Payment Gateways in Nigeria: Definition, Types & Examples


Payment gateways are the means with which a seller exchanges his product for immediate payment.
These payments are done through the internet with no physical interaction. This also removes the need for hand-to-hand cash-based transactions.

Payment gateways in Nigeria are the applications that enable an online store or website request payment for goods and services from customers.

Payment gateways authorize the transfer of funds between a buyer and seller.

Payment Gateways in Nigeria

Payment Gateway Process

The payment gateway process begins when the buyer clicks on ORDER or BUY and it continues until payment is made and the transaction is finalized with receipt generated.

To get a better understanding of the payment gateway process, we need to go deeper. Let us begin from the perspective of the buyer;

1. Buyer clicks on ORDER NOW or BUY NOW.
2. Data encryption starts.
3. He is taken to the payment gateway page where he/she is asked to put in some details like your;
  • Credit or Debit card number.
  • Card holder’s name which means the name that appears on the card.
  • Card expiry date.
  • Card’s CVV number: This can be found at the back of your card, it consists of 3 digits which act as your online PIN. These numbers should always be kept hidden.
  • The billing address is the same address you submitted to your bank when creating your bank account, so make sure it corresponds to your bank account’s address.
  • Shipping address: That’s if a physical item is involved in the transaction.
4. Payment gateway sends all the above information to be processed and verified by the card association to ensure you are the one making the purchase and it also verifies that the payment method has the required fund for the transaction.

5. The credit card issuing bank approves the request if everything is correct and verified, if you made a simple mistake like put in the wrong card expiry date, the transaction won’t go through.

6. After approving the transaction, most payment gateways will generate a receipt showing details of the transaction.

7. Transaction successful.

This process is mostly used across online shopping sites in Nigeria like Jumia Global Payment Gateway which requires you pay first for the product before they buy and ship it to you in Nigeria and also internationally with big sites like Amazon using this payment gateway process which involves card payments.

Types of Payment Gateways

There are two types of payment gateways, hosted and non-hosted payment gateway.

Hosted Payment Gateways 


types of Payment Gateways in Nigeria

This type of payment gateway redirects customers from your site to the payment page which is different from your website.

With this type of payment gateway, whenever a customer clicks on PAY NOW or BUY NOW he/she will be taken away from your website and sent to the payment page which is hosted on the payment service provider.

Once the buyer gets to the payment page, he fills the form i.e. puts in card details such as credit card number, expiry date, card name and CVV number at the back of the card.

After payment is done, the customer will receive a transaction successful message and will be redirected back to the online store or shopping site to finish the process.

This can be seen as a two-way stream with payment gateways and website at opposite ends and how information flows from one to another and vice versa.
Commissions are paid to the payment services whenever a buyer makes a transaction.

PROS

  1. Easy to set up.
  2. Customer’s information is secured because there is a double layer of security.
  3. It’s simple and straightforward.
  4. Good for new stores.
  5. Payment pages can be customized to add seller’s logo for more authenticity and customer reassurance.

CONS

  1. The seller doesn’t have total control over the checkout or payment process.
  2. Examples are PayPal standard, Payza.
  3. Examples of shopping websites that use this method: eBay.com

Integrated Payment Gateways


integrated Payment Gateways in Nigeria

An integrated payment gateway allows credit or debit card payment processing directly on your website without redirecting customers to another website or a 3rd party payment website.

These gateways give the seller total control over everything right from the product showcase to checkout and payment page. Everything is done on the website, no redirection happens when you use a non-hosted payment gateway.

Credit or debit card details are entered directly into the checkout page of your site and payment is processed through APIs without the need of taking customers to another website.

The transaction happens in real time and works seamlessly but the website owner would need to connect his e-commerce store to a gateway’s API.

PROS

  1. Seller has complete control over his site and checkout page.
  2. There’s flexibility. The website owner can choose how his checkout page UI would look like.
  3. Maximum Shopper Experience: When customers can complete all their transactions without leaving your site, they feel an extra level of security and confidence on your website.
  4. Good for large stores.

