Payment platforms in Nigeria: A double - edged sword?

Payment platforms in Nigeria are a growing concern for everyone because we are in the cashless era which means an increase in digital purchase for goods and services and a decrease in physical cash payments.

Payment platforms in Nigeria have become so powerful with big businesses in Nigeria running and accepting online payments and this payment process needs to be closely examined and managed well enough to ensure money and customers are not slipping through the cracks.

So as a business, how do you ensure you don’t lose money and customers? You measure the success rate of your payment platform.

To measure the success rate of payment platforms, we need to look at the following factors;
  • The fear factor
  • The economic factor
  • The technical factor

The Fear Factor

A major challenge to the success rate of payment platforms in Nigeria is fear and we are going to dissect fear breaking it down into the 4 big payment platform fear.

Fear of Payment Platforms

  1. The fear of fraud
  2. The fear of the unknown
  3. The fear of doing something wrong
  4. The fear of privacy loss and identity theft

The fear of fraud

Nobody wants to be a victim of fraud or get scammed. 

While using a payment platform, if an illegal party tries to scam you, your payment platform should be able to protect you the buyer and also have a protection policy for the seller - this way, both parties are protected. PayPal does a very good job at this, their security is tight and their buyer and seller protection policy works.

People tend to tie online payments to fraud which can be correct in some instances but when it comes to established payment platforms known nationwide and worldwide, fear of fraud should drastically reduce because these established, big and known payment platforms can’t scam you because most of them thrive on customer reviews and feedback and having fraudulent activities run on their platforms is bad for business.

The fear of the unknown

There are very few people that would try something new for the first time without some sort of testimonial, review or recommendation from a friend or a trusted source and the reason behind this is they don’t understand your platform, it doesn’t look easy, it doesn’t look friendly and there’s no one to take them through the process.

The solution to this is having a user-friendly, easy to use payment platform with simple how-to guides showing users how to use and interact with your platform; also the need for an active 24/7 support is necessary

The fear of doing something wrong

No customer wants to be unsure when making payments because money is involved and any mistake would offset their bank accounts. 

So when a transaction fails at the final checkout page, not everyone will re-do that transaction because they don’t want to be double charged for a transaction.

This point ties in with the trust level in which the payment platform has acquired over the years with their customers.

The fear of privacy loss and identity theft

This is a big one because if your card details are stolen from you, your identity is most likely at risk but identity theft is not common in Nigeria. What we have is card theft and attempts to withdraw all your cash from a local ATM.

The quickest way around this is to never expose your card on social media, don’t use your cards on untrusted websites and always keep your card safe. When you receive an alert for a transaction you didn’t authorize, make some very quick calls to your account officer requesting your card to be blocked.

Economic Factors

These are economic issues surrounding payment platforms in Nigeria and how they affect the success rate of payments in Nigeria.
  • Refund Policy

Refund Policy

Every payment platform has it’s very own refund policy and how that policy affects the overall success rate of their platform is when there are unexplainable delays in customers’ refund and a constant cycle of that delayed refund process.

Customers’ reviews and feedback are so powerful in recent times and when you have a handful of customers complaining about delayed refund process or how the system didn’t work, there will be a drop in the usage of said payment platforms.

Platforms should have fair refund policies with quick refund payment times and 24/7 support to communicate with the customers assuring them they when and how they would get their refund.

Technical Factors

These are technical reasons why customers would use your payment platforms or won’t use it.
  1. Processing speed
  2. Payment Conversation rate
  3. Conversation rate by banks
  4. Conversation rate by cards

Processing Speed

payment platforms processing speed

This is the item it takes when an API call is made to the payment gateway and a response is received. The average processing speed is 1.51 seconds.

Fast payment platforms usually record high level of sales and give users the easy and smooth feeling when making transactions.

Payment Conversion Rate

payment platforms success rate

This is straightforward because this tells you how many transactions were successful and how many failed. If out of a 100 transactions, 75 were successful that means you have a 75% conversation rate and as a business your conversion rate is very important because it’s the line between receiving money or not receiving money so, increasing your payment conversation rate should be a top priority.

There are other reasons why a transaction may fail such as incorrect card information, insufficient funds, invalid billing address, invalid card numbers etc.

Conversion rate by Bank

Every bank has its own banking policy and when it’s changed it has a ripple effect on payment platforms which can lead to more failed transactions. When you notice your payment failed, don’t conclude that the payment platform is bad try another bank, it just might work.

Having multiple bank accounts to run your online payments is a good thing and can save you a ton of stress.

Conversion rate by Cards

payment platforms card success rate

In Nigeria, we have 3 major cards – VISA, MasterCard and Verve. Each card has its own unique properties and payment platform compatibility, which would determine the overall success rate of payment platforms in Nigeria.

Nigerian cards can now be divided into two categories – Naira and Dollar card. Some banks recently changed their online payment policy restricting international online payments on their Naira cards but international online payment is allowed when using their dollar cards.

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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