Top 3 E-Commerce Payment Methods Available In Nigeria

Payment Service Providers or Payment Gateways have historically been the technical link between the online shop of the merchant and the transaction processing banks. Many of them are currently licensed processing firms, operating on a global scale, collecting and settling merchant funds.

Here is a broad classification of payment methodologies which are used across Online Payment Platforms in Nigeria. 

1. Card Payments:  Cards can be safely termed as ' electronic key' to the bank account of the consumer. They are mainly divided into:

•  Debit card.
• Credit card 
• Prepaid card with a stored value. 

Cards can be used to 'unlock' the internet merchant and pass cash to the shoppers. Debit cards are used most extensively of all the options mentioned above. Local banks issue them on behalf of card companies like Visa, American Express, MasterCard, Verve etc. to name a few.

2. Digital Wallet based payments: Digital wallets work similar to the physical wallets, except the fact that they are virtual. 

These wallets may carry your debit cards, credit cards, loyalty and other gift cards. They offer you alternative techniques of payment such as online bank transfers. Some wallets also make it possible for consumers to preload cash into their wallets. 

Here are two types of digital wallets that you need to know:

•  Preload digital wallet: Preload digital wallet is an alternative to cash payment since it comes preloaded with e-money. 

However, to make an online payment through a preloaded wallet, you need to fill or recharge it with a certain amount first. You could add money to the Wallet through several methods, including cards, mobile payment, or bank transfer. Some e-commerce companies even offer their preloaded wallets which could be purchased for a certain amount. 

• Pass-through digital Wallet: In case of a Pass-Through Digital Wallet, the card owner is authenticated by the digital Wallet. However, the transaction is settled on a linked payment system such as a bank account or debit card. 

Here, the user does not use the funds stored in the Wallet but instead chooses one of the 'saved' payment method used earlier to authorize the merchant's payment. It is a pretty simple 'click and pay' payment technique. 

Traditional Nigerian Preloaded Digital Wallet firms would need to acquire a PCI DSS permit to offer the digital wallet pass-through service to the users. A permit means the majority of widely used card companies have certified the payment provider as legitimate and they can be used across popular online payment platforms in Nigeria . 

Apart from this, the license also guarantees that the business has taken strenuous measures for creating a sound base to combat cheating and safeguarding the interest of its clients.

3. Other payment methods: Rest of the payment methods are a bit conventional but they do bring forth great ease of mind in the context consumer and the merchant both.

Alternative payments methods such as online bank transfers and direct debits are often associated with small and fixed transaction costs, safe deals, reliable payments and expeditious settlement. Three common methods are listed here: 

• Bank transfers
• Direct debit
• Cash on delivery (COD)

To know more about payment methods, Online Payment Platforms in Nigeria and their working mechanisms, visit us now at Thefintechafrica.com