf of PayPal in November 2014 in Nigeria, South Africa and Kenya, we actually found that Nigerian shoppers are the most advanced when it comes to e-commerce, when compared to South African and Kenyan shoppers. In fact, 89 percent of internet users in Nigeria already shop online or expect to do so in the future. We believe that this will only get better with time and are very excited to be a part of the e-commerce boom especially here in Nigeria.