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Needing internet payment systems before eCommerce is just an excuse!

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A recent funding development with an eCommerce startup in Nigeria got us discussing here about the chances locally for successful eCommerce startups and the conditions conducive for this. When there’s talk about eCommerce in Zimbabwe, or at least monetising web and mobile startups, there’s always the mention that we need a online payments before any eCommerce startups can succeed.

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It’s said therefore then that since PayPal is a non-starter, the banks don’t not serious about Vpayments, and Econet too is taking time making EcoCash internet-ready (or at least allowing startups to integrate) there’s no hope for eCommerce yet.

Experiences in other developing and emerging markets however show that this is just largely an excuse for failure to execute. Developed payment systems have not been a precondition for the successes that have been registered in these markets and Zimbabwe shouldn’t be any different. Take Konga.com for example that just raised $25m in Series B funding. Konga founder, Sim Shagaya explains that credit card penetration is very low.

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E-commerce arrived in Africa at a very different time from when it arrived in the United States. At the time when Amazon was kicking into gear, there was a culture of credit card use, and the formation of digital payments. But here it is all happening at the same time. Card penetration is still low, people are still getting used to this idea of being able to pay for things electronically – and cash is still king

Flipkart‘s story in India is the same. In fact, their success is actually attributed to selling products on Cash on Delivery basis. It’s 60% of their business. And yet here we cry to each other, “Payments first. No monetisation on the internet before payments are in place!”

There are more examples; Experiences are the same in Philippines, Kenya, South Africa and others. The year 2013 has in many ways been the year of eCommerce in a lot of leading countries in emerging markets. This wasn’t the case for Zimbabwe. Of-course we have our own issues like a dwindling middle class and generally not enough money in the system which is the opposite in these other markets. But really we shouldn’t point to the lack of internet payment systems. We can change that in 2014.


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13 thoughts on “Needing internet payment systems before eCommerce is just an excuse!

  1. I think think this is a very valid point. eCommerce shops like Zimazon have been trading in Zimbabwe for years and they only enabled online payment methods recently. In addition, over 1 million banked individuals already have access to V-payments, and Visa is now available through legal channels via CBZ and Super Merchants.. Further more, there is RTGS, ZIPIT, COD, COC and cash deposit in account…

  2. Great points. Eh, so do the SaaS and consumer app people (aka digital products) resolve to the Send $20 in an envelope route :D. I had to let go of one startup of mine years ago because of payment complications, it was a pain working out physical solutions for wholly digital products

    1. The article was mainly focusing on eCommerce in the physical product sense in an online catalog that people can add to cart etc…

      However, I know for a fact that for products that are good enough, people are willing to do leg work. For example before the FBC Prepaid Mastercard I remember paying by
      – Going to bank to withdraw cash
      – Going to friend’s house and handing him the cash
      – Waiting for him to do the payment via PayPal or him asking his diaspora relative to to the payment.

      Long, manual, and painful but the truth is that many people locally have bought digital products like hosting, eBooks, Apple stuff from iTunes Soundcloud etc… this way. It’s not really about sending payment in an envelope, it’s about the seller finding ways to collect the money and for products so good they demand this of the customer, lots of customers are willing to do the leg work or workarounds. Especially developers who can easily pay for annual access to platform/API etc…

      To say, I’m not going to do it because I’m waiting for payment systems….mmm just an excuse boss.

      1. I’m with you. I meant than my startup Rent-Or-Buy targeted lay people who do not do VISA & Banks. If they are letting one room in a house with four it’s a sign that they won’t be on VISA/MasterCard (or the guy looking to move into that room). So I had trouble scaling manual payments because someone would make a transfer and expect to get their access instantly (because the houses weren’t waiting although at the start waiting wasn’t a problem when there were a few users).

        Definitely If i’m starting the next Buffer targeted at businesses then surely physical bank deposits and VISA/MasterCard aren’t too much to ask for from customers. So yes, inexcusable!

        1. I see. Just curious, would it have worked better if you had a guy on a bike that goes to collect the cash, then enables access immediately upon receiving cash via netbook & dongle (cheap 3G device)?

          1. Was a broke freshman at the time, didn’t have much to spare. Maybe if I had enough and employed two people back then: one for day and another for night who would do the reconciling then yeah. We even had an office one where people could come in to make the payments, but no one did 😀

            1. Yeah, when you have nothing, there’s nothing to start with. A solution maybe could be selling lifetime accounts to the first 50 or so paying customers and therefore charging a premium of, say, $40.
              And this larger amount would be worth hiring a guy that’s already doing transport logistics (a taxi driver?) to do the collections in return for a revenue split. i don’t know. just randomly thinking of workarounds.
              May not work coz person doesn’t see $40 lifetime account value for a service that’s just start. But maybe estate agents could see value in $100 lifetime accounts? or 2 year accounts?

              1. Estate agents LOVE the Classifieds ka remember. I had targeted the smaller market (aka cutting out the middle men) where I guess a person uses the site maybe once in a year (before they move or in the other case look for a new lodger) so that kind of once-off pricing couldn’t really work

  3. I think the problem is not Internet Payment systems, but critical mass. Zimbabwe has a small population compared to other countries that have successfully executed ecommerce [Nigeria, India].

    1. I agree, taka jutwa into family planning. Nyika dziri densely populated dzino benefita on many fronts….

  4. We have sadly developed a culture of waiting for someone to do something first then all we do is copy, c’mon Zimbos we can start our own E-commerce in the current environment..

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