Missing out big time: 4 reasons why PayPal should commit to Nigeria right now


PayPal has a one-sided relationship with Nigerians keen to transfer and accept cash online. So much so, that the popular digital wallet service is losing out on a massive potential market.

Picture this: Chris is a Nigerian startup co-founder whose company recently secured a deal from a United Kingdom-based client. The client wanted to use the Nigerian-based platform to market his products. Following the completion of the project, the client said he could only pay via PayPal since he read about the commencement of PayPal operations in Nigeria. What he didn’t read was the part that said the service is not yet supporting acceptance of funds in Nigeria. This forced Chris to use the PayPal account of a US-based relative to get the payment who then sent the funds via bank transfer, thus incurring more costs.

Chris is lucky. Not all of Nigerias 60-million internet users know someone who lives abroad, especially in countries where PayPal supports receiving payment. Despite the massive growth in Nigeria’s tech space, PayPal’s official operations in the country are an inconsequential drop in the nation’s big economy ocean.

It is therefore not surprising to note that several months after its launch in partnership with FirstBank of Nigeria, most of Nigeria’s leading platforms are yet to start accepting PayPal as means of payment. Those that are accepting PayPal didn’t register their accounts in Nigeria.

Read more: 5 reasons why Africa is fertile ground for blazing ecommerce growth

We spoke to Malvina Goldfeld, head of business development, sub-Saharan Africa at PayPal on the company’s operations in Nigeria with focus on the existence, or otherwise plans, to make it possible for PayPal customers in Nigeria to start accepting payments via their accounts they created within the country.

1. Fast adoption rate

Since launching in June 2014, she described PayPal’s performance in Nigeria as satisfactory going by the service’s adoption rate. “The PayPal adoption rate among Nigerians so far is very positive and we expect it to continue to grow in the future. We are happy we can facilitate and improve their online shopping experience and provide an easier, faster and most importantly more secure way for them to pay online,” Goldfeld said.

“We believe that this will only get better with time and are very excited to be a part of the ecommerce boom especially here in Nigeria,” she added.

Considering it boasts a population count of 173-million, Goldfield revealed Nigeria has millions of people who are eager to engage in online commerce and PayPal’s goal is to help them make payments more easily and securely. According to her, PayPal currently offers Nigerians the opportunity to register for free for a PayPal account to make payments on overseas websites.

She did add, however, that over time it plans to expand their service offering in Nigeria to include services that will lead to better experiences in online and mobile payment methods in the country.

2. It’s already Africa’s second largest market

In less than a year since it began operations in Nigeria, Goldfeld said Nigeria had risen to become PayPal’s second largest market in Africa suggesting that Nigerians widely welcome PayPal.

She further stated: “PayPal is active in 43 countries in sub-Saharan Africa. Our biggest market in the region is South Africa with over 1 million accounts, followed by Nigeria and Kenya and all are growing rapidly.”

Read more: Naspers invests $50-million in Nigerian ecommerce site Konga, says report

With that kind of massive adoption rate, it would be expected that PayPal would roll out more services and expand users’ capabilities in Nigeria — including getting more partners on board. This is not the case as the company said it has no immediate plans to either get new partners or allow its customers in Nigeria to enjoy more services.

3. It’s meeting a massive demand in the market

Goldfield described Nigeria as a very interesting market and over time, she said PayPal may expand its presence, but for now the company is satisfied to help Nigerians register for free for a PayPal account and make payments on overseas websites.

The PayPal business head added that as shopping online is increasingly popular and international shipping is consistently improving, consumers’ barriers when it comes to cross-border trade are slowly dissolving. She pointed research by Ipsos Mori, conducted in 2014, to back her claims:

What we found is that on average 56% of online shoppers already shop internationally, 25% indicated they expect to increase their international purchasing next year and another 10% indicated they expect to start shopping outside their home country. 63% of international shoppers use PayPal for their cross border shopping and we can only assume it has to do with the assurance that a trusted brand like PayPal offers its customers.

4. It has a competitive edge over local payment solutions

Many Nigerians, especially those that buy stuff online believe they are doing fine without PayPal and the company’s only competitive edge over others would be the ability of users to use the platform to accept payments which is not yet allowed in Nigeria.

In response, Goldfeld said PayPal has even more advantages than other platforms and she noted that the PayPal edge is hard to replicate. “Our advantage is that we make it possible for hundreds of millions of people in over 200 markets and countries to buy from millions of websites around the world more securely and easily.”

Moreover she notes that PayPal is a global symbol of trust. “That trust is built on 15 years of security, fraud and risk management expertise, as well as managing complex regulatory environments. While there are local payment providers around the world who offer different unique advantages, the PayPal advantages are hard to replicate.”

What’s holding it back?

Even though many believe the company is scared of Nigeria’s cybercrime notoriety, the PayPal rep said the decision to take things slow in Nigeria is entirely based on the requirements of investment, careful planning and preparation when entering a new market. These, according to her, are the reasons why the company does not have a timeline yet to roll-out more services in Nigeria.

Read more: Konga founder: Ecommerce should adopt Cecil John Rhodes’ approach to Africa

“Entering any new market requires investment as well as careful planning and preparation. We take our responsibility to manage people’s money very seriously,” she explained. “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. Based on how people respond, we can then decide how best to invest in expanding our presence. Unfortunately we do not have a timeline for this yet.”

The stakeholders in the Nigerian market believe PayPal is coming quite late to the scene in Nigeria and its reluctance in unveiling its full service bouquet in the country could make it lose potentially large revenues. But the company sees the Nigerian market as promising.

“We pride ourselves on helping Nigerian consumers to shop online at thousands of retailers around the world with greater ease and with the confidence that their financial information is kept more secure and not shared with the seller,” Goldfield said. “We have received strong feedback from the market that often when people try to make purchases online using their Nigerian credit cards, these transactions get blocked. We are very happy to be able to offer Nigerians a better acceptance rate, helping them complete their online purchases around the world.”

She concluded by saying PayPal will continue its growth in Africa by powering the people’s economy and enabling Africans to better integrate in the global marketplace. Let’s hope that PayPal will soon empower Nigeria’s growing online offerings to compete on the global stage.

Image via Handels Zeitung

Paul Adepoju


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