Nigeria needs an escrow based payment system to truly bridge the trust gap in e-commerce and eliminate pay on delivery.
All these years and no one has built this. I believe the reason is that an escrow system involves not just processing payment but also adjudication operations.
And considering the massive trust deficit and the low quality of products on the seller side, this adjudication operation is not trivial. It will also rely heavily on big data.
Basically, the escrow company will conceivably have to adjudicate thousands of cases a day. Some automatically.
In addition, features such as down payments (common in this part of the world) and automatic refund in the event of inadequate fulfillment will have to be catered for.
But this whole thing could be enormously lucrative. This goes beyond physical goods. This addresses services also. This bridges a trust deficit (huge value) and allows the player to by default capture a large part of that value.
This is what KongaPay was supposed to be. But that’s another story.
If one of the current payment processors does not capture this opportunity within the next 12 months, my money on who will pick this up is without question MTN.
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In 2014, we were going gangbusters. We were growing 20+% month on month. Lots of operational challenges but this one would be special. Then at 630am one day, I got a call from our head of fulfillment. The Nigeria Police has shut down the distribution centre. Details were murky.
Day 1: I typically spent a few hours in the office before heading to the DC but on this day, I hurried straight there. What I found were over 100 warehouse workers that were chased out of the facility milling about along with a platoon of policemen.
And mounds of sand - 6 feet high - dumped in front of and blocking the gates. I calmly pulled the officer in charge aside as asked what the problem was. He told me that we had defaulted on a loan to a bank (let’s call them starling) and the bank had taken charge over the DC.