Nigerian online shoppers must forget about cash-on-delivery payments

I doubt that there is any way to sugar-coat this: Nigerian online shoppers need to ditch the idea of cash-on-delivery (COD) payments – and fast. Highly visible retailers like Jumia and Konga need to drop that payment system too. Encouraging it simply means taking us back many years.

When I started DomainStandard.net, a pioneer webhosting business in Nigeria, in 2003, I set it up to be a strictly online operation. Note that in 2003, very, very few businesses of that time did anything like that. Even the big names in webhosting then – Hyperia and others – ran operations that required face-to-face transactions. Offering webhosting via physical interactions felt odd to me. So, I set up my outfit to sell entirely online. You can imagine how people discouraged me. I was told, “Nigerians will not hand over their money to you unless they see you. This will not work.”

I proved them wrong. Over the next 6 years, more than 400 Nigerians spread across over twenty states handed over their money to us in exchange for domain names and webhosting without ever meeting us or setting foot in our tiny store-front office in Lagos. As such, many more virtual webhosting operations sprang up in the country.

Building the kind of trust that can power e-commerce is tough, but offering cash-on-delivery payment isn’t the way to go about it. That’s the lazy man’s way, and it is counter-productive to everything that e-commerce represents. All over the world, people pay for goods upfront and get them delivered to them. As a matter of fact, the same Nigerians that insist on COD from Nigerian retailers will gladly pay a foreign retailer upfront via credit card or PayPal for the same item.

DomainStandard.net built that trust and thrived. I have run MOBILITY.ng for some years now, and we keep insisting on upfront payments. We work hard to earn and keep that trust. It was trust at play when brands like Nokia, BlackBerry and TECNO began to send us their products for review without any of their staff having stepped into our office. It was trust when a reader based in Port Harcourt paid the sum of N345,000 for three units of a flagship smartphone UPFRONT. That is how e-commerce thrives.

We must build that trust. I am the first to say that the road has not been easy doing so. Sometimes, logistics issues crop up and create messy situations. Sometimes, there are delays. Sometimes, there are glitches in the payment systems. Nigeria is an insane place to do business in. But so far, we keep managing those situations. We do not overcome obstacles by avoiding them. We face and address them.

If we want e-commerce to flourish, we must ditch this penchant for cash-on-delivery purchases. Yes; retailers will lose some orders at the early stage, because not everyone will embrace the trend immediately, but the entire ecosystem will be the better for it in the long run.

5 Comments

Add a Comment

Your email address will not be published. Required fields are marked *