Thursday, August 24, 2006

Journey of an Afro-preneur: Online Payment

One of the biggest challenges my current idea is facing is the issue of enabling users to pay for the service/product online. I mentioned earlier on that credit cards still aren't the norm in Kenya and to date they are seen as a service only for the rich, even though this might not be completely true part of it is, since your income needs to be a minimum of Ksh30,000 per month equivalent to USD400 at the current exchange rate in order for you to qualify for a basic card which means its out of reach for a large percentage of the population. Fear of online fraud is also a challenge the credit card solution faces, due to lack of education or a well informed market, credit card holders in Kenya fear that all online transactions are open to fraud but so is every transaction even a barter trade (cowrie shells for a basket of fish) setup has its inherent fraud, this lack of knowledge needs to be addressed.

Integrating credit card payments onto the web app, albeit a tedious process would open the service to the percentage of the population who do have the cards and is definitely one way to go, but my biggest challenge is what about the remaining people who have no credit cards but have cash in the bank and would like access to the service/product?

The Debit Card hasn't missed my radar and I know that it can be used for transactions although most banks only support over the counter transactions thus rendering it almost useless for online transactions. The WebDOC suggested that we approach the banks with a strong proposal for the development of a local payment solution that would allow users to pay for services/products using their bank accounts, I've always confessed that am a true pessimist so I wasn't seeing this as an achievable option but am of the view that if the idea is strong enuff then it can be achieved especially with the smaller and more open banks.

One common method being used currently is the one where a user sends money from his phone to a specified number, this method works very well especially in cases where the amounts are small usually Ksh50-200 but would be difficult where the amounts are as high as Ksh1000 since one would need airtime/units on their phone that would me at least double the cost of the service, but I have considered the solution and it could be integrated at an earlier stage.

Africa as a continent must develop technologies that foster business and that make it easier to achieve ones objectives. The financial services are a key aspect of this. The current breed of banks in East Africa haven't been quick to embrace technologies that would make it easier for entrepreneurs to facilitate online payment, this must change sooner rather then later.

Comments are welcome

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