Sometimes in March this year, a colleague mine, Segun wanted to make an international transaction to the United States. He had several options including mailing a check in US Dollars or paying through Credit card, western union or Money Gram, or through bank wire or PayPal. Because Segun was engaging in this kind of transaction for the first time, and didn’t even have a domiciliary account,

it was impossible for him to utilize most of the above options. He had opted to pay through PayPal but then it occurred to him that because he was a Nigerian in Nigeria, PayPal services were not available to him. Another colleague of his suggested he pose as Malaysian in order to be able to open an account but he objected and later mailed the cheque via DHL.

The reason that was adduced by PayPal for Nigeria’s ineligibility was fear of fraud, as Nigeria has become infamous for her notoriety of sophisticated cyber criminals.

However, two months after Segun’s experience, PayPal made a turn around and now said it will make its services available to Nigeria. According to the statement released by the payment processor on Monday June 16, 2014, it is making inroads into ten new countries in Sub-Saharan Africa, Eastern Europe and Latin America. Other African countries, besides Nigeria, that it is venturing into included Cameroon, Ivory Coast, and Zimbabwe.

PayPal is an international e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders.

Before now, PayPal had operated in 193 countries including 37 African countries.

This recent move implies that the company’s services are now available in forty African countries with localized marketing websites. However it is important to note that PayPal allows customers to send, receive, and hold funds in only 26 currencies worldwide, none of which is African.

These currencies are the Australian dollar, Brazilian real, Canadian dollar, Chinese renminbi yuan, euro, pound sterling, Japanese yen, Czech koruna, Danish krone, Hong Kong dollar, Hungarian forint, Israeli new sheqel, Malaysian ringgit, Mexican peso, New Zealand dollar, Norwegian krone, Philippine peso, Polish zloty, Russian ruble, Singapore dollar, Swedish krona, Swiss franc, New Taiwan dollar, Thai baht, Turkish lira and United States dollar.

But why did PayPal make the move now? Some have attributed the move to the growing population of internet users which stand at over 60 million according to statistics from Euromonitor. But Nigeria has always been Africa’s most populous country and therefore its largest market. So the idea that it has decided to enter Nigeria in order to exploit the fertile market offered by its huge population does not suffice.

On the other hand, some e-commerce enthusiasts are saying that the move is recognition of Nigeria’s stride in tackling online fraud. They argue that PayPal entry into Nigeria is a kind of vote of confidence on Nigeria as a country with decreasing incidents of cybercrime.

However, investigations have shown that this also is not true. Internet fraud is a global concern and has been an increasing concern in Nigeria, and may continue to be so because the internet was never built with security in mind. For example, just two days after PayPal made the announcement, Central Bank of Nigeria’s Chief Information Officer, Taiwo Longe disclosed that Money Deposit Banks in the country lost about N40 billion (about $250 million)  to internet fraud in 2013 alone. So in reality, internet fraudsters have not all disappeared from Nigeria.

The only reason PayPal decided it was time to take the plunge was because, recently, MasterCard Inc, the world’s second-largest debit and credit card company, and a PayPal rival in payment processing, said it was working with the Nigerian government on a pilot to overlay payment technology on a new national identity card.

Scared of its competition’s tightening grip on vibrant huge markets like Nigeria, it decided to take the plunge. Competition, nothing but competition compelled PayPal to make the move.

It is however important to note that PayPal’s fear of fraud is justifiable, having lost millions of dollars to internet fraud in the past, but isolating Nigeria was not justifiable, as this concern is a global one.

But this is a lesson for PayPal and all foreign investors looking to invest in Africa’s biggest economy. Business is business and risks are risks. It was a business mistake isolating this vibrant market on a basis of mere suspicion of its people. The discrimination was unwarranted. It is unlikely if this move will outsmart the competition especially if MasterCard’s plan of overlaying payment technology on the national identity card sails through.

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