Author: Michael Adeyeye
Department of Electrical and Information
Engineering, Covenant University, Ota, Nigeria
Presented by: Merlene Headley & Rudi McClean
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 Our
presentation is a summary of the paper
written by Michael Adeyeye. His paper seeks
to identify different levels of ecommerce in
Nigeria among consumers and businesses. It
also evaluates a case study of citizens
involvement to identify the best payment
solution in ecommerce. We will then provide
an evaluation of this paper.
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 Definition
of e-commerce
 Integration of communications, data
management and security capabilities allows
businesses to exchange information on goods
and services
 Act of conducting transactions via electronic
medium
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 Nigeria
- a developing nation emerging in the
ecommerce market, tapped into the use of m
commerce using mobile devices
 High risk security issues – need to handle
authentication and non repudiation


Note that authentication, confidentiality and
trust are driving force ensuring ecommerce is
safe
Use of digital signature for authentication and
digital signature verification for non repudiation
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 Major
business models are B2B and B2C
 Requirements to conduct ecommerce on the
internet:


Online merchant account, payment gateway and
mail or web host account and servers
Web hosting solutions – dependent on cost



In house all requirements is controlled by investor
Instant web front most requirements are outsourced
Nigeria mainly use instant solutions
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 Main

payment methods:
Digital Cash



Digital wallet which is a plug in to web browsers
houses receipts and invoices for payments as well as
cash which is withdrawn to complete online
transactions
Main advantage - does not need personal details of
buyer
Payment is immediate
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
Credit Cards





The card holder has a revolving credit line which can
be used for both traditional and e commerce.
Card has a specified limit where purchases and cash
advances are made up to that limit.
Settlement can be in full within a specified period or
minimum payment by an expected date
main advantage – available cash when needed
Main disadvantage – high charges applied
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
Online check/ Electronic Transfer
When using online check, digits are entered during
the transaction process
 Electronic transfer involves a financial clearing house
- transfer funds from the originator to receiver


Debit Card
Debit card holder access their own funds from their
financial institution, purchases totals deducted
 Use debit card payment processing facility



Can only spend what you have, cash payment is
immediate
Less charges apply
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 Micropayment


Allows vendors to sell over the internet at unit
prices
Can have amounts as low as one cent
 Money


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
Orders
Uses third party to send payment to the receiver
Western union, American express etc
Small cost to process order
Transaction is protected
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 Electronic




banking
Also known as e banking – Banking services
conducted using electronic medium. Include
withdrawals , fund transfer, check balances
Virtual Private network (VPN) to connect to
other branches
Branches also connected using VSAT - very small
aperture terminal; a satellite communication
system
Extranet - use internet technologies to share
information with its customer uses for data
encryption
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 Internet

banking
Intranet - Internal to the bank where staff has
access to required information both customer
and operational related
 Telephone

banking
One branch call another where an account is
domicile to confirm validity of an account.
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 Mobile




banking
Advent of global system for mobile
telecommunication banks conduct business using
this medium
Phone number becomes bank account number
Transfer funds to other phone accounts
Transact e products like phone top ups etc
 Automated


Telling Machine (ATM)
Situated in stores and hotels where access to
quick cash, make deposits
self service operation
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 Web



merchants
Conduct business via their websites purchases for
goods and services
Prepaid services. E.g. a prepaid card to buy
amount of purchases online; also direct payment
to seller’s bank consider online method, proof of
payment is required
Other prepaid card services home entertainment
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 Payment


gateway providers
Possess card information used online or at point
of sale (POS) terminals
Act as an interface to the banking system


Interswitch (Nigeria)
Caribbean Integrated Financial Service Inc. or CarIFS
(Barbados & Caribbean)
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Copies of the same questionnaire was
distributed to about 1/5 of the population of
approximately 6750 members of a tertiary
institution in the suburb of Lagos-State,
Nigeria. This 1/5 was made up of students,
non-academic staff, semi-skilled workers and
academic staff.

Daily newspapers, articles and face-toface conversation with staff of some of the
banks, e-commerce service providers were
also used in Mr. Adeyeye’s research.

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 Sample
of multiple choice questions used to
determine the extent of participation of
Nigerians in e-commerce:
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Do you conduct transactions on the internet?
If yes, what payment method do you use?
What is your job description?
What is your computer competence level?
Should you want to make a purchase online,
what payment method would you prefer.
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 About
84% of the sample does not conduct
transactions on the internet even though
they are computer literate (Table 2.0)
 The 16% that engage in e-commerce do so
through direct payments, credit cards and
prepaid cards to settle bills
 Of that 16% that engages in ecommerce:


65% use prepaid cards, mostly to check
examination results online, buy airtime or renew
subscriptions
25% use credit cards to make transactions
(mostly from foreign websites)
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 The
most preferred method is the prepaid
card system, with 43% of persons choosing it
due to its ease of acquisition and use.
 27% preferred direct payment to seller’s
account
 18% chose the credit card system as their
preferred method
 3% of those sampled didn’t state their
preferred payment method (could be an
indication that they aren’t aware of ecommerce at this present age)
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 Regarding
e-commerce, Nigeria has been
rated as the highest risk country across the
globe followed by Indonesia (Cybersource
2005).
 To date, many orders from Nigeria are NOT
processed due to the above
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It was indicated that the most appropriate
payment methods for use in Nigeria are
prepaid/debit card system and direct payment
to seller’s accounts.
 The debit and prepaid card methods both ensure
that the customer has sufficient funds in his/her
account or by buying a card respectively.
 Direct payment was chosen by many since there
is a reduced risk in terms of fraud
 A standard e-commerce system in Nigeria should
be set up to ensure that banks with different
proprietary technologies can still connect to
each other.

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 Paper
was well written, except for a few
grammatical errors which made meanings a
bit hard to understand
 Most of Nigeria’s payment methods can be
applied here in Barbados and the Caribbean
also
 It would be nice to see biometric payment
implemented here in Barbados
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 Difference



in services when compare locally:
Internet banking – term definition
Mobile banking – use of phone number for
account number
Telephone banking – term definition.
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