- Rose-Marie Bouboutou-Poos
- Broadcast Journalist
African e-commerce players are neglected by the major payment platforms and are faced with a difficulty: collecting their payments, but entrepreneurs have developed solutions. We present two of them in this article.
With the Covid 19 pandemic and social distancing, more and more of us are doing some of our shopping online.
Sales, promotions, holidays like Valentine’s Day, everything is put in place by e-merchants to get us to take out our bank card.
Now imagine having made juicy business with several sales to your credit, tens of thousands of CFA francs received electronically which appear positive on your e-commerce account but no way to cash them in your bank account or touch them cash.
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This is the puzzle faced by Valeska Tozo, an e-commerce entrepreneur based in Togo. She explains the difficulties of many actors:
“We are forced to limit ourselves to the local means that we have at our disposal such as Orange Money or Wave for example in Senegal which facilitates payment. In Togo, we have Flooz or T-Money but sometimes the connection does not go through and we do not can receive payments from abroad”.
For its international customers, who can nevertheless pay by credit card or PayPal, this is yet another headache.
“I have a Paypal account but sometimes we have difficulty withdrawing money and other means of payment, whether Stripe or others, do not actually allow us to cover several countries so we have to fall back on transfer agencies “, she explains.
“This has a big impact on business because the majority of people who are abroad have bank cards and use Paypal, so it’s easier for them to pay online than to line up to send a money transfer. , it discourages customers from placing the order or making the purchase,” laments Valeska Tozo.
A great potential
E-commerce is often presented as the way of the future.
Online retail in Africa has grown exponentially in recent years. Several factors contribute to this growth: the youngest and second largest population in the world. Also, internet penetration has increased due to the wide expansion of smartphones and mobile devices. This trend, further reinforced by the pandemic, is expected to continue.
According to the e-Conomy Africa 2020 report by Google and the International Finance Corporation (IFC), the digital economy in Africa could represent 5.2% of the continent’s GDP by 2025, or just over 180 billion dollars. dollars. This amount could reach $712 billion by 2050. So there is potential for a large digital market.
And many of these entrepreneurs are actually women entrepreneurs. According to the IFC, women make up half of e-commerce players in Africa.
But if digital payments are more and more widespread in Africa, e-commerce entrepreneurs in some countries of the Continent, neglected by the major payment platforms, are faced with a real difficulty unsuspected by many customers: collecting payments remotely. of their customers.
Solution 1: online banks
Luc Tolo Beavogui, Guinean entrepreneur based in Senegal, founder of Vamnom, a digital marketing agency, also experienced these limitations when he started in e-commerce.
“In reality, this is the first difficulty for most people who engage in digital. Most people in Africa cannot have Stripe (a credit card payment platform, editor’s note) and PayPal accounts are limited to just being able to pay online but not receive money and do business with it,” he explains.
This blockage prompted him to carry out in-depth research in order to develop “his recipe”, as he says himself, from which he now benefits other African e-merchants.
He discovered online banks like Payoneer and TransferWise that African entrepreneurs can use to affiliate with the two online payment behemoths Stripe and PayPal.
“These platforms accept all banks in Africa and suddenly it is possible to link your bank account with the major payment platforms. This is not an illegal loophole”, explains Luc Tolo Beavogui.
Today, its Vamnom structure helps merchants going online to set up means of payment.
Solution 2: African payment platforms
Idriss Marcial Monthe co-founded CinetPay. The idea germinated in 2009 when the entrepreneur decided to create a website in Côte d’Ivoire selling African domain names and hosting spaces.
“I found myself confronted very quickly with the problem of being able to accept payments online. I had to travel to go to customers to collect cash. The cost of transport ate up all my margin”, recalls the entrepreneur.
He successively opens 3 PayPal accounts with the addresses of friends or relatives residing in the West (France, Canada, Switzerland) but each time the accounts are closed by PayPal after a few months.
“Because you are an African company, you operate in Africa and you use an account that was opened in Europe, you do not have the right because PayPal is not authorized in your country. And each time PayPal closed our account, he blocked our money,” recalls Idriss Marcial Monthe.
Tired, he goes with his partner to Mobile Money operators to take their payment APIs.
“API” stands for Application Programming Interface. A payment API is an API specially designed to communicate information to banks to enable payments in a secure way on a website.
This is the ingredient of success that was missing in his business.
“We managed to convert 80% of our users with online payment,” he says.
“We realized that what we had developed as a solution to solve a problem we had was a business idea and we decided to create cinetpay, a payment aggregator to allow all those who trade online to accept any type of solution via our platform”, explains Idriss Marcial Monthe.
CinetPay is now present in 8 French-speaking African countries (Côte d’Ivoire, Senegal, Mali, Togo, Burkina Faso, Guinea Conakry, Cameroon, DR Congo) and the company has more than 7000 companies in its database.
Many other platforms are present on this market SycaPay, PayDunya, Touch Pay, Wizall Money or Bizao which have the particularity of all being based in Côte d’Ivoire.
Why are major payment platforms not accessible in Africa?
We contacted Stripe to find out why they weren’t open to entrepreneurs from French-speaking Africa. The platform told us that they recently acquired Nigeria-based Paystack to spearhead their efforts in Africa, including Nigeria, Ghana, and South Africa.
PayPal and 2CheckOut (the payment solution for Shopify and WordPress) did not respond to our requests for comment.
For Idriss Marcial Monthe, there are several reasons why these platforms are refractory to Africa.
“The regulations in many African countries are not sufficiently clear and readable for payment players who are used to being in highly regulated environments. The second reason is fraud because our countries are renowned for being countries where the level of fraud is the highest in the world The third reason is the risk posed by our different States because of political instability, lack of transparency etc. The last reason could be the opportunity: is it big enough for them to deploy on the territory?
The African platforms, African solutions to African problems, are a step in the right direction even if Luc Tolo Beavogui of Vamnom regrets that none covers all countries.
“There are only a few countries in it, there are no English-speaking countries, you have this means of payment but you are always limited. Imagine having 3 or more payment interfaces on your site to cover all the countries that is not ain’t pretty,” he said.
For diaspora entrepreneurs who would like to use them to cover African customers, access to these platforms is also reserved for structures registered in the WAEMU space.
The dream of the World Wide Web, the big village without borders is therefore not yet a reality for today in the field of e-commerce.