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Google & Paypal Leaving Cash on the Table: ePayment Business Opportunity in Africa

By Wayan Vota on October 7, 2009

Were you excited to hear that Google now has location-aware AdWords for Kenya and South Africa? I was overjoyed that Google is paying closer attention to African consumers and content producers, until Miguel pointed out one small issue:

Getting cash in African hands

[T]here is no mention of how people from Africa are to either pay for AdWords or for content publishers to be paid for AdSense displays. As I’ve mentioned before, Google has no practical payment set up for anywhere in all of Sub-Saharan Africa.

Google’s lack of a payment system effects more than just its own customers – it holds back the entire web development community in Africa. How can organized efforts like Coded in Country or even personal projects hire Africans if we can’t pay them?

Before you suggest Paypal, realize that it too does not support payments to anyone in Sub-Sahara Africa. It even actively harasses Americans in Africa who are legitimate, long-term customers, just because of their IP address.

Opportunity in Discrimination

Where others decry the lack of ePayment services, I like to look at an empty glass as opportunity – there is a demand for ePayment systems in Africa and the company that can fill this glass will be richly rewarded. But don’t take my word for it. Here is Oluniyi David Ajao describing ePayments as the biggest business opportunity in West Africa:

Note that there are some limited international systems and a few decent nationwide systems in existance. Mac-Jordan has described Ghana’s cashless society and E-zwich, and Rachel’s Bargain Corner see the emerging mPayment systems like Zap and M-PESA as a Kenyan eCommerce advantage.

But its a pan-African payment system that will, like David says, really empower intra-African eCommerce and online businesses – maybe even more than the current bandwidth bonanza.

Until then, this business opportunity is leaving cash on the table. Who will be the first to grab it?


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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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5 Comments to “Google & Paypal Leaving Cash on the Table: ePayment Business Opportunity in Africa”

  1. Clement says:

    I wrote about the same some time in 2007.From the discussion that I ensued, I noted that Paypal and the like think that Africa is still insecure for such systems.

  2. Wayan Vota says:

    Glad you’ve written about Paypal’s dislike of African business. I think David Ajao says it well in this post about working with PayPal in Nigeria:

    Q: How do I operate a paypal account in Nigeria safe and secure without limitation?

    A: There is no safe way of operating Paypal from Nigeria. Since Nigeria is not welcome, they would find out your connection with Nigeria and limit your Paypal account automatically, asking you to supply some documentation in a bid to keep their system safe for everyone.

    http://www.davidajao.com/blog/2009/10/05/how-to-use-paypal-in-nigeria/

  3. theresac says:

    A pan-African payment system is a great idea on paper; however, it’s pretty unrealistic in practice. Our banks can’t even communicate well (or cheaply!). Transfering money is an expensive mess, whether you go through banks or Western Union, or any other mechanism.

    To be honest, I don’t see Google or PayPal fulfilling the role of payment providor in sub-Saharan Africa. The risks are big, and anti-fraud regulation in the States makes entering the African market cost prohibative. Don’t forget that there are still European countries that aren’t yet fully connected to PayPal (I wrote about this here: http://subjectverbobject.com/2009/09/09/on-why-i-dont-hate-on-paypal-for-not-operating-in-sub-saharan-africa/)

    Mobile payments, on the other hand, have the potential to be a game changer. Look at how MTN has manged to lower internaional call rates between MTN subscribers in West Africa. Calling a friend on MTN in Nigeria or Cameroon isn’t any more expensive than calling my neighbor. This is amazing. Now imagine if MTN managed to connect their nascent Mobile Money platform between countries. We could send money to any MTN subscriber in the world.

    Zain, Safaricom, MTN, and other mobile operators launching mobile payment systems should be taking a hard look at what it would take to connect countries, including whether banking regulations need to be changed, and how to do it. Interconnectivity is a big deal, and while it’s difficult to implement, could be a goldmine.

  4. Peter Damian says:

    Am always intrigued when people talk about Paypal as if they supervise e commerce on the we, i was limited by that thinking for about 3 yers, i attended seminars on how to open a clickbank account and paypal as if my e commerce life depended on it. one day the bulb went on in my head, i can market my info products and seminars to Nigerians and west african countries infact anywhere there is a GTB bank branch, i have done that for years and i have earned good money by focusing my attention to Nigeria and West Africa. lets focus our attention on Africa, presently it is on record that the greatest number of searches about affiliate marketing and internet marketing comes from Nigeria. very soon they will look for us. please not that Paypal and Clickbank are but just two online businesses. I use amazon for affiliate markting and commission junction, and my blogs are monitized for adsense and it is working for me. WHO NEEDS PAYPAL?

  5. Emmanuel says:

    It’s time we Africans stop relying on the U.S for everything. The earlier we start think of how to create our own online payment system; the better for all of us. It’s obvious that Africa and in particular Nigeria and South Africa are gradually taking their place on the internet. This fact is good enough for us to start thinking towards the direction of creating our own online payment system. Think of the positive effect it would have on the African economies.

    As for the online Merchants marketing their products with Paypal or whatever; I feel for them because they don’t know how much sales they’re losing on daily basis as a result of Paypal restriction. We’re better off using our own thing than relying on foreign aid.

    Talking of fraud: Who is deceiving who? Why is it that when one African commits a fraud it becomes a taboo? I’m not endorsing fraud, it’s just that fraud is everyday occurrence in the globe and therefore not an African thing. We all know what transpired between e-gold and Nigerians – how they stole from Nigerians operating e-gold by restricting access to their accounts simply because some Nigerians committed fraud according to e-gold.com

    What about all the American, European, and Asian hyip fraudsters using e-old? How come their accounts are not blocked or their countries blacklisted by e-gold as in the case of Nigeria? Why is Nigeria case always different? Thousands of credit card fraud are being committed in the U.S and these are not by Africans.

    So, who is deceiving who? I think this whole thing is to incapacitate we Africans from taking our destinies in our own hands. They know the self improvement, financial empowerment, and the education the internet offers so they’re doing everything possible to frustrate our internet activities and thereby keeping in us in relegation. We can’t just fold our hands and watch them do that to us and our grandchildren. We must rise up to the occasion by supporting the existing online payment system available to us like VTN.

    Who needs Paypal after all?

    NOTE: If you are using any online payment system based in the U.S or Canada, withdraw your funds always and don’t leave reasonable amount there; it’s better off in your local bank account else one day you’ll wake up and start hearing another thing. Be warned!!!