MasterCard partners Nigerian start-up for online payment solution
MasterCard has partnered with Nigerian tech start-up, NetPlus, to develop an e-commerce solution that will help reduce usage of cash for e-retailers and consumers alike.
This is in recognition of the fact that the African e-commerce sector is still plagued by cash, with the majority of payments still being made in cash at the point of delivery.
For effect, the MasterCard e-commerce solution empowers the consumer, the e-retailer as well as the delivery service by providing a simple and secure digital solution. With the solution, consumers can pre-authorise the payment when placing their order online. The e-retailer is given a sense of comfort and dispatches the goods via a delivery service that is able to use the MasterCard e-commerce app to authorise the release of the payment once the consumer approves, ensuring the merchant is paid immediately.
A key feature is that if the consumer is dissatisfied with their package the transaction can be voided and the funds immediately released, so there is no delay – one of the biggest points of frustration for consumers buying online in Africa.
Market observers see this as a giant leap forward for the online sector, which is predicted to generate yearly e-commerce sales in Africa of $75 billion by 2025. In Nigeria alone, the sector generates over $1 billion yearly and continues to grow exponentially. The biggest challenge facing online retailers is cash, as it poses logistical issues and puts the consumer, merchant and delivery service at risk. Digitising the sector will ensure efficiency, transparency and security.
“Cash has held the sector back from reaching its full potential in Africa,” said the Vice President and Area Business Head for West Africa at MasterCard, Omokehinde Adebanjo.
He added: “We have invested a great deal of energy and resources to develop a workable solution that will meet the diverse needs of merchants and consumers across the continent, and world. It is fitting that our partnership with NetPlus, an African-born tech company, has resulted in us achieving our goal of digitising the e-commerce sector.”
Founder and CEO, NetPlus, Wole Faroun, explained that the solution reduces the online purchasing process to a few simple steps: “The solution comes with extensive benefits for merchants and consumers,” said Faroun.
“For e-retailers, the pre-authentication reflects commitment on the part of the consumer to the purchase, as well as guarantees real time payment and improved liquidity. Consumers benefit from renewed confidence in online shopping, peace of mind as the payment is only processed on delivery without the need for cash.”
Particularly exciting about the partnership between MasterCard and the tech start-up is the fact that NetPlus is the first African start-up to be selected by the MasterCard Start Path programme.
The initiative is open to start-ups from Africa and across the world, who are rethinking banking and payments that are well established already, having secured significant investment. During a six-month virtual programme, Start Path provides start-ups with the operational support, mentorship and investment they need to develop the next generation of commerce solutions and grow their operations.
NetPlus was one of five start-ups chosen globally for the last programme of 2016, and Faroun along with his team have already benefited from knowledge sharing and mentorship sessions in New York, London, and Singapore, where they were able to meet with other start-ups and MasterCard customers.