Online payments

Consumer habits have been changing rapidly in recent years. Consumers are increasingly making use of online technologies, including digital payments.

After all, the digitization and digitization of the economy has led to the various sectors digitizing and devising solutions in order to be able to continue their commercial activities despite the pandemic. In the e-commerce and electronic payments sector, the figures at a global level are constantly increasing. Many people buy and pay for a service or product online.

Fast, easy, efficient and secure: online payment therefore stands out as a modern and efficient transaction channel that should be used more and more in the future.

First, what is online payment?

Online payment refers to all types of transactions performed online from a computer or a smartphone. It is a money exchange through a digital system. It concerns all payments via the internet.

Online payment: how does it work?

With online payment, you can pay for purchases over the internet via connected devices such as smartphones or computers.

Making an online payment is not that different from making a purchase at a point of sale. Both work in the same way: namely the exchange of a good or service for payment. But in the case of an online sale, as opposed to a physical transaction, the two protagonists are not in contact.

On the customer side, the buyer designates the products of his choice, selects a payment method and is then forwarded to the corresponding payment platform. In most cases, a confirmation email will be sent once the purchase has been made.

On the business or merchant side, the bank card is the most commonly used option. To set up this payment solution, you need to apply for a VAD (Distance Selling) account with a bank. It allows money to be transferred from a customer’s account to the merchant’s business account.

Another popular payment solution is the electronic wallet such as PayPal. It is a personal account that allows transactions to be made without providing bank details.

There are several forms of online payment: credit card or direct debit, direct debit, payment by email or through virtual third-party accounts such as PayPal, mobile payments, etc.

The different online payment solutions

•        The creditcard

The buyer uses his classic bank card to pay on the site on which he makes his transactions. The latter is equipped with a secure payment system.

If he is sure that the site is secure, the payer shares his contact details with it: name, bank details, the 16-digit number of his card, the 4 digits of the validity date (month and year), the last 3 digits of the icon on the back of the payment card and validates his order.

When the transaction is completed, the buyer must enter their credit card number, expiration date and three-digit cryptogram. Once the legality of the transaction has been established, the amount will be debited from the bank account linked to the card.

Here are some examples of the players present in the market:

• Visa: it is the world leader in issuing bank cards. It holds 60% of the market share (Reuters).

• Mastercard: it is the second largest distributor of bank cards. It owns 30% of the market share. Like Visa, Mastercard offers a wide variety of credit cards for the largest number.

• American Express: the company positions itself differently from its two main competitors by targeting a more “luxury” clientele (minimum wage of €20,000 gross per year) and owns only 8% of the market share. Few companies accept it because the fees for each transaction are relatively high.

• The electronic wallet

These are services that are very popular with internet users because they allow you to pay for your purchases without revealing your credit card number. The electronic wallet (or e-wallet) is a system or application that allows you to make online purchases, make transfers and receive them from a computer, smartphone or tablet. It is funded by the user’s bank account. When ordering online, the customer does not have to enter his bank details. He only needs to enter a username and password to validate his purchase.

These online payment solutions require an email address and a bank account and/or bank card. Even if the buyer does not need one to complete his order. We can mention the famous Paypal service and its competitor Google Checkout.

• Internet Transfers

All major banks offer internet money transfer services. Generally free between the holder’s accounts with the same bank. They are paid into accounts of other banks.

African Online Payment Solutions

There are over a hundred online payment solutions in Africa. Here are a few:

• Paydunya from Senegal: This payment solution allows you to securely receive payments from Visa and Mastercard bank cards. In addition, you also have the option to receive Mobile Money payments in Senegal, Ivory Coast and Benin.

• FedaPay is a payment processor from Benin and designed for all of Africa. It allows you to receive payments with Visa or Mastercard and also from your customers. Mobile Money is also available, but only for a few countries in Africa (Benin, Togo, Ivory Coast and Senegal).

• KkiaPay from Benin: it is a payment solution that allows you to receive payments with bank card (Visa, Mastercard and American Express) and also with Mobile Money (only for Benin).

• Afrikpay: a payment aggregator made in Cameroon. It offers several services including payment solution for e-commerce in Africa with bank cards and mobile money (Cameroon only).

• eNkap is a Cameroonian payment solution that allows you to sell and buy online.

• DPO believes that payment is a very secure, reliable and user-friendly payment solution available in several African countries (Cameroon, Nigeria, Togo, Seychelles, Mali…). It allows you to receive payments with credit card and mobile money in Africa.

• CinetPay is a payment solution from Ivory Coast. It offers the possibility to receive payments by credit card (Visa and Mastercard) and local payments in certain African countries such as Ivory Coast, DRC, Cameroon, Mali, Senegal, Togo, Guinea and Burkina Faso.

• Payoneer is available in Africa. It offers international transfers and can issue Mastercard withdrawal cards to its users.

• Paystack is basically a payment gateway designed to facilitate e-commerce in Nigeria.

The African continent remains the last compared to other continents in online commerce and payments despite the development of e-commerce in Africa. For example, some African countries do not have access to Paypal services. Also, some citizens do not have a bank account and/or internet access.