Humans, Not Technology to Blame for eCommerce Cash-On-Delivery

Whether saturated or not, the local eCommerce industry is such that a diligent and intelligent entrepreneur can still carve a niche by looking at untouched areas in the entire value chain.

No doubt, e-commerce is such an ecosystem that should even spur ‘upload’ as against the penchant for ‘download’ among Nigerians. E-commerce offers retailers elaborate window to establish an online presence, as over 80% of the online population have used the Internet to purchase something.

Still in doubt as to why e-commerce platforms will continue to berth, almost on daily basis? Consider the fact that Google recorded ten million new internet users from Nigeria in 2015; it is obvious that e-commerce represents an ebullient pathway to attract/reaching out to new customers and will continue to expand.

Unlike physical retail which principally relies on branding and customer relationships, e-commerce entails an added benefit of driving traffic from the search engines. If a customer is carrying out a search for say photo editing software, he may land on your platform even though he has never heard of you before.

To the customers, e-commerce connotes ‘immediacy’ - no going to the shops or waiting in queues, provided you are connected to the internet; goods bought online tend to be cheaper, depending on the platform and delivery arrangements; the range of goods available is vast and lets you compare prices and terms various options, especially when the paginations are well tailored; the shop never closes. It rolls on 24-hours daily and you will locate what you want much quicker while exposing you to global markets. E-commerce provides immediate feedback on prices, features, etc.

Shopping online particularly in this climate, is usually smooth until it gets to the payment stage. Principally, e-payment and cash-on-delivery are amongst the known payment options adopted by e-commerce platforms in Nigeria.

We can categorize existing payment solutions into three groups: bank wires, payment cards, (Credit & Debit) and electronic payment systems. Paypernet's recent research on how the characteristics of these payment systems shows that these differ substantially, however, it arrived at the conclusion that “to be suitable for e-commerce, a payment system should probably have certain characteristics, such as: easy to use by the end-user; conceptually easy to understand; does not require customers or vendors to sign up before use; highly secured for customers and vendors alike; low cost; allows micropayments; anonymous; requires no additional hardware or software on the side of the client; able to develop itself independent of partners that might see the system as a threat”.

To me, the Nigerian e-commerce space has a robust e-payment system that meets the above sort of criteria. For instance, SimplePay is such a wonderful solution that allows any business or consumer with an e-mail address and a bank account to securely, conveniently and cost-effectively send and receive payments online or through their mobile phones. This app has the backing of the E-PPAN.

In August 2014, SimplePay partnered with Consumer Bureau de Change to allow Nigerians in the diaspora to instantly fund SimplePay accounts with foreign funds. In other words, any e-commerce platform can fuse into the app.

Elsewhere, KongaPay is offering fast and easy one-time signup; links your debit cards and bank accounts for seamless transfers and payments; no tokens, no CVV. Pay with just your mobile phone; set up payment subscriptions and recurring payments; receive money through your mobile number without a bank account; make airtime and cable TV payments, among others. Sensitive payment information is not stored on KongaPay. In fact, nothing can happen unless you authorize it.

To maintain the integrity of transactions between parties on the platform, all personal and business accounts are verified and logged with the BVN service and the technology is constantly monitoring, evolving, and adapting in real-time to new forms of fraud as they arise. There is no need pretending that technology does not sometimes fail. It does sometimes fail, but the rate of failure has drastically reduced and cannot be the sole reason for an e-commerce platform to rule out e-payment, going all the way cash-on-delivery!

The technology is there, and the time is ripe for cashless system. So, why is cash-on-delivery thriving in the country? A screaming headline by TechCabal reads: ‘Cash on delivery and free delivery: worst things to happen to ecommerce in Nigeria – drinks.ng founder, Lanre Akinlagun’.

Humans are to blame. The e-commerce promoters, on their part, are so much in a hurry to sell and make gains, without critically thinking on patterning the system to global standards. To me, ecommerce without e-payment is a mere glorified conventional trade. At this point, the e-commerce platforms need to hold their grounds on e-payment. Someone who trusts ATM transactions should be able to pay online. It is obvious that education is lacking and needs to be focused on.

Lack of trust on ‘anything internet payment’ will remain an issue the world over, but how are other countries tackling the perennial challenge? User education!

In as much as one expects stricter regulations to restore confidence in the people, or tie the noose on dubious platforms, the Cyber Security Law 2015 can serve some purpose here. Nevertheless, the key lies with the supposed genuine e-commerce platforms to raise alarm when ‘illegitimate’ operators deploy their dragnets in wait for the innocent online shoppers. Intelligence sharing will go a long way in curtailing online fraud.

In all, user education will help to reduce, if not eliminate the over-dependence on cash-on-delivery. It not only negates the Central Bank of Nigeria, (CBN’s), cashless policy, but exposing the deliverymen/companies to attacks and/or the temptation of theft.