PayPorte, the fastest growing on line retailer in African’s most nation will launch its Paywallets, a product that will enhance opportunities for consumer to access financial services in the country, as the ecommerce giant plans to end cash on delivery transactions by the end of 2016.
The company will leverage on the new tool or product to create data driven consumer for unbanked population. This is to enable its customers to use their mobile phones and bank accounts to buy and sell on the website.
Experts are of the view that the aforementioned initiatives will seamlessly shore up the Central Bank Nigeria (CBN) Cashless Policy that is geared towards reducing the amount of cash in circulation.
“ The PayWallet is going to be linked to people’s bank account where they will have to make payment via the wallet,” said Bassey Eyo, Managing Director and Chief Executive Officer (CEO) of the company, in a recent interview with BusinessDay.
“The company plans to end cash on delivery by December 2016. So, that means 80 to 90 percent of our customers are going to be banked in some way or the other. We are already getting the ball rolling as one of our stores, the Payport stores only accepts payment on line payment. We are operating the company to reach out for a lot of unbanked people,” said Eyo.
Payporte is not the only online shopping company with a wallet system that brings banking to the doorsteps of consumers as global e-commerce giant like Amazon and eBay are powering the CID tools to get more people banked.
It is generally accepted that a digital economy or an increase in the number of on line retailer can help deepen financial inclusion in Nigeria, a country where 47 percent of its 180 million are without a bank account, according the a recent report by a Swedish Multinational Communication Company, Ericsson.
The country lags some Sub Saharan African countries in global rankings for financial inclusion.
An enlightening Brookings Institution report recently ranked 21 developing countries on their support for fostering access to ﬁnancial services and Nigeria was disappointingly not among the top ﬁve countries. The countries on the top five ladders are Kenya, South Africa, Brazil, Rwanda and Uganda.
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Eyo attribute the high rate of financial exclusion in the country to include: high level of illiteracy, lack of trust for the banking system and the propensity by Africans especially the rural farmers to keep their money at home than have it banked.
“Accessibility to the financial institution is a very big problem. Nigeria started the mobile payment and that hasn’t proven to be successful like the Kenya’s Impasse,” said Eyo.
Industry players say cash on delivery, poor road network, epileptic power supply, lack of trust and awareness and logistics, are the major impediment to the growth of on line retail industry.
For instance, logistics and shipment delivery problems makes daily deliver in most Nigeria cities not feasible in 24 hours. Most cities do not have standardised addresses like in the Europe, United States and most Asia countries.
“I think the biggest challenge is people embracing e-commerce, I believe Nigerians can do more, the market is big. But there’s been a lot of online fraud and people have had bad experiences and because of that you find people hesitant to go online to buy their daily need,’ said Shola Adekoya CEO of Konga
With the country’s favorable demographics such a huge young population and rising middle that craves for consumer, combined with the upsurge in internet usage, on line retailers are in a growth spurt.
As of June, 92.28 million Nigerians had mobile internet subscriptions, according the telecoms regulator, the Nigerian Communications Commission (NCC).
Payporte is pious to tap into the aforementioned opportunities as the company will be launching its ultra model order processing facilities that will process at least 10000 orders a day, according to its chief executive.
The company with a revenue base of N10 billion plans to open a garment factory while part of its strategy is to increase capacity to a point where it can process 2 million orders across Africa, within next the five years.
“Do people really know how to use some of these tools and devices. Bank officials spend several hours teaching people how to use the ATMs. Government has to galvanize more policy to drive financial inclusion. If you are banked, l can do transactions with you easily, said Eyo.