CONS

  1. Time-consuming and difficult to set up.
  2. Security is handled by the website owner so if the site owner doesn’t use the standard security measures, private sensitive customer information may be leaked from the site.
  3. Additional purchase of an SSL license is needed to add an extra layer of security which helps boosts the overall security of the website.

Example: Authorize.net
Examples of shopping websites that use this method: Amazon.com

Examples of Payment Gateways


examples of Payment Gateways in Nigeria

There are so many payment gateways used to facilitate online transactions between the buyers and sellers. There are international payment gateways and we also have payment gateways in Nigeria. A combination of both international and local payment gateways are going to be mentioned below.

These payment gateways are not listed in any order of importance.
  • PayPal
  • GPAY
  • Interswitch WebPAY
  • ETranzact
  • GTPay

1. PayPal


paypal Payment Gateways in Nigeria

PayPal is an international payment gateway with one of the best security in the world that started in 1999. Using PayPal always provides a sense of safety because I have the confidence that I can always get my money back even in sketchy situations.

PayPal is free to use for buyers, sellers, store owners, online shop owners can set up PayPal on their website with no integration or payment gateway fee. PayPal only collects a commission of 3.4% on every finalized transaction. They accept credit and debit card payments and in Nigeria PayPal is also available to us.

Using PayPal in Nigeria works well for buyers and not for sellers because when you create a Nigerian PayPal account, you can’t receive money which doesn’t work for Nigerian sellers, Nigerian store owners that want to use the PayPal payment gateway.

So PayPal is essentially used to pay for goods and services on international sites that decline the Nigerian debit or credit card. If they accept PayPal as one of their payment methods, you can easily link your Nigerian card to your PayPal account and pay using PayPal. This works on sites like ebay.com.

2. GPAY


gpay Payment Gateways in Nigeria

GPay is a utility payment gateway that deals in instant payment solutions with major roots in easy online payment for electricity bills, water and other utilities.

They provide world class business solutions such as collections and revenue optimization platforms and data analytics which would take your business to the next level.

3. Interswitch 


interswitch Payment Gateways in Nigeria

Interswitch started running around 2002 as a transaction switching and electronic payment processing company that builds and manages payment infrastructure and now they are African-focused integrated digital payments and e-commerce company that enables the electronic circulation of money as well as the exchange of values between buyer and seller.

In Nigeria, Quickteller can be seen as one of the biggest payment gateways which are widely used across multiple online shops and the country as a whole. They deal with credit or debit card payment which is linked to your bank account to enable you to buy goods online from online stores and as a seller, once you achieve their payment gateway license you can start receiving money for your goods and service with the money going straight to your bank account.

4. ETranzact

etransact Payment Gateways in Nigeria

They started operations in 2003 as payment solution platform and easy payment channel and now they are in over 5 countries: Nigeria, Ghana, U.K, Kenya, Zimbabwe and Cote d 'Ivoire. ETranzact has partnerships with up to 70 different Nigerian Universities, Government parastatals, Banks, Aviation sector also.

Etranzact is a multi-application, multi-network and multi-channel electronic payment gateway with the ability to credit multiple accounts simultaneously online in real-time.

They majorly deal in payment portals, accepts both international and local credit or debit cards and very useful to merchants.

5. GTPay

gtpay Payment Gateways in Nigeria

GTPay is a product of GTBank. GTPay has a unique feature where merchants or sellers get their money within 24 hours. This feature alone got a lot of merchants and sellers using their secured internet payment gateway which is known for instant transactions.

They accept credit or debit cards payment including internationally and local cards. They also have a useful monitoring log which is good for merchants because they get to track all the transactions done daily, weekly, monthly and even yearly.



TechAdvance

TechAdvance is a payment application development company with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organisations in Nigeria.

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