Cashing in on mobility to boost African E-commerce

Technology is helping to mould a more connected world, one where people are able to interact as they want or shop and transact in a way that fits their lifestyles. E-commerce is one of the most significant innovations of our lifetime, and is helping more merchants connect with more consumers around the globe at a speed never seen before.

But, are banks taking this opportunity seriously and is enough being done to ensure e-commerce is not only supported but that transactions are secured?

The public and private sectors definitely cannot ignore the incredible possibilities the online ecosystem presents, especially when looking at the facts. The African e-commerce market is forecasted to grow into a USD $50 billion industry by 2018 and this should come as no surprise considering that seven of the 10 fastest growing internet populations in the world are in Africa.

Ultimately the online ecosystem presents a unique opportunity for banks, as it is empowering more consumers who want to gain access to more efficient ways of engaging with their world, whether paying bills or planning the family holiday – but growth in the sector will be slow without real investment and resource allocation from financial institutions.

If you consider the penetration of the mobile device in Africa, and the fact that more people are shopping online via a mobile or table than ever before, it is clear that new technologies will help to stabilise and grow e-commerce. Better infrastructure will however be needed to achieve this, including better internet connection.

Consumers are more willing to try new technology solutions, and with mobile penetration currently at over 85 percent and nearly half a billion Africans subscribing to mobile services, it is clear that this platform will help to drive growth through fresh opportunities.

The future for e-commerce is looking bright, with player’s local players revolutionising the e-commerce space by making the overall experience more efficient and secure for both merchants and consumers.  It is for this reason that Mastercard partners with leading organisations – such as Jumia and NetPlus – to build stronger and safer digital payment ecosystems that will allow merchants to grow their businesses and consumers to buy online with greater peace of mind.

Banks and financial service provider’s cannot afford to be left behind on the e-commerce journey and those that realise this potential and invest in developing and rolling out solutions that make it easier for Africans to purchase goods and services online without the hassle and danger of cash will undoubtedly reap the benefit.

Over the past 12 months more banks have looked to mobile than ever before as a tool to connect with their customers, allowing them to transact like never before. In a short while, many of these mobile banking apps will  carry Masterpass QR, a mobile solution developed by Mastercard to streamline person to merchant payments by working to overcome infrastructure challenges – and giving them a smart way to pay in-store and in the near future, online.

That being said, there are still of course challenges facing the online retail sector on the continent. A major hurdle for the rapid uptake of e-commerce for instance is the cost of broadband. Even as the footprint of reliable connectivity as well as the general speed of connections increase across the continent, pricing still remains a significant barrier to getting more and more households adopting broadband internet connectivity.

Additionally logistics, including unreliable postal services and frequent electricity outages are a major obstacle to overcome. There is also a real need for more secure payment options for consumers given that cash is still widely used by consumers as well as e-retailers. It is estimated that between 65 and 95 percent of all online purchases are paid using cash on delivery indicating that consumers remain hesitate to pay online.

However, digital payment solutions will help curb this hesitation and meet the needs of both the consumer and the e-retailer, removing the risk of carrying cash but also the inconvenience of not having the correct amount available when your package is delivered. Who would feel comfortable carrying large amounts of cash around waiting on your new pair of sunglasses to arrive after your weekend online shopping spree, this just does not make sense and consumers are rightfully demanding more from their favourite online stores.

Partnerships like those being developed by Mastercard is helping to educate consumers but also provide solutions that allow them to be more secure when online, and also gives them some sense of control over the process.

In order to grow and develop the e-commerce sector, all stakeholders especially the banking sector must work to remove cash from the online sector and replace it with digital solutions using the latest technology.


By Omokehinde Adebanjo, Vice President & Area Business Head for West Africa, Mastercard


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