E-Commerce, Business
Methods and Evaluation
of Payment Methods in
Nigeria
Written by
Michael Adeyeye
Department of Electrical and Information Engineering,
Covenant University, Ota, Nigeria
Presented by
Kareem Herbert & Daison Lowe
Contents

Introduction

Payment Methods

E-Commerce Methods In Nigerian Banks

Evaluation of e-Commerce participation by the
public

Presentation of Results

Analysis and Discussion

Conclusion and Recommendation
Introduction

What is e-Commerce?
 The integration of communications, data
management, and security capabilities that allows
organizations to exchange information on sale of
goods and services.
 An act of conducting transaction via electronic
medium such as though the TV, Fax, or the
internet.
3
Introduction (Cont’d)

Security a major problem with many
payment methods in Nigeria.

Some of these security problems are:
 Trust
 Non-repudiation
 Confidentiality
 Authentication
4
Introduction (Cont’d)

Two main e-commerce business models
◦ Business to Business (B2B)
◦ Occurs between two organizations, is characterized by
large volumes of products and small price margin.
◦ Business to Consumer (B2C)
◦ Occurs between an organization and an individual, is
characterized by small volumes of products and large price
margin.
5
Introduction (Cont’d)

Other e-commerce business models
◦ Business to Affiliate model (B2A)
◦ Business to Portal model (B2P)
◦ Consumer to Consumer model (C2C)
6
Introduction (Cont’d)

Conducting e-commerce over the internet
requires
 Servers
 Online merchant accounts
 Payment gateways
 Web host accounts
7
Introduction (Cont’d)

In-house web front/private hosting
 All requirements are provided or controlled by the
investor .

Instant web front solution
 Very few requirements are provided or controlled
by the investor.

Instant storefront
 Requires a shared or dedicated web hosting plan
provided by a firm.
8
Payment Methods

Most common payment methods
 Digital cash
 It entails the use of a digital wallet where invoice or
receipt of payment is kept and cash is withdrawn.
 Credit cards
 A card whose holder has been granted a revolving credit
line.
 Online check/electronic fund transfer
 A buyer enters the digits or numbers found on the check
to carry out transactions
9
Payment Methods (Cont’d)

Other payment methods
 Debit card
 Micropayment
 Money orders
10
e-Commerce methods in Nigerian
banks

Types of business methods in Nigeria
 Electronic banking
 Internet banking
 Telephone banking
 Mobile banking
 Other transaction method
 Automated Teller Machine (ATM)
11
E-commerce methods by online
service providers

Web merchants
 Are those individuals or organizations that
conduct transaction and make it possible for
people to buy goods or render services to people
via their websites.
12
E-commerce methods by online
service providers (Cont’d)

Payment gateway providers
 Process card information used online or at point of
sale (POS) terminals. These terminals act as an
interface to the banking system.

Present gateways in Nigeria:
 Interswitch
 Etranzact
13
Evaluation of E-commerce
Participation By The Public

Research Gathering Location
 Tertiary Institution In Lagos-State, Nigeria

Study Group Composition





Scholars
Businessmen
Graduate Students
Post Graduate Students
Total Number of Candidates
• 6750 Candidates, 1/5 of the total was only sampled
14
Evaluation of E-commerce
Participation By The Public
(Cont’d)

Other Research Materials Used
 Daily Newspaper
 Articles
 Face to Face Conversation with staff of some
banks
 E-commerce Service Provider
15
Research Questions

Research Questions Asked
 Do you conduct your transaction on the internet ?
 If yes, what payment method do you use ?
 Your job description
 Your computer competence level
 Should you want to make payment method online
what payment method would you prefer ?
16
Presentation of Results
17
Presentation of Results (Cont’d)
18
Analysis and Discussion

Analysis of Current Payment
 84% of the total sample do not conduct.
transactions on the internet (Misguided Figure).
 16% practice e-commerce.
 65% use prepaid cards.
 25% conduct transaction by using a credit card.
 20% use direct payment.
19
Analysis and Discussion (Cont’d)

Analysis of Prefer Payment
 27% prefer direct payment as a payment method.
 43% prefer the prepaid/debit card method.
 18% prefer credit card payment method.
 3% of the sample did make a choice on a prefer
method.

Suggested Payment Method
 Biometric Payment
20
Conclusion and Recommendation

Conclusion
 Direct payment and prepaid/debit card payment are
the appropriate methods for e-commerce in Nigeria.

Recommendation
 Having a card system that hides a user’s sensitive data
by using a PIN and it is based on smart card
technology.
 E-commerce service provider should provide a reliable
payment gateway to banks.
21
Conclusion and Recommendation
(Cont’d)

Recommendation
 Payment gateway should be connect regardless of
their proprietary technologies.
 A regulatory body containing members of banks
and e-commerce service provider should be
created so as to ensure a standard e-commerce
system in Nigeria.
22
References
23
References (Cont’d)
24
Personal View of The Paper
24