Taking Nigerians cashless: Q&A with PayPal’s business lead for Africa

Nigeria’s 170-million plus population has an estimated 60-million internet users, making it the largest potential market for PayPal of all the countries it has entered in recent months.

Before now, attempting to use PayPal in Nigeria would have led to the blocking of your PayPal account, with the service hardly viewing the country in the most favourable light. However, it seems all that is changing, as the country’s young professionals with disposable income come online in search of places to spend their cash.

This week, PayPal made the trip to Lagos, Nigeria, where it officially launched the service with its bank partner, First Bank of Nigeria. We caught up with PayPal’s Head of Business Development for sub-Saharan Africa, Malvina Goldfeld, to discuss the move into Nigeria and how it hopes to turn a cash-based economy cashless.

Ventureburn: Why are you launching in Nigeria, considering it is a predominantly cash-based economy?

Malvina Goldfeld: PayPal’s success is based on the trust and reassurance we provide for the owners of 152-million active accounts across 203 markets. In addition to the reassurance that comes from not sharing financial information with sellers, we also offer PayPal Buyer Protection on certain items which means that people can reclaim funds if covered items do not turn up or are not as described.

We believe that our strong value proposition will help drive people away from cash-on-delivery and towards paying with PayPal for their online purchases. Moreover, when shopping on international websites cash is not an option, and now that we have opened services in Nigeria, Nigerians can enjoy using PayPal when they buy goods and services online. We have seen an enthusiastic response from Nigerians since we introduced services just over one month ago. Clearly, people feel a need for the trust and reassurance that comes from paying with a PayPal account.

VB: Who are you partnering with in Nigeria?

MG: Anyone with an internet-enabled credit or debit card can register for a PayPal account. We have a special partnership with First Bank of Nigeria (FBN), in which PayPal accounts opened through FBN are immediately verified.

Customers opening an account directly on the PayPal website will need to verify their debit or credit card linked to their PayPal account to lift transaction limits. We are launching with FBN in this manner because we see a synergy between FBN’s knowledge of the local Nigerian market and PayPal’s extensive global network – and with this synergy, a promising partnership in Nigeria. This exclusive partnership with FBN in Nigeria mirrors the relationships PayPal has with Equity Bank in Kenya and First National Bank in South Africa.

VB: Why now? Is it because of the ecommerce boom?

MG: Entering any new market requires investment as well as careful planning and preparation. We take our responsibility to manage people’s money very seriously. Enabling services for paying on overseas websites allows us to monitor and assess how PayPal is received in Nigeria and to help improve our service.

Our aim is to build demand among local consumers and introduce our global network of merchants to the new market opportunities. Ecommerce is certainly becoming more popular in Nigeria. There are millions of people in Nigeria who are eager to engage in online commerce and we want to help make online payments simpler, easier and more secure.

VB: The existing ecommerce players have pretty much owned the market using home-brewed payment solutions. How does PayPal plan to counteract this?

MG: Our advantage is that we make it possible for hundreds of millions of people in over 200 markets to buy from millions of websites around the world more safely and easily. We are a global symbol of trust: people can make payments confidently knowing we do not share their financial information with anyone; merchants can accept payments reassured that PayPal has authorized the transaction. While there are local payment providers around the world who offer different unique advantages, the PayPal advantages are hard to replicate.

VB: Are the service’s existing security measures enough for Nigeria or will it be taking extra precautions?

MG: Naturally, every country and market has its risks and opportunities and we have spent more than a decade building a risk management infrastructure that can be adapted to new market opportunities. We take our responsibility to manage people’s money very seriously and we don’t enter a new market unless we believe we can manage the risks.

PayPal’s long-standing reputation for ensuring security and managing fraud means that we are well poised to provide a secure way for people to transfer money. Our aim is to help people in Nigeria and around the globe gain greater access to economic opportunity and greater control over their money.

VB: How does the service plan to overcome the trust issues Nigerians have around any form of online payment?

MG: The evidence points to the contrary: more people are using online payment systems in Nigeria every day. Ultimately, however, people will decide. There has been an enthusiastic response from Nigerians since PayPal introduced services just over one month ago. Clearly people enjoy the trust and reassurance that comes from paying from a PayPal account. We believe that it is only a matter of time until people feel safe paying online, it’s a process that took place in many other countries around the world and Nigeria is following the trend.