Standard Chartered Partnering Visa- The Missing Link in E-Commerce Payments?
The future of e-commerce in Nigeria and Africa has been discussed in many circles. It seems as though from the onset, the chances of success have been shaky as a result of reasons like ineffective delivery/logistics services, less than standard technology, and even consumer exposure. However, Standard Chartered has now collaborated with Visa on a campaign to encourage the adoption of e-commerce solutions during and post the Covid-19 pandemic.
As reported, this campaign seeks to provide convenient and secure cashless payment alternatives through the Standard Chartered Visa Debit card, QR payment solutions and their digital banking mobile app.
David Idoru, Head of Retail Banking at Standard Chartered West Africa said “ecommerce transactions make a large percentage of consumer spend and we want to be able to support consumers through our digital solution to help them make smart financial decisions especially during the Covid-19 period”. “This partnership with Visa also further emphasizes our commitment to the financial wellbeing of our clients, as Standard Chartered Visa Card holders, will enjoy numerous benefits including points earned using our 360 rewards program and zero surcharges at the point of sales through the ‘Safe is Smart’ initiative”, he added.
Could this be the move to Reinforce Profitability in the Nigerian Ecommerce Space?
We already see the rise in the preference for digital payments but the struggles of Nigerian ecommerce players like Jumia and Konga are also undeniable- Companies like Dealdey have even shut down operations since 2019.
Nigerians have somehow always been skeptical about e-payment services especially as it relates to ecommerce and it is easy to understand why. There have been complaints of unsuccessful or uncompleted transactions, misleading product quality, internet reach among others. Offline shops even deal with customers preferring payment with cash due to the instability in the digital payments process.
However, slowly we see that recent experiences have proven a bit more promising for ecommerce and e-payments in Nigeria. The bulk of this has to do with ecommerce services being innovative in their offerings during this pandemic which is turn reflects on their profitability and a rise in the attention they get from investors. For example, Nigeria’s TradeDepot raise $13million in two years, Foodlocker averages a monthly revenue of $30,000 according to Tech Crunch.
The biggest hurdle still is payments and the impact of Covid-19 further exposed the digital payment loophole that needs to be filled in these parts. The shopping culture has and continues to evolve and this new era of online shopping will most likely stick, turning a once unpromising sector to one with huge economic potential.
Still, there may be some concern with ecommerce moving to social media with companies like Facebook, WeChat among others transitioning into the online shop niche. Embedding e-commerce within social media is such a brilliant and powerful solution because it makes it even easier for customers to discover brands through social content and find the most unexpected products. Social commerce as an extension of ecommerce also complicates the dynamics of the online shopping space. One may have to give way for the other and if these social media companies take off in this space, the future of ecommerce sites may be looking quite bleak.
According to Quartz, the average amount a Nigerian online shoppers spends on ecommerce is $44 which speaks volume of the spending culture of the economy which may or may not be causing the shift in investor attention away from e-commerce to fintech. This could also explain why many companies like Jumia have also evolved in their business models and begun offering e-payment solutions as well as ecommerce services. The latest annual funding report by Partech Africa shows online commerce platforms received only 6.1% of total funding, far less than dominant fintech startups.
Regardless, Ecommerce and online shopping will be a top contributor in the evolvement of the Nigerian digital economy and more companies should continue in line with Visa and Standard Charter in the offering of payment solutions that are reliable, safe and secure for Nigerian online consumers to further secure the smooth transitioning of this trend.