Nigeria is hungry for e-commerce

Due to some specific reasons Africa was isolated from the goods of civilization for a long time. Though some parts of this "wild" continent are still in that isolation some countries began their rapid development.

Despite the fact that the ease and convenience technology enables had been taken for granted elsewhere and was slow in coming to Nigeria, when it finally came, Nigerians who had been hungry for it embraced it like a man dying of thirst who finally comes across an ocean. This is the most apt way to describe the speed with which Nigerians are embracing technology.

The growing adoption of electronic forms of payment in the country has become a revolution that has astounded stakeholders. From less than 50,000 transactions recorded on the Interswitch network four years ago, it has increased to over 51,000,000 per month as at March 2008.

Mitchel Elegbe, the Managing Director of Interswitch, a payment solutions platform provider with 25 Nigerian Banks on its platform confirmed that the network has witnessed increased transactions with the adoption of technology by Nigerians. He stated that by March 2007, the network witnessed 13.6 million transactions, which increased fundamentally to 51.2million as at March 2008. Elegbe, added that in 2007, the network recorded a growth of 276 .2 per cent with a volume of 271 million transactions worth N430 billion across its entire network from different channels-ATMs, POS terminals, mobile, Internet, and bank branches using the network.

That Nigerians have stepped up their game is not in doubt with over 21 million cards in circulation as against 11 million that was in circulation a year ago. A breakdown of the figures, showed that the use of cards has become part and parcel of Nigerians as 14.4 million bank debit cards are being used daily and 7 million cash cards are currently in use across the nooks and cranny of the federation.

A number of factors have been identified as the tonic that has driven the uptake of e transactions in the country. One is the liberalization of the telecoms industry that brought in the GSM revolution. The spread of the technology with the benefits which has led to the nation witnessing an increased subscriber base from less than half a million to over 60 million has driven the spread of electronic banking.

Another factor is the consolidation in the banking industry, which has renewed confidence in the sector and put more money in the hands of the banks that survived the consolidation. With more money to invest, Elegbe, reiterated that banks now looked for creative ways through which their customers could conveniently have access to their funds 24/7 for a small fee. Competition brought about by consolidation also renewed the urge of banks to deploy the platform of technology to satisfy their customers and make things easy for them. There is currently no bank in Nigeria that does not offer electronic banking services. It has become a viable way of doing business in the country and despite little hiccups here and there, it is a platform that has come to stay. For example the card business is said to contribute as much as 30% to the bottom lines of banking institutions in developed economies. Nigerian banks have redefined themselves and now offer value added services geared at ensuring ease and convenience for their customers, reducing overheads, increasing profitability by redirecting the energy of their members of staff via moving small cash and non cash transactions to channels outside the banking halls. There are currently 4500 ATMS as opposed to 1060 available a year ago on the Interswitch platform. While POS terminals have increased from 3300, to over 8000.

The rise in the adoption of the electronic model apart from being driven by the need for electronic services has been driven by the love of Nigerians for new things and for technology. The surprising part of this is that the uptake of technology in the nation cuts across all classes of people. Okada riders, market women and artisans make as much use of this e payment platform as well as the upwardly mobile professionals. With the mass market in Nigeria constituting about 70% of the nations Gross Domestic Product, the impact of deploying Cards and other electronic mode of banking in the country has led to increased reach as customers can now access their accounts even at locations where their banks are not located through the electronic banking model. For example a customer can with the use of his mobile phone or ATMs or POS access his account balance, withdraw cash or print out account balances etc. The e model also leads to low operational costs, increased operational efficiency, removing cost of cash transactions, multicard and multi application availability, reduced congestions in banking halls amongst others.

With professionals and stakeholders in the sector predicting that the future of the nation's banking industry lies in the deployment of Cards be it the chip, stripe, debit, magnetic or credit type. The key to driving relationships between a bank and its customer lies in offering superior, consistent and convenient services driven by technology that will ensure that Nigerians become a reference point as a digitally aware and knowledgeable people in Africa.