Category: Business

Read Adedeji Olowe’s take on business, business models, and other transformational topics about business in Nigeria, Africa, and the world.

Nigeria has 17M Internet Users, More or Less

Some people have been throwing some fantastical numbers about Nigeria having 43 million internet users.

I really don’t know who cooked up this ultra-sloppy data but no wonder the over-creamed salad of consultancy advices smell like rancid skimmed milk.
If Nigeria has 43 million internet users then I probably have a pink elephant, with wings, prancing around my backyard.

So how many do we have? Judging from MTN’s latest financials (2012), they have 3.8 million smart devices (those that can consume internet without choking up – actually MTN is so parsimonious that not even a 12K US Robotics modem can choke on it) and 201,000 dongles. That comes to 4M internet devices (many being fondle-slabs). Since MTN has 47.5% market ownership, we can extrapolate 8.42M internet devices. If we are optimistic, can we argue that 2 people use a device (Nobody shares my phone with me though). Maybe 17M users. Far cry from 43M.

Why this 43M magical number is apparently not wrong to smart pant consultants baffles me.

Crashing the Cost of Banking: The Bitter Sweet Experience

The Central Bank (of Nigeria, if you really want to know) has been at the fore-front of financial inclusion, and oh, at the forefront of cashless economy.

Obviously they decided to mash the two together.

Kudos can be given to CBN for forcefully yanking our sorry backside from comfortable banking to make things really cashless. Considering that government and regulators are not known for speed or innovation, this is extremely commendable.

So, the CBN started the cashless thingy, did a million road shows and I guess the people we hardly see, the real banking customers, complained about the cost of everything. CBN came back and said, “From December 17, 2012, thou shalt not demand for N100 when your customers use other banks ATMs again!”

What?

You see, the N100 from ATM is almost synonymous with N20 collected by Askaris. You can’t dodge it. But then it cost money, I mean real money – mostly in Benjamins, to make the ATMs and other e-things work. Nothing goes for nothing.

The NCC came around and said, “From February 2013, thou shalt not collect more than N4 from SMS sent within Nigeria.” That is going to hit the pretty backside of SMS alerts. That itself is a story for another day.

Well, the CBN is not done yet – there wouldn’t be any minimum balance any minimum balance anymore. By this time, bankers are looking around bewildered.

Ok, so where do this all lead to? Simple English: Financial Inclusion.
The reality is, the cost of banking could be a barrier to quite a number of customers. Better put, most customers. Take the annoyances – COT, minimum opening balance, minimum balance, ATM fees, transfer fees, bla bla. Customers simply run for the gates. By crashing the fees, CBN is making sure no one has a real excuse for not having an account.

I can see this game evolving over time – I expect that CBN might banish some other fees, put a max on interest that can be charged on loans, a minimum percentage that must be lent to SME (wait, what happened to that 10% of PBT to be invested in SMEs?). Some even think the days of COT are numbered.

The take from everyone is this – in the short term, there would be a dip in revenue but with rapidly growing number of customers flocking to the banks and e-channels, the revenue and potentials will pick-up. This happened in telecoms, I hope and sincerely pray it happens in banking.

Poor Support and Initiatives from Payment Gateway Providers Kills ECommerce in Nigeria

In my recent online payment experiments, I worked with both Magento and OpenCart. While Magento is complex enough to make even a bishop go raving mad, it still came with some payment modules/plugins out of the box. Same for OpenCart. Conspicuously missing are the modules from top payment gateways in Nigeria.

From my own firsthand experience, handcrafting APIs for payment is a bore. It has significantly retarded the growth of ecommerce in Nigeria more than anything else.

If you want to accept payment online in Nigeria today, you are limited to payment gateways from:

  • InterSwitch and/or UPSL (ValuCard)
  • Banks and their proprietary systems
  • Other independent providers such as Pay4Me, etc.

Thereafter you are on your own. One, you don’t have any pre-cooked modules or plugins you can easily install on the most common payment applications such as OpenCart, Magento, PrestaShop, ZenCart, etc. and also their integration documentations are lame, non-existent or sometimes downright incorrect. Support is patchy and poor, and they want to charge you for every time you take a breath.

So how can life be easier? Payment gateway providers should make available modules or plugins that can be used for probably the 10 commonest online engines, including the venerable old WordPress and Joomla (yes, some people do use such). Also, they should have a vibrant support system such as an online forum – with sample codes, reviews, user interactions, blah blah blah.
This should create a network effect; as more shops go online, much more will like to go online. Ultimately anyone with a card will always have something to buy online.

How do I Accept Payments on my Website? Part 4

The adventure to put up an ecommerce website has been a very exciting one. Or maybe that’s what I wished for.

I got the website up and running with great support from siteground.com; slapped on an SSL; got a merchant account from the bank and also the integration document.

Then it stopped looking like an adventure.

Magento is powerful, indeed powerful enough to run some of the most complex shopping websites out there. In fact, I have a friend who’s contracted some dudes in India to help him use Magento for an online shopping mall.

Magento has settings for apparently everything under the sun. Getting the basic shop online has been one hell of a job that I’m still grappling with. There are gazillion settings and codes and parameters and yada yada to check and configure.

Or maybe I’m getting old and em, em, gray and this is for script kiddies. Or maybe not.

The good news is I should get this fixed before the end of the week and then we can put a pretty makeup of a nice theme on it.

Until then I need more than 5 truckloads of luck